An air conditioner, powered by fans. How Quirky's 800k members help newbie inventors get to market

By James Robinson , written on May 26, 2014

From The News Desk

On April 25, a smart air conditioner went on sale, a partnership between crowd-sourced manufacturer Quirky and GE.

Its inventor, Dr. Garthen Leslie, was a former Department of Energy executive who had never manufactured a thing in his life. Leslie submitted the idea to Quirky on November 15 last year, where many of Quirky’s 800,000-plus members evaluated it, crowd-sourced ethnographic research, and voted on a name and tagline, before Quirky and GE got on with prototyping and manufacturing it.

For Quirky President Doreen Lorenzo -- who joined last October from her previous role as President of Frog Design -- this is community-based, not crowdsourced, inventing. Leslie gets to bank four percent of gross sales for his air conditioner. The 2,992 “influencers” who weighed in split six percent of the sales between them. The product came to life, from idea through to a physical object ready to retail, in five months.

“Most product development life cycles are years. Ours are months. If you cut out all the meetings, you can get a product out the door much quicker,” Lorenzo laughs.

The traditional wisdom is that it isn't supposed to be done this way. As Lorenzo describes, if you go into a traditional company you’ll find a large center for research and development filled with a lot of smart people, where products managers go and sift through the ideas to see what they can push out to market.

“But today the voice of the person that you want to use your product is available to you. With Quirky, the community tells us what the product should be, we know what they want, and you get this really interesting perspective,” Lorenzo says.

Quirky has turned the traditional manufacturing cycle on its head, but in the process eliminated a lot of the need to take risks because they’ve aligned the process of ideation closely with the people they’re trying to sell products to. The company was founded by its CEO Ben Kaufman in 2009, who started mobile accessory company Mophie at 17 and saw how hard it was to get even a good product idea to market.

In five years Quirky has developed a community that will soon cross over the one million member mark. Lorenzo says those members range from housewives through to teachers, engineers and established inventors. The community inventing process has allowed the company to work at speeds unheard of in hardware. It has bought 305 products to market: on its site you can buy a skateboard, a desk organizer, and surge protectors. This year, it is planning to release between 70 and 80 new items.

It is a style of business that Lorenzo thinks couldn’t have worked even ten years ago. Its rise has gone hand in hand with the new market factors that have opened up better access to manufacturing tools and allowed for faster product prototyping, but she says that for her, that isn’t what has made Quirky possible.

“I think social media made it possible for people to build these communities. I don’t think people were trained to congregate and collaborate like this before that,” Lorenzo says.

Browsing the Quirky site, each page is a closely catalogued history of how the idea progressed through the system, the process of manufacturing and design, and how much money the inventor and community pocketed. It is an uncomplicated process that avoids any insinuation that Quirky might be profiting one-sidedly from the inspiration of the crowd.

“I think what people are most shocked about us is that it is so black and white. If you have an idea that is chosen, we do our due diligence and you make money. No ifs or buts,” Lorenzo says.

Lorenzo says that the style and pace at which the company works means that it gets a lot of approaches for partnerships that the community gets behind quickly. She adds that there wasn’t any sort of brand fallout when Quirky partnered with GE last April. GE and Quirky launched a design challenge, they received over 1800 submissions, and by the holidays GE had four new products on the shelf. In theory, GE and Quirky represent two sides of a manufacturing coin that could be very powerful if bought together properly; the creativity and invention of a captive crowd putting their minds to dreaming up great products, with the scale and market clout of a global behemoth.

Quirky has banked $175.3 million in venture capital, through to a Series D led by Kleiner Perkins Caufield & Byers, Andreessen Horowitz, and General Electric. The company represents an honorable idea in practice, but the harder, more pressing test will be for it to turn profits as a fledgling manufacturer. Built onto its concept is a simple hardware model, driven by selling bits and atoms at a profit. Making products designed by a niche of people risks overlooking the broader market. If Quirky consigns itself to a series of smaller hits, it risks being hurt by one big miss.

Lorenzo hopes either way that the ideas at Quirky’s core have staying power. A platform like this can open up the possibilities of good ideas and protect inventors from bad ones. Recently, someone asked her to speak to a friend of theirs who was a prominent doctor and had sunk $1.5 million into an invention that he was about to mortgage his house to raise another $600,000 for.

He was having trouble. The product wasn’t good and it didn’t have a bright future on the market. For Lorenzo, Quirky could have been the difference.

“Something like this is such a common occurrence. We can make sure things like this are less likely to happen.”