Today we visited a startup based in New York City called Quirky.
It's founded by Ben Kaufman, a young entrepreneur who wants to help everyone with a good idea see their inventions get sold to the masses.
The first year, Kaufman's team turned four community-generated ideas into products that are actually getting sold. The second, it made 20. The third year it made 40. It has turned a total of 79 ideas into products that are now sold worldwide.
Here's how a Quirky product gets made:
- People submit their million-dollar ideas to Quirky. Quirky gets about 2,000 submissions per week, and it has received 75,345 total ideas to date. It received 30 ideas in its first week alone.
- Quirky then selects a few hundred submissions to design. It has a design meeting every Thursday.
- It then picks a few products to build. Quirky has a whole studio for creating prototypes, complete with paint and 3D printers. It has a team of people in Asia who make the products. It's a vertically integrated operation. All the while, the 316,208 community members give their feedback throughout the design process on everything from color to price point. If their suggestions are used, they get a percentage of the sales.
- Quirky ships products to 35 countries and its items are sold in 35,000 retail locations. It has sellers that pitch new products to Bed Bath & Beyond and other major outlets. It has relationships "pretty much everywhere except Walmart," Kaufman says. The average number of days it takes to complete the entire process, from ideation to retail, is 180 days. The product Quirky is launching tonight, Pluck, only took 30 days to complete.
- Quirky offers a lifetime royalty to the whoever comes up with the idea. It gives the person 30% of online sales (wholesale) and 10% of retail sales (in the Bed Bath & Beyonds). The "inventor" splits those sales percentages with people in the Quirky community who helped bring the idea to life, but they still keep the vast majority of the money.
Quirky is a pretty different model from what we think of in the hardware business. It bears a lot of costs: It has to build, ship, and sell every product while still giving up 10-30% of everything that's sold. But it doesn't have to have a big in-house R&D operation. And it can bring efficiencies of scale that smaller inventors would never have in manufacturing.
Kaufman says his team can make money as long as tens of thousands of items are sold. And since his items are placed in 35,000 retail locations, the odds of selling that many items are good. Quirky recently raised $68 million, which gives it time to figure out its margins and capital to invest in scaling up.
To date, Quirky has paid its community $2 million for their ideas. Its best-selling item is the Pivot Power, a genius power strip that can turn any which way (see below). We've all experienced that very annoying situation where you have to unplug a bunch of cables just to make a bigger plug fit in the last slot.
The community member who designed the Pivot Power has made about $500,000 from his portion of the retail sales, according to Kaufman.
Here are some of the most successful Quirky products ever invented. They're brilliantly simple solutions to widespread problems.
1. Pivot Power: 495,436 sold to date.
It's a bendable power strip.
2. Cordies: 364,266 sold to date
Separates your computer wires so they don't get lost and tangled.
3. Bandits: 223,120 sold to date
Rubberbands with a hook to fasten around things.
4. The Pluck
Today, Quirky is launching a new product, the Pluck, that uses suction to separate an egg yolk from egg whites.
You can already do this with a water bottle, but Pluck is a more elegant solution that's sure to sell in stores nationwide. It's retailing for $13, beginning tonight, on Quirky's site.
Here's Quirky founder Ben Kaufman showing how Pluck works. It was invented by a man from a small town in Texas, who was flown up to Quirky's headquarters yesterday to see the finished product.
SEE ALSO: The 20 Most Idiotic Inventions You'll Ever Encounter >
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