Quirky, a company that collaboratively designs consumer products, sells them, and then shares the revenues with its online community, raised US$6 million in Series A capital this week from RRE Ventures.
The Internet certainly has revolutionized commerce: people can open a business with little start-up capital, individuals can sell their wares using a third party platform like eBay, and customers can evaluate a potential product or service by reading reviews on a multitude of Web sites. But while there has been much talk about the Internet allowing customers to design products they can actually purchase and use (my personal favorite is a t-shirt site), Quirky aims to be a site where anything imagined can be devised, discussed, and distributed.
Here’s how Quirky works: Every week, the site’s employees polls its 20,000 users from around the globe to cooperate in each aspect of a product’s creation. Starting with the conception of a product, these individuals can have their say in the design, naming, marketing, and finally, sales. The degree of involvement is up to the user: anyone can submit an idea, or they can add to an idea or offer their opinion on someone else’s creation. Once the product is completed, it is available for “pre-sale” in Quirky’s online store. If the product succeeds and reaches a certain sales threshold, the product goes into increased production and becomes available for worldwide distribution. Quirky then shares the revenues among its community members who were actively engaged in the product’s development.
Many of the products are fun and innovative; some come across as just another waste of plastic; others would actually make sense to consumers who want to decrease their carbon footprint. I am intrigued by Yogurt-By-You contraption that allows you to make yogurt seamlessly—a bonus for a guy like me who loves yogurt, but can never seem to master my grandmother’s stove-top recipe (and doesn’t like generating so much plastic waste from store-bought cartons). The part-time vegan in me was drawn to the Pressto, a press that squishes the water out of tofu; at $30, it could be thoughtful shower gift for an herbivore friend.
At a time when angel funding, venture capital, and in the long term, public stock offerings are tedious, expensive, and often involve issues over control, alternative forms of finance like that of Quirky’s have a chance at succeeding. Take a look at the music industry: crowd funding is catching on, allowing musicians to bypass the studio system and create music for and with their fans. But rather than only throwing its supporters a bone (musicians usually just give free MP3 files or CDs to their crowd investors), Quirky gives a financial incentive to users who invest their time and thoughts into a product’s development.
Quirky is a start. We may just see the beginning of the concept of brand loyalty going through a massive upheaval. Instead of just commenting on what someone thinks of a product, giving an individual a say in its development through conception to completion may change the way we look at something we buy and consume. So as far as sustainability goes, there’s promise: imagine if users had input in every step of a product’s supply chain, eliminating waste and reducing energy. I know there is a lot of interest: I would like to see how Quirky or another firm could harness this enthusiasm.