Quirky Raises $68 Million to Make Invention More Accessible
Quirky founder and CEO Ben Kaufman may have penned a long and detailed blog post about why it’s not a big deal, but the New York-based startup has just raised a boatload of cash—along with everyone’s expectations of the company, which crowdsources ideas for new consumer products.
Quirky announced yesterday that it has collected $68 million in Series C funding, mostly from existing investor Andreessen Horowitz and new investor Kleiner Perkins Caufield & Byers. Norwest Venture Partners and RRE Ventures also ponied up, bringing the company’s total funding to $97 million.
The three-year-old company says it plans to use the money to improve its website, where users submit ideas for gadgets ranging from barbeque tongs to windshield ice scrapers. It also wants to turn more of these ideas into actual products, and experiment with new retail distribution methods.
As Xconomy’s Arlene Weintraub explained in a profile of Quirky last year, the company uses its site to solicit product ideas from inventors, evaluates the ideas for their commercial potential, creates prototypes using 3D printing technology, then finds manufacturing partners to build the finished products. One highly publicized example: Pivot Power, a flexible power strip invented by designer Jake Zien, who expects to earn $500,000 in royalties this year. (Quirky gives 12 percent of its sales back to inventors.)
In Quirky’s press announcement, Kleiner partner Mary Meeker—who’s now a member of the startup’s board—said that Quirky has brought more than 200 products to market, and that the goal is to keep accelerating the pace of new product launches. “Quirky’s social design platform is reinventing consumer product R&D with materially faster time from product conceptualization, to design and manufacturing and, ultimately, to retail sale,” Meeker said.
Scott Weiss, a partner at Andressen Horowitz, echoes that idea in a post on his own blog, saying Quirky’s model brings the flavor of agile software programming methods to the world of product development. “The average time from when a Quirky product idea is submitted to when the product appears on a store shelf is a remarkable 120 days,” Weiss points out. “Offline retail and product development are well overdue for innovation and Quirky is the most exciting new retail concept we’ve seen since the Apple store opened over a decade ago.”
Statements like that are a sign that Quirky sees itself as more than just a fun way for armchair inventors to turn their back-of-the-napkin sketches into tangible products. The company hopes to reinvent the way consumer products are conceived, capitalizing on trends and ideas far faster than traditional players like Procter & Gamble are able to do. Whether that’s a good way to create successful mass-market products is an unanswered question—Pivot Power is the closest thing the company has had to a true hit.
But at the very least, Quirky’s model reduces the costs of failure. P&G’s product development process “usually takes about 18 to 24 months and results in about a 50 percent success rate for new products,” Weiss points out. “For every smashing success like Swiffer and Febreze, there are an equal number of expensive, high profile flameouts.” Quirky’s hit rate might be even lower, but so is the investment in each experiment.
Kaufman says in his post that he spent the whole summer arranging the Series C round, and makes it clear that he’ll be glad to get back to work showing that the vision can be realized. In fact, he spends most the post explaining why too many entrepreneurs, including himself in a former incarnation as founder of a startup called Mophie, equate closing a venture round with success. “If the press is only writing about how much money you raised, it’s because you haven’t done anything bigger,” he writes. “You should be really f—ing uncomfortable if the money you raised overshadows the work you’ve done.”