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Inventing More Inventors at 'Quirky' Start-up

Katie Kramer, CNBC Producer, The Wall Street Journal Report
Tuesday, 21 Aug 2012 | 11:34 AM ET
Quirky's Pivot Power
Source: Quirky.com
Quirky's Pivot Power

“Every great product in the world starts with a great problem,” says Ben Kaufman, the 25-year old CEO of consumer product company Quirky. Kaufman’s three-year old start-up aims to solve the pesky problems of everyday life — like overloaded power strips, or brooms that get too dirty to clean effectively — with the help of tinkerers, independent inventors and a tech-savvy staff.

Quirky specializes in quickly-produced, affordable consumer goods, made primarily of inexpensive materials and presented with a cheeky sense of humor. Hence: the segmented, articulating surge protector dubbed Pivot Power, and the Broom Groomer, a dustpan with rubber dividers to loosen aggressive dust bunnies. Since 2009, more than 60 Quirky-branded products have reached major retailers like Bed, Bath and Beyond, Staples, Target, and The Container Store.

The company, employing 70 people and headquartered in a converted warehouse in New York’s Chelsea neighborhood, carries the tag line, “Making Invention Accessible.” Quirky relies on a business model best described as "social product development."

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Budding inventors post ideas and concepts on Quirky.com for a $10 fee. Those ideas are voted on and refined by registered users to the site, as well as the Quirky staff of professional product developers. The company shoulders the logistical, financial and legal burdens of everything from patents to manufacturing to distribution. Ten percent of the revenue goes back to the community of inventors; on average, each product boasts some 1,000 co-owners.

Start-Up Nation: Inside Product Development Site Quirky.com
A look inside the headquarters of New York City start-up, Quirky, with the twenty-something CEO who says he can take on the world's biggest consumer product companies.

“That means every time you buy one unit of a Quirky item off a shelf, 1,000 people get paid,” says Kaufman. “All of these people are huge evangelists for not only a brand, but the products they're buying.”

Seven years ago Ben Kaufman was in math class...

Quirky's Broom Groomer
Source: Quirky.com
Quirky's Broom Groomer

Seven years ago, Ben Kaufman was sitting in his high school math class, trying to solve the problem of hiding his iPod-listening habit from a teacher. He developed a prototype of a less-visible headset of ribbon and gift wrap, and convinced his parents to obtain a second mortgage on their home in order to facilitate financing for a company that would produce it.

The new businessman’s first venture was mophie, which creates accessories for Apple's iPod and iPhone products, including the popular Juice Pack rechargeable battery case. The experience taught him the difficulty that a lack of professional infrastructure presents to would-be entrepreneurs. “The best ideas,” Kaufman says, “are locked in people's heads.”

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“The reality associated with bringing those product ideas to life is so ridiculously complex. I thought all I needed was that second mortgage from my parents. But in reality, I needed to know what manufacturing looked like, what merchandising looked like, how to get into retail…all of these different steps that just kill ideas. “

Kaufman sold mophie in 2007 and launched Quirky, with the goal of introducing one new consumer product each week. Reported revenue in 2011 was $7 million, up from $1 million just a year before. That power strip, Pivot Power, is earning $400,000 to $500,000 annually for its inventor, a former Wisconsin law student named Jake Zien.

“We're a consumer product company. We talk about ourselves as ‘the 21st century Procter & Gamble,” Kaufman says. “We want to be around 100 years from now. We believe the services we provide and the mission of the company in terms of making invention accessible is something that can sustain for centuries.”

The Wall Street Journal Report with Maria Bartiromo airs on CNBC Sunday evenings at 7:30 pm. Check local listings for airtimes on affiliate stations.

Email us at SmallBiz@cnbc.com and follow us on Twitter @SmallBizCNBC.

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