cloud network hunting note: someone says, “don’t care about broken bottle, it is not worth”. But if you don’t want to think what reason, how can suit the remedy to the case, to avoid repeating them? So, always preoccupied and militantly proclaim the kauffman indeed caught a gleam of hope: admit mistakes, and when the Quirky in jeopardy, decisive appointing new CFO, a new business model.
in February this year, a New York startup Quirky employees gathered in the head office in the west in Manhattan. Hundreds of community members are through video real-time involved. Generally speaking, this kind of “citizen” is nothing but to celebrate the development of the company, show some new products are amazing and discuss the business cooperation. This night but different, it is to review and look at the night, lead the people throughout the ups and downs of the Quirky understand the hidden business acumen.
it is well known that Quirky slogan is “creative products can touch”. Have to say, this is a chance once in a blue moon, people can submit ideas first, voted for products should be developed, even for the final product research and development. And then it will start detail design, manufacture and retail distribution (including some online sales) girder, etc.
in fact, its creators help non-expert moves to the press. As the founder and CEO of Ben kaufman said: “it’s easy to think things are going well.” (during this period, he quickly jumped over the one point behind its great news report full slide [followed by the growing number of product research and development and its revenue slide]). He also personally think: “there is no bad news of entrepreneurial story is incomplete.”
good ideas can not make money
although Quirky overall revenue growth significantly, but its cost is also rising. And that due to the management mode of Quirky (the most fierce in the fiasco of products basically all). Kaufman has stressed a lot () the company is also trying to research the invention of the ideas, such as a set can let any of the items to a remote control car wheels and one side can keep bright and clean in the misty bathroom mirror. Relevant data shows, the company to develop the product for more than $800000, but they have none.
in fact, the above events would have is the norm. Kaufman noted Beat Booster (Quirky cost $388000 to develop wireless speaker) is hard. It is hard to imagine, and then it could sell less than 30 sets. Little profit in selling well, and even also (thus, the company is mostly done at a loss of business). As far as I know, Quirky on the invention of new product ideas personnel paid almost $9 million, and the whole development process is more costly, 150 million was a conservative estimate. To this end, kaufman also could not help but to himself: “these are good ideas? B: yes. Quirky can make finished products, and then put into the market finally make a lot of money? Can’t.”
Quirky founded inspired by kaufman’s personal story. In 2005, he was determined to drop out of school to make the iPod accessories, and get the mortgage refinancing from their parents. He used the money to travel to China a visit, then, he also do some kind of spirit of (seemingly reckless impulse) : set up the Mophie (the company take the iPod and iPhone lift up all of a sudden fire). Facts have proven that bet on, kaufman Mophie created another miracle, best-selling especially in the case, the battery pack and wristbands. Also whereby he enter emerging entrepreneurs at the age of 20, topped the most under the age of 30 young entrepreneurs. In 2007, he sold the Mophie, then two years later, then established the Quirky (aims to help more people realize he had felt a sense of accomplishment.)
“like entered the willy wonka’s factory” (hunting cloud network note: Leigh wonka’s character in the movie Charlie and the chocolate factory “, the film tells the story of a fantasy adventure story)
there is a period of time, everything seems to be in good progress. The Verge of website of an employee when asked about The first impression when stepping into a Quirky office, he said, “it was a magical place, like entered The willy wonka chocolate factory. Seems everyone is doing the startup dream.” At first, the company from the product, and with the Pivot Power (can change the shape of the chain) socket red moment, also creates the inventor and the project members of more than $1.5 million a high income.
in the next five years, Quirky successively won $175 million in financing (most of them come from RRE, Andreessen Horowitz and Kleiner Perkins and other blue-chip investors). In 2014, it is in New York in the eastern part of schenectady established customer support center, established the miniature factory in San Francisco. After the announced a partnership with gm, and opened a dedicated to the research and development related to intelligent household products new company Wink.
time to walk to in 2014, is a Quirky fired the first shot is Aros with general motors to create (a can be controlled by the Wink application intelligent air conditioning). Then, it cooperate with Uber, buy a lot of ice cream truck, to fully meet the needs of consumers in a cool summer. Therefore, kaufman (modesty as the world’s most important CEO) one more and more high.
Quirky seemed to be a success
at the time, Quirky launched three new products every week. Its goods are sold to everywhere, target, walgreens (the largest drugstore chain) and the New York museum of modern art is the destination. The company seems to be expected to become the next across multiple different categories (such as electronic products, pet products and kitchen utensils) consumer brands. But the truth is, by contrast, accurate, said that although Quirky look prosperous, but its financial conditions worsen sharply.
Quirky used to carry out the management means of crowdsourcing products invention, which is complied with the demand of the market. Scenes to words, of course, the real reason is that many products can’t profit, especially in the company to research and development community returned 10% ~ 30% of the revenue (each transaction) conditions. At the same time, it is in any category is lack of good business negotiation with suppliers or resellers of scale and experience.
in fact, indeed through kaufman, a lot is not he hired experienced high pay staff pet projects. Take an Egg Minder, it is a of Egg tray can connect to the network, combined with the mobile application, also can the Egg is about to run out and provide much closer to the metamorphic friendship remind. There is no denying the fact that it’s an interesting idea (the final finished product even appearance on the “tonight show”), but not from the beginning, the economic sense.
we interviewed a former clerk about preparation of products (i.e., before starting the design and development of creative review stage), said: “it is obvious that the presence of each with a smile on her face, but agree that this is not a feasibility of products. Because we spend for this cost as the standard, you can’t make so much, also could not sell enough, despite the high-end technology as the backing. But this came in, and only said, ‘go ahead! ‘instructions, so we act, even if its flat later.” To tell the truth, kaufman is a “willful child” in many ways.
and learned from some of the employees that, even if the product has a certain economic value, kauffman to sell quantity is too optimistic. Therefore, Quirky finally there are a lot of unsold inventory (had to liquidate on them after liquidation).
“we should test the product before shipment!
what’s worse is that many products do not meet the requirements of the original, elegant design, neat packaging and appropriate business marketing. Look at about Aros reviews on amazon, you will find almost full screen a week feedback () for all kinds of problems. Which on The Verge of Chris ziegler, that because The first Aros customer experience is terrible, and in return after The second stage also unchanged.) The noise of specific situation is like this, it is great, usually don’t even remotely on a wireless network, and panel lights have been lit, dazzling to make it difficult to fall asleep.
“we should test the product before shipment! One employee said, and points out that it’s not just the Aros, Quirky all the research and development process of the vulnerability. Appeared in order to shorten the product cycle, kaufman is often thought to skip this stage. “He did not want to bow to reality, is always arbitrary, want to operate with his own company.”
in February 2014, the Quirky bank deposits of $50 million, but it would cost $5.8 million per month on average. Consequently, it wanted to do another round of financing, but investors stinginess. Finally, in September 2014, it hired a new chief financial officer Ed kramer (in the Beats as a vice President of financial position). Kramer deep thought Quirky upheaval is required to cut the Gordian knot, otherwise it will face the shortage of cash. So starting in October, the company conducted a series of big cuts.
series of cuts
during October 2014 and February this year, following the kaufman said publicly that the status quo of the Quirky recession, after the company have fired more than a third of the employees. It gradually stopped most of the existing products, including popular with those who bring hundreds of thousands of dollars. And, according to staff, it also ceased to pay for many services.
so Quirky can revive later? Recently, I met the kauffman at company headquarters in New York. He slightly humility and emotional, clearly the change of the past 18 months to let his feel. He said: “it is not simple, because the company is all of my life.”
and Quirky already has a plan to turn things around. First of all, it would slash production products. Instead of blindly make in different vertical, now he will specialization in three aspects: the associated with universal joint development of smart home products, and Amazon Dash forward hand in hand Poppy appliances new series and success such as the Pivot Power electronic devices.
second, the development of the company focus will shift to help other companies to develop products, and try to avoid their own independent research and development products. The Quirky last year, a new lease on life for the first time in cooperation with general adopt this strategy. After that, it with haman audio-visual audio manufacturer, and toy giant mattel take online.
and Quirky community will continue to submit ideas, is the company’s responsibilities is to pick out the best ideas, guide the production and design. But is used for design, research and development, manufacturing and marketing the working capital by the giant, Quirky not stakeholders. Therefore, kaufman explained: “this is a subversion of the change. In the past, we are going to pay for, and then pay a tax. Now model is funded by partners, and pay us a royalty (part of it and then return to the community).”
in order to find new partners (and they play good relationship), Quirky recently told Undercurrent (organizational design consulting company) for advice. Kaufman said that some people’s severance is to provide space for new blood. He also said: “those guys are mostly customer manager, the inside of the hand holding some more or less we need contacts, so to perfect his matchmaking-obsessed by them (to establish cooperation relationship with the big brands). For the product factory is transformation, it is undoubtedly a new starting point.”
giant enterprises and unknown inventor win-win bridge
want to know, to help giant enterprise innovation is far from support is not the famous inventor of the stunt. In spite of this, Quirky believes that community members can also receive rewards and recognition, even if hamann company or mattel’s products are the main. And with the aid of the brand influence, the inventor will be standing on a bigger display platform, let your creative materialization.
of course, for the sake of long-term development, Quirky will prove no matter who sell their products, this idea is worthy of the winner. But maybe the situation is not optimistic, because the community pay also shrunk dramatically, the amount of February alone plummeted to half (from 10% to 5%). Therefore, kaufman excuse: “I think this change is reasonable, because now the platform has a lot of opportunity to perform. (and the company receives the number of ideas is also rising.) Make an inappropriate, for example, 10% of the revenue has not made two years ago is about to reach 5% of the $100 million is so high.”
kaufman admits that he made many mistakes. His self-analysis said: “to be honest, we have a little their topic, target category set too wide.” Paused for a moment, he continued his analysis: “we need a competent financial officer.” In kramer as before, as long as the product can sell to retailers such as Target, the company will be a sum of money to the community members, but if the goods be returned to later, Quirky only from recognize unlucky, even want to part of the payment, no way). Now in one thousand, they each quarter will retain 15% of the payment. But the heart still drop of blood, “oh, we are real suckers pay about $1.9 million.”
he said, the company is not much due payables, but that doesn’t mean that it will stop to pay in full or defaults on any debt. He also wrote in an E-mail, “each problem should be treated with special (related services, etc.). In the transition period, we have been paying everybody, not secretly hide a minute corner.”
“the lack of a strong financial officer.”
there is no doubt whether past or present, the evaluation of employee is always mixed reviews. They may appreciate kaufman’s obsession with enthusiasm and energy, but also accused the financial crisis due to careless and arbitrary. A former clerk with dissatisfaction: “the bottom line is always in our hands. Although he has a way in this business companies, smart, tireless, and inspire them, but everyone has to be its mercy.”