Since I learned about the company about one year ago, Quirky.com has become my favorite example of open innovation and customer co-creation. We had Quirky's founder, Ben Kaufman, at our MIT Smart customization Seminar earlier this year, and his presentation even made me a larger fan.
If you do not know Quirky yet, think of idea contests meeting microfinancing meeting open development. Users can suggest a new product idea (for a fee). The Quirky community then starts with some research and votes on the best ideas that should enter the next stage. Here, ideas are turned into concepts jointly by the community and Quirky's own developers. Next, again an evaluation. Passed? Then the concept is out for community financing. Only if a minimum number of customers commit with their credit card to purchase the product later, manufacturing is started, and the product will be launched.
For a more detailed description, go to their website (you have to register to see most functions) or read a great article by Rob Walker in his "Consumed" column in the NYT Magazine.
And here are my ten reasons why Quirky.com really is "best in class" in open innovation and customer co-creation.
10. Demonstrating that the crowd can co-create products which make it Time Magazine's "Innovation of the Year" (2009).
9. Proofing that a good co-creation idea can get serious VC money. With $7 million in financing, up to now, Quirky.com has become a role model and inspiration for many other start-ups.
8. Bringing us new fun products no one really needs but which all have an "I want this" appeal -- once a week.
7. Mashing-up lead users, customer co-creation, open innovation, and crowdsourcing: Co-creation to facilitate input by users/potential customers on new product ideas (most Quirky projects start with an unfulfilled need by a (lead) user). Open innovation to turn the idea into a prototype with the help of external experts who participate in technical problem solving. Crowdsourcing to coordinate and facilitate the entire process (Quirky is a great example of applying the original idea of crowdsourcing according to Jeff Howe).
6. Demonstrating how fast innovation can be -- despite the involvement of so many participants and parties.
5. Lifting the Threadless model to another level -- and developing the idea further than "just" t-shirts!
4. Providing me with a great new example of the "collective customer commitment" method we described in our 2006 pape. At Quirky, new products are only produced if a minimum amount of customers show support (commitment to purchase) the product.
3. Providing a platform for products originating from deep user insights and offering anyone the platform of turning great ideas into real products -- and profiting from it (see below). Also, if your idea does not make it to a final stage, you get a great feedback report with the consolidated community feedback and research on the idea.
2. Demonstrating a great model of "hybrid" value creation between openness and closeness. Most activities are performed by the community and are freely revealed on the platform, but Quirky provides (hierarchical) coordination and takes over the more complicated developing steps, like finalizing the design and the technical development of the product.
1. Being one of the first companies that really(!) takes external contributors serious. Ben Kaufmann told us at MIT that the core challenge when launching the company has been to develop an algorithm that provides a fair distribution of 30% of all revenues' to the community members who contributed to a particular project. In average, 1200-1500 contributors are paid per product! Such a large-scale contribution scheme still is very rare in for-profit industries -- but should become a role model for the co-creation economy.
Update (Oct 24, 2010):
A few days ago, Quirky updated its website. Here are some of the new features that directly enhance the buisness model:
- Shopping cart functionality, with clear breakdowns of which products are in development, which are in production, and which are shipping now.
- New community dashboard, which makes it easier to connect with the more than 35,000 community members.
- New evaluation format that allows users to browse, vote, rate, and comment on ideas quicker and easier.
- More ways for users to track their activity on the site.
- Change to pre-order commitments: There no longer is a default deduct to all "pre order commtments from your account, but you just leave their credit card info with them.