Quirky is a remarkable company and I cannot believe that I have missed them for so long. They crowd-source product development of their products. So far they have created 299 products and have a community of 826,000 users.
Ten percent of the gross revenues of a product is contributed to its Community Cash Pool (my caps). This is the invisible hand that drives the development of the product.
The process is remarkably simple,
- Community members submit an idea
- If the product is sold they will receive 40% of the Community Cash Pool generated by the product.
- Company and community vote on idea
- Company invites the community to contribute to, and vote on, product features, options, branding etc
- Every contribution earns a small percentage of the final product Community Cash Pool
- Company makes and sells the stuff
- To its community on its website (high margin)
- Indirectly (lower margin)
The Nimbus is a good example of a product’s development timeline (“now” is at the top of the screen).
Quirky has addressed the problem of product development in the highest risk part of the market in a very open way. In doing so they have provided a spectacularly good example how an active community can provide product development support for established brands.