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,

  1. Community members submit an idea
    1. If the product is sold they will receive 40% of the Community Cash Pool generated by the product.
  2. Company and community vote on idea
  3. Company invites the community to contribute to, and vote on, product features, options, branding etc
    1. Every contribution earns a small percentage of the final product Community Cash Pool
  4. 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.