Startup Case Studies: Quirky Inventions
Warren Buffet says that you learn best from mistakes, but the mistakes don’t have to be yours! Startup case studies are valuable resources to help us to avoid common pitfalls and use our resources efficiently.
In today's startup case study we identify 3 reasons that lead to the ultimate downfall of Quirky inventions. Due to the company's overall lack of focus, they struggled to identify and improve on products with tremendous potential, which in turn lead to a significant decline in Quirky's brand awareness.
Animated Startup Case Study: Watch Quirky's Downfall
A Classic Startup Case Study: Quirky Inventions
Quirky — a community led invention platform. Their vision? To reinvent ‘invention’ At it’s essence, Quirky was just like any other company. They built products. But their approach was... inspiring to say the least.
Product ideas were pitched and voted-on by the community. This was brilliant! Since one of the biggest risks to startup failure is “No market need”. This approach reduced that risk significantly. But not entirely.
Either way, they were off to a good start with 175 Million Dollars in Funding. But come 2015, Quirky filed for Bankruptcy.
What went wrong? A lot of people have asked this question. We conducted thorough research on Quirky to uncover the reasons behind their downfall.
So here are the three major reasons Quirky failed.
Reason #1: Quirky's Inability to Iterate
Quirky definitely had an innovative business model. But they didn’t seem to know how to innovate.
You can’t simply release a product and expect it to be an instant success! Products need tweaking, they need to iterate. And they need to evolve. However, quirky moved from one product to another so rapidly, that they never had a chance to iterate. Because of this, products with great potential were just left to die.
This leads us to our next reason.
Reason #2: Quirky's Weak Branding
With products ranging from pricey Air Conditioners to inexpensive kitchen utensils —I couldn’t help but ask “What does Quirky STAND for?”. Which is a bad sign for any branding-team trying to get a message across.
When you diversify too much, you run the risk of spreading your brand so thin that you lose authority and credibility. And that’s exactly what happened to Quirky.
Reason #3: No market validation & Wrong Distribution channel
Quirky decided to use big box retailers to distribute their products. This didn’t turn out so well, since big box retailers demanded Quirky to manufacture enough stock so ALL their stores could hold the product. However, the problem was that there was no demand for these products.
Quirky didn’t seem to have validated market need. Because of that items simply sat on the shelves and never sold. Moreover, many of these were big ticket items that incurred huge losses. These were losses that could have been avoided.
Startup Case Studies: Concluding Thoughts
Now, you’ve probably noticed an underlying issue with Quirky’s strategy: Over-diversification.
One of the cardinal rules for success in the early stages is focus. Quirky was pushing out so many products that focus was all but impossible. The team was definitely ambitious, and showed a lot of promise. But with a launch-rate of over 50 products a year -- they simply flying too close to the sun.
What do you guys think? Was it their business model that had inherent issues? Or was it the execution? Let us know your thoughts!