The company known for making "invention accessible" is reinventing itself--again.
Crowdsourced product company Quirky has acquired organizational design firm Undercurrent, the first acquisition for Quirky since it launched in 2009. The transaction will help Quirky shift its business model from being a product company to adopting a more service-oriented approach, a transition Quirky began last summer. Financial terms of the deal were not disclosed.
"We really weren't set up to service companies," says Quirky founder Ben Kaufman, adding that Quirky has a long history of collaborating with Undercurrent and its CEO, Aaron Dignan. "We were meant to work as a consumer products brand, and what Aaron and his team do is run an organization that really powers and enables a much more service-oriented approach."
By way of background, Quirky sources product ideas from its online community of roughly 1.3 million people. The company then hand picks the best ideas to develop and ultimately create new consumer products, to be sold in stores such as Target and Bed Bath & Beyond, as well as online shops including Amazon and Fab. Undercurrent, meanwhile, provides a service to large clients such as GE, American Express, and PepsiCo, helping them tackle issues related to design, technology, and innovation.
Having joined forces with Undercurrent, Quirky can now give large companies access to its community of inventors and will give those companies exclusivity to certain product ideas. Quirky has already partnered with General Electric division GE Lighting and publicly-listed audio company Harman, and plans to announce a third major partnership in the next week.
"We've gone from [being] a company that only makes products for ourselves to a company that makes products for some of the largest brands in the world," Kaufman says.
Products that originate within Quirky's online community and get released by partner companies will be branded under the partner organizations' names, but will carry a "Powered by Quirky" seal. Inventors who come up with the ideas for the new products will continue to receive a percentage of sales once Undercurrent's team joins forces with Quirky, which will happen this summer.
By bringing in Undercurrent's 33 total employees, Quirky's total headcount will grow to roughly 300. Both Quirky and Undercurrent are based in New York.
Quirky and its community are responsible for bringing popular products like the Pivot Power, a bendable power strip, and a citrus spritzer dubbed Stem to market. To date, Pivot Power inventor Jake Zien has made more than $827,840, while Tim Houle has netted more than $50,000 from his Stem invention.