Quirky raised $170M to invent products by committee — then burned through all of it

Quirky, founded by Ben Kaufman in 2009, let an online community submit and vote on product ideas, which Quirky then engineered, branded and shipped to retailers. Investors bought the romance: $6.5 million in 2010, $16 million in 2011, $68 million in 2012, and $79 million in 2013 — including $30 million from General Electric and a partnership to co-develop 30 connected-home devices.

The economics never worked. Kaufman admitted in July 2015 that retailers demanded terms that left Quirky unable to make money on the products it made for them. Inside the company, Wink — the smart-home platform Quirky had built up — consumed more than $20 million and sold its hubs at a loss. In February 2015 Quirky stopped making its own products and pivoted to signing innovation partnerships with companies like Mattel, Amazon and GE.

The money ran out anyway. In July 2015 Kaufman told Fortune the company had been out of cash 'weeks ago'; 111 employees were laid off and the founder was replaced by the company's finance chief. On September 22, 2015, Quirky filed voluntary Chapter 11 petitions with the intention of selling 'substantially all of its assets.'

Kaufman's own verdict came before the filing: 'I wouldn't do that again. I wouldn't start a startup within a startup. We should have handled Wink differently and spun it out.' Flextronics bought Wink for $15 million that November; the rest of Quirky went for $4.7 million to lender Q Holdings, over GE's objections.

Roughly $170 million of venture money gone — $79 million of it a 2013 round led by GE; 111 employees laid off; the Wink platform fetched just $15 million.

The community-invention model decided what to build, but nobody in the process owned whether a product could clear retail terms and still make money.

Dozens of small hardware products spread engineering and inventory costs across categories with no breakout hits to fund them.

Wink was incubated inside Quirky rather than spun out, so a capital-hungry platform competed with the core business for the same dwindling cash.

Retail terms Quirky accepted — unfavorable returns and margin structures — turned every shipment into a loss.

The 2013 GE round funded a two-front expansion (own products plus the connected-home platform) just as the hardware market got harder.

Crowdsourcing ideas solves what to build, not whether the math works. Quirky's community picked products whose retail terms left no margin, and it kept a cash-hungry platform in-house.

Flextronics completed its $15 million purchase of Wink in November 2015, and Wink kept operating under Flex — The Verge reported the following spring that the platform had survived Quirky's fall. Quirky's remaining assets, website included, went to Q Holdings for $4.7 million in late 2015, a sale approved over General Electric's objection. By 2024 the Quirky invention-submission platform itself was no longer accessible.