Ben Kaufman and His Quirky Toy Factory

kaufman headshot 200x300 Ben Kaufman and His Quirky Toy Factory

Got a genius idea for a product? How about a tofu press? An iPhone holster to perch on bike handlebars? A fashionable sling for broken limbs called an “Ouch Pouch?” Ben Kaufman, a 22-year-old entrepreneur and college dropout, wants you to dish out $99 and put it in his hands, or shall we say, Web site, along with an entire community of nitpickers to mold your product from scratch to store shelf.

On June 2, Mr. Kaufman launched the Web site of his new company, quirky, a “social product development company.” On the site, users can sign up for free and get involved in every step of the product-building process—from choosing a design to giving it a snappy name, even figuring out a marketing strategy.

“We don’t make any decisions internally without consulting the community,” Mr. Kaufman told the Observer from his brick-walled office on Avenue B during a sunny afternoon before the launch of his site. Mr. Kaufman has a round, baby face with flushed cheeks, and was dressed in a black T-shirt and Converse sneakers. He talks fast.

Mr. Kaufman explained that users with their own product ideas can submit a rough proposal for $99. Other users of the site vote up or down ideas and designs based on different criteria (from its “cool” factor to its “timely” entrance into the market). A winner is picked every week and Mr. Kaufman and his team draw up prototype dratfs in 3-D images, consult with their contacts in manufacturing shops, and figure out a price for the product. Meanwhile, the community of quirky users choose everything else, down to the color and packaging for the product before it hits the shelves—er—online store.

If a product doesn’t get past the initial voting process, users who submitted the proposal don’t get their $99 back, but can keep all of the crowd-sourcing data that the quirky community provided.

As a reward for all that online input, users get an “influence rating” on each project they are involved in—and they get paid. Out of every dollar generated from a sale, Mr. Kaufman and his team keep $0.70 cents, and $0.30 gets paid to the “community” that helped build it. The guy who submitted the original idea for $99 gets at least 40 percent influence and a minimum of $0.12 of that $0.30. The users that “influenced” the project idea along the way can get a piece based on how much they participated in the process. Quirky becomes the owner of the product’s license.

Paid crowd-sourcing is not a new idea. Amazon’s Mechanical Turk is just one example of it. But Mr. Kaufman said that submitting ideas to his site—instead of phoney product patent companies–might be a better deal.

“There are all these crowd-sourcing projects, but who gets the 500 bucks? The guy who designs the logo!” said Mr. Kaufman. “People sit in a board room, one guy has a louder voice than the others and he’s going to feed off the intern’s idea and make it into his own. He’s going to feed into it and make it better and make it his own, but it was the intern’s idea that sparked the inspiration,” for example.

Quirky, for the record, gets the final rights to the product design, rather than the person who submitted the original idea.

So far, about 80 products have been submitted to quirky. There are currently six products in the quirky store, including the “Ouch Pouch” and a tofu press, along with their first product, which happened to be Mr. Kaufman’s idea, a universal wire retractor called a Sling Back. Each product must have 500 in presales before it is green-lighted for production and delivery. None of the items have reached the presale goal just yet (Mr. Kaufman’s Sling Back is the top seller and has 127 presales).

Mr. Kaufman’s entreprenuerial MO is all about product design with crowd-sourcing in mind. At 18, Mr. Kaufman convinced his parents to re-mortgage their Long Island home for $180,000 so he could make a new toy: retractable headphones for an iPod shuffle. He called it the Song Sling and decided to start an iPod accessories company called Mophie, after his two Golden Retrievers Molly and Sophie. In May 2005, two weeks before his graduation from Portledge School, a private prep school in leafy Locust Valley, he jetted off to China to deal with a production glitch at Song Sling’s manufacturing plant. 

In January 2007, at the MacWorld Expo in San Francisco, he spent a quarter-million dollars on a booth and collected about 125 ideas for Mophie’s next product. After attendees submitted 30,000 votes, the crowd chose an iPod case that also worked as a handy bottle opener and key ring as the final product. Mr. Kaufman and his team pulled off a prototype in 72 hours and eventually sold tens of thousands of the product, called Bevy, in 28 countries.

“It’s a relatively simple product that probably would not have gotten that much traction and, like, left in flea markets, if it didn’t have this amazing story behind it, this story of community development from 30,000 people,” Mr. Kaufman explained. Mophie soon raised $3 million from Village Ventures (based in New York), Fresh Tracks Capital (in Vermont, where Mophie was based) and angel investors. “I sort of looked around and said, ‘Well, we’re only making iPod cases, we could be doing this for everything and every company should be doing this!’ It was right on the cusp of the community development thing,” he added.

He built  “group decision making” software, called Kluster, which powers quirky’s back end.

Quirky is a joint venture between Mr. Kaufman, his Kluster investors, and Jason Port, former director of sales at CBS Sportsline. Marketing “trendspotter” Josh Spear and former Epic Records president Charlie Walk serve as advisers. I had the idea for quirky before I had the idea for mophie,” Mr. Kaufman said. He started with an idea for a pair of headphones. “I was like, well, how am I actually going to make this thing? What if I could just show the world? Who cares if they steal the idea or whatever. If I can just show the world, at least I’ll know, if they say yes or no.”

Mr. Kaufman said he plans on opening a little product factory in his Avenue A location, so we can watch products be built—he says one of his favorite places in the world is in a factory in Vermont, where he created Mophie products. He went to college up there for just six weeks before dropping out, he told The Observer. He was in an international business class and got a call from China about one of his Mophie products. His professor told him to drop the call or leave. “I asked him, do you really want me to listen to your theoretical bullshit when I could actually practice the trade? And he was like, ‘Yeah,’ and I was like, that was it,” Mr. Kaufman said. “I said, ‘Peace,’ and never came back.”

He doesn’t plan to return anytime soon.