Failory - 3 Reasons Why Quirky Failed

Hey — It's Nico.

This is issue #2 of this 4-email series covering the Stories of Big Failed Startups. This week, the story of Quirky.

Quirky was founded in 2009, becoming one of the first community-based platforms for investors.

Anyone could pitch their product ideas on the platform, which were voted on by the community. Quirky then created and sold the winning products, giving the inventor 10% of the profits.

In just a few years, Quirky raised $185M from notable investors (Andreessen Horowitz, Kleiner Perkins, General Electric) and grew their base to 1.1M users.

​Yet, in 2015 Quirky filed for bankruptcy.​

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Many factors contributed to Quirky's failure. In the article, we cover the 3 main ones:

1. Voting System: Having an army of amateurs to vote and approve products that were often unscalable and lacked clear product-market fit unsurprisingly turned out to be a bad idea.
2. Lack of Focus: In its 6-year lifespan, Quirky produced around 400 significantly different products. Once launched, products weren't improved. Achieving PMF without adjusting your offering based on market feedback is impossible.
3. Branding Troubles: Quirky's website looked like a catalog of all kinds of random products. The company had a confusing brand identity, which is a problem for building brand loyalty and getting repeat customers.

In 2017, Quirky was raised from the dead, with a different business model that fixed these problems they used to have. They now claim to have +1.3M members in their community and to have created 321K products.

​Here's our analysis of Quirky's failure.​

I hope you're finding useful these failed startup stories. In the 2 following weeks, I'll be sharing the stories of:

• A failed NPO hardly hit by COVID.
• A failed Fintech startup with a $150M funding.

​Here's last week's article, in case you missed it. It's the failure story of Atrium, a Legal Tech startup co-founded by Justin Kan, Twitch.TV's founder.

Finally, here are my 3 recommended resources of the week:

• ​The BEST Marketing Growth Hack: When Ahrefs decided to sponsor an SEO event, they asked their community for innovative ideas. The winner idea was to place some SEO data for the keyword "Coffee" in the event's coffee cups. This got them a ton of exposure in social networks.
• ​5 Core Startup Metrics: Retention, Growth Rate, CAC, Conversion, and LTV. In this video, NFX shares why these are the main metrics you should track and how to create a data culture in your startup.
• ​Lifestyle-First Approach to Indie Hacking: Daniel Vassallo quit his $500k/year job at Amazon to become an Indie Hacker. In less than two years, he built a portfolio of products. In this podcast episode, he shares how he has built a lifestyle-first business.

That was all for this week's issue. I hope you enjoyed today’s article and curated resources.

Cheers,

Nico