If you are a struggling general or trade contractor, battling cash flow and business development and marketing challenges, you might find some solace — and learn some lessons — from one of the biggest and most rapid flameouts in recent business history — Quirky’s crash and burn.
The invention tech started in 2009 and managed to raise about $170 million in venture capital. It had some of the best and brightest minds in the business. And the idea seemed to have it all: Crowd-source new inventions, improve them through community interaction, and then market them big-scale.
Alas the idea didn’t work. There were plenty of inventions, and quite a few of them went to market, but most of them bombed. I expect that many products were rushed to market with high-volume manufacturing that would have proven less-than-effective with a little more testing and patience. And, as at least one observer noted, good ideas often need enhancements and tweaks and improvements before they are made into great ongoing creations.
In fact, I think Quirky’s biggest problem from the start is it had too much money. Scarcity invites discipline. (Too much scarcity can invite desperation; not good either, so there is a balance here.) If you have limited resources, you are thoughtful about your costs, risks, and strategies. In business, you don’t want to be paralyzed by inaction, but equally don’t want to blow the wad on several simultaneous and ill-defined efforts.
As it is, it seems the contract manufacturer for most of Quirky’s products, Flextronics, will take a bath as the largest unsecured creditor, but may end up with some of the worthy assets of the failed start-up. If your business doesn’t have $170 million in capital to burn, be thankful.