Failed Startup of the Quirky Company - Analysis Paper Example

The startup company that failed from its business operations is Quirky. The companys CEO, Ben Kaufman, founded Quirky in 2009, focusing it on innovation. The headquarters of the firm was New York. In their platform, individuals would vote on products and ideas they loved, and in turn, the company would turn those thoughts into products. More so, it created Wink, an auxiliary Internet of Things, which was the focal point for smartphones. The company collaborated with investors to make their ideas successful. They raised about $185 from its investors. It made products such as power cord, which made it get hundreds of thousands of dollars. The firm had over one million registered online users and more than 400 Quirky-generated products to the market, which they sold on their website and other retailers such as Amazon and Home Depot.

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Reason it Failed

Quirky failed due to its company finances. In an interview with Allan Murray, the Fortune editor, Ben Kaufman explains that the companys business model failed to provide an innovation platform for his firm to succeed. In the Brainstorm Tech interview at approximately (38 seconds), Ben Kaufman asserts that the company failed because their business margins were thin. He explains further by stating that they were making a thin amount of gross margin in its Wink platform and used large amount of expenses. Kaufman avows that they are still in the retail business and the only difference is that they do not use their capital (2.23 minutes). In a report on the New York Times, Its business model made the company file for bankruptcy in 2015. Lohr (p.1) affirms that the company filed for bankruptcy because it was seeking protection from its creditors while it attempted to sale all its assets. Apparently, Quirky found it costly to manage all investors, transform raw ideas into products, and orchestrate manufacturing and distribution.

How it Handed their Exit from Operations

Due to its failure, the CEO, Ben Kaufman, asserts that he is hopeful about the future. Bort (p.1) affirms that according to Kaufman, the companys new direction, powered by quirky, will have the ability to attract new backers. Recently, the company attracted new manufacturers like Harmon, Puppy, Mattel, and GE who work with inventors to produce brands in their name (Bort p.1). As the author explains, Kaufman thinks that working with other manufacturers will make Quirkys ideas to be heard. According to Kaufman, they would rather work with Mattel who can make five products in a year, than their inventors who make ten toys because five of them will be successful with the Mattel brand name. Evidently, the companys founder is worried about the costs that they will have to incur when making their products. As it appears, they feel comfortable working with other manufactures to produce their brands.

Recommendations

The following are recommendations for changes that would have occurred

The company would have made enough planning in regards to projected budget, funding, and marketing strategy.

They should have aligned each of the business ideas with the companys goals for the future to avoid overspending.

Before designing a product, they should have ensured that it would sell in the market. Doing so would have made them sell all the products they invented.

The company should have a reasonable profit margin

Quirky should plan and execute the steady inflow and outflow of cash to help them in harsh economic times.

Works Cited

Bort, Julie. Ben Kaufman is surprisingly open about why Quirky struggled and what he's doing

about it. 2015. Business Insider. Accessible at http://www.businessinsider.com/ben-kaufman-on-why-quirky-failed-2015-7?IR=T

Brainstorm Tech. Quirkys CEO: Quirky is out of money and needs to find funds for itself and

Wink. 2015. Fortune Tech. Accessible at http://fortune.com/2015/07/15/kaufman-quirky-wink/

Lohr, Steve. Quirky, an Invention Start-Up, Files for Bankruptcy. 2015. The New York Times.Accessible at https://www.nytimes.com/2015/09/23/business/the-invention-start-up-quirky-files-for-bankruptcy.html?_r=0