Finally, a loser!
It was pretty shocking to me, too, when Quirky failed this summer because it did seem like a great concept. To me, it seems like the first portion of the Quirky process (the idea submission of new products via inventors/contributors) is still valid. I agree with you; the issue seems to be in choosing which products to engineer and manufacture and then actually pulling off the merchandising and sales process. Did Quirky even do market research to see if their doggie water fountain would be accepted by consumers, or did they just trust that contributors’ votes would translate into sales?
I wonder if other companies with large R&D departments can learn from the first portion of the Quirky process, somehow leveraging loyal users’ ideas and suggestions to iterate on their products, instead of developing everything in-house in the early stages of R&D. Even if they do crowdsource brainstorming, it should be up to those companies to determine which product innovation ideas will lead to increased sales & profit.
Hey Andrea, cool choice! I agree with your points that as long as consumers want frozen yogurt, 16 Handles has designed a very effective operating model to sell it. I wonder, though, if 16 Handles will be able to survive in the long-term or if this frozen yogurt infatuation is going to be short-lived. I’ve noticed a pattern dessert obsessions that become fads; for example, it seems like cupcakes were a huge hit prior to frozen yogurt, and hundreds of shops and some large chains opened up. Now that it is slowing down, some of those cupcake chains are running into trouble (like Crumbs, who went into bankruptcy). Frozen yogurt is still doing well, but I could see it maturing and then declining really quickly as people move on to the next dessert obsession (doughnuts? macarons?).
Xav, great post. Watching IKEA grow, I’ve wondered when a major competitor would arise on the scene, but there seems to be no direct and significant competitor that I’m aware of. The design strength and economies of scale advantages that you talk about definitely contribute to IKEA’s success. It’s interesting that you note that IKEA makes compact furniture that can ship in a box; this must save them significantly both on shipping to the IKEA stores and then on shipping to the end customer. They don’t have to deal with an in-house delivery team bringing huge couches/tables/beds to a house or apartment; they can rely on the consumer to build it themselves.
The other difference I’ve noticed about IKEA as compared to other furniture-makers is that there is no custom option on any design, whereas most other companies will allow you to specify the material, size, pieces, and have them custom made and shipped. Given there’s a trade-off of low-cost vs. high flexibility, IKEA has solidly landed in the low-cost camp.