GE’s Quirky Idea

GE partnered, invested in, and shared patents with Quirky, a community-led invention platform. The goal was to enable everyday consumers to access connected devices. Would opening GE's patent portfolio to the masses create value for GE, Quirky, and consumers?

Having a cool room when you come home to your 6th floor walk-up apartment in the summer is a necessity. But keeping your AC unit on while away isn’t a great option. My remedy was to invest in a “smart” air conditioner, Aros, that would let me turn on the air when I was a half hour from home.


Aros is the product of a startup called Quirky. What Threadless is for T-shirts, Quirky is for inventions; the public votes on ideas for the company to fund and create. Several of Quirky’s products are centered on the Internet of Things (“IoT”), or devices connected to the internet primarily in order to control device settings or monitor statuses. The IoT represents a significant market opportunity, with 24 billion IoT devices expected to be installed by 2020. [1]

Given such a large market opportunity, it’s no wonder several of the most traditional industrial and technology companies, including General Electric, wanted to be a part of the innovation frontier. According to GE’s CMO, “As GE grows its core by connecting its brilliant industrial machines to the Internet, we think it is important that consumers experience connected things in easy-to-use, everyday ways.”[2] One way that GE has accessed this consumer experience is to partner with start-ups and innovative entrepreneurs to accelerate innovation, rather than significantly altering its traditional means of operating.

This desire to innovate the consumer experience led GE to partner with Quirky. In April 2013, GE announced that it had opened thousands of patents to users on the Quirky platform. Inventors were free to use any of GE’s patents available on Quirky to develop their own devices; if any of those devices were successfully launched, both Quirky and GE would get a cut of the profits. GE announced some of its logic behind this tactic: “With over 2,522 patents filed this past year, not every idea will find a home in our own technology portfolio.”[3]

Four smart home products were created through this initial Quirky + GE partnership, see exhibit 1 for an introduction to one of these, Spotter. Home Depot agreed to sell all connected home products developed through this partnership at its 2,000 retail stores.[4]

Exhibit 1 – Quirky + GE Spotter Intro

To further solidify its partnership with Quirky, GE invested $30 million in the company in November 2013.[5] Following this investment, Quirky and GE developed the aforementioned Aros air conditioning unit. However, the patent-sharing experiment came to an end more abruptly than expected. In September of 2014, GE sold its appliance segment to Electrolux, thereby forcing Quirky to remove 500 patents from its development website as they were now owned by Electrolux. GE and Quirky said they would still work together to create connected home products. While the patent loss seemed to be significant, some questioned the efficacy of sharing the patents at all. In the year and a half since the patent sharing partnership emerged, zero inventions were brought to the market from independent inventor ideas utilizing the patents.[6]

The Quirky + GE partnership further declined in September 2015 after Quirky declared bankruptcy. While the startup sourced some interesting and high-potential products, it had a difficult time successfully bringing products to market.[7] Not long after Quirky announced its bankruptcy, GE accused Quirky of failing to keep up with customer service promises on their partnered products, causing significant damage to its reputation. [8]

Despite its quick downfall, the Quirky + GE partnership is an interesting example of a traditional industrial firm looking to capitalize on the shift to digital consumer products, specifically those connected to our home. Utilizing a crowd-source and startup driven platform was an interesting choice from an operating perspective. Ultimately, the partnership provided little value to either GE or Quirky. However, given GE’s earnings of $15 billion in 2013, the $30 million partnership with Quirky was likely a drop in the bucket, and if anything, an interesting foray into startups for GE.

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[1] BI Intelligence. “The $6 Trillion Opportunity in IoT.” Business Insider. http://www.businessinsider.com/iot-ecosystem-what-is-the-internet-of-things-2016-2. Accessed November 16, 2016.

[2] “GE & Quirky Expand Partnership to Grow New Line of Connected Devices & Accelerate WINK Consumer Platform.” BusinessWire Online, http://www.businesswire.com/news/home/20131113005608/en/GE-Quirky-Expand-Partnership-Grow-Line-Connected, accessed November 16, 2016

[3] “A Quirky Idea: Turning Patents into Consumer Products.” GE Global Research Online, http://www.geglobalresearch.com/innovation/quirky-idea-turning-patents-consumer-products, accessed November 16, 2016

[4] “GE & Quirky Expand Partnership to Grow New Line of Connected Devices & Accelerate WINK Consumer Platform.” BusinessWire Online, http://www.businesswire.com/news/home/20131113005608/en/GE-Quirky-Expand-Partnership-Grow-Line-Connected, accessed November 16, 2016

[5] Ibid.

[6] Mann, Ted. “Quirky Loses Access to GE Appliance Patent After Electrolux Sale.” http://blogs.wsj.com/corporate-intelligence/2014/09/10/quirky-loses-access-to-ge-appliance-patents-after-electrolux-sale/ . Accessed November 16, 2016.

[7] Kastrenakes, Jacob. “Quirky files for bankruptcy and announces plans to sell Wink.” http://www.theverge.com/2015/9/22/9371127/quirky-bankruptcy-wink-sale. Accessed November 15, 2016.

[8] Gleason, Stephanie and Mann, Tedd. “GE Says Quirky Has Hurt its Reputation.” http://www.wsj.com/articles/ge-says-quirky-has-hurt-its-reputation-1449179311. Accessed November 15, 2016.

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6 thoughts on “GE’s Quirky Idea

  1. Finally I’ve found a failure story! Thank you – it was very interesting to read! How do you think GE would pursue their innovation strategy and digitalization initiatives (if they would) after that not satisfying partnership experience?

  2. I think this kind of a JV between an established player and the community-at-large is super interesting. I wonder what would have allowed the partnership to succeed? I think crowdsourcing is a fantastic way to turbocharge a larger corporation’s R&D at a fraction of the cost; however, it seems to me that the partnership needs to be more thought through on a number of points, such as go-to-market strategy and controls.

  3. Thanks for highlighting this failure case, which all of us hopefully can learn from! I wonder whether Quirky was doomed to fail regardless of partner or if the choice of GE as partner somehow contributed to the failure. This makes me think of the example Katherine has shared for us in class of bringing a biotech startup into a large pharma company and witnessing the culture of the startup eventually flounder as the corporate takes over. Do you think this happened at Quirky? Aside from the access to capital, could another partner have provided more support/know-how to make Quirky succeed? If so, who do you think that would have been?

  4. I like crowdsourcing for raising money, but I never liked Quirky’s model of crowdsourcing the entire product development lifecycle. I think too many inputs can be a bad thing. I think Quirky’s failure was inevitable.

    Thanks for sharing a failure story!

  5. I really enjoyed this article, especially for the dramatic end! One thing that might be interesting context, is how this fits into GE’s broader strategy of becoming a “top 10 software company” by 2020. Moving into software has been a huge push for the company, and Jeff Immelt has been re-configuring the organization around this strategy starting last year, even requiring all new hires to know how to code. As part of this, they built a new software headquarters out in Silicon Valley. It’s still quite a big outstanding question whether the company will be successful in this or not (e.g., whether they would be better off just partnering with startups like Quirky or to build the capabilities in house), but the idea is to essentially vertically integrate the company from the hardware, to the data collection software analytics. Here’s a good article from the summer about their push into digital and how they view the threat as an existential one: http://www.nytimes.com/2016/08/28/technology/ge-the-124-year-old-software-start-up.html

  6. It’s great to see a post about Quirky! While at GE, I studied the Aros air conditioner. Aros received decent reviews by various experts with excitement about its fantastic design, smart features and potential for energy cost savings. It was a good match: Aros combined traditional GE air conditioner technology with integrated smartphone application and the internet of things.

    However, experts and consumers were disappointed by a few things: the loud noise, gap caused by ventilation flaps, glitches in smart functions, inconvenience to remove air filter for cleaning, and absence of remote control set.

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