Academic journal article Journal of Case Studies

Sharing a Product Idea: Is It Worth the Cost?

Academic journal article Journal of Case Studies

Sharing a Product Idea: Is It Worth the Cost?

Article excerpt

Introduction

On April 25, 2014, Garthen Leslie and Ben Kaufman, Quirky founder and CEO, appeared on the Bloomberg television show, In the Loop (Bloomberg Business, 2014), hosted by Betty Liu, to discuss how they had teamed up to move Garthen's idea to an actual product. Garthen had invented a smartphone application that could control and monitor the operation of a window air conditioner. This invention evolved into the Aros smart air conditioner, a Quirky and GE cobranded product.

It had been a little over a year since that appearance; yet a few of Garthen's close friends and family members still enjoyed kidding him about his "deer in the headlights" reaction to Betty's question regarding whether or not his share of potential earnings from his invention was enough. As he relaxed at home on this muggy afternoon in July 2015, with one of the first manufactured Aros, programmed at a comfortable temperature, Garthen recalled the exact revenue sharing conversation that occurred halfway through that interview:

Betty Liu: How does this work with GE? Where is the revenue sharing
here?

Ben: So, we actually give GE a bit of a royalty when this thing sells.
So that's how it works.

Betty: Okay so they get a royalty, you get paid for it and what about
Garthen?

Ben: Garthen gets cut into the revenue. Quirky across all of its
products, every single product it sells, we share 10% of the revenue
with the community, and Garthen will be a big part of that 10% on Aros.

Betty: Is 10% enough?

Garthen: Absolutely, I'm excited about that. We are all excited about
the product and how well it is gonna do in the marketplace. In a couple
of weeks, we 'll start having it in stores and it will do well
(Bloomberg Business, 2014).

Garthen's "deer in the headlights" expression, followed by his quick affirmative answer was in reaction to the timing of Betty's question regarding his share of potential earnings from sales of the Aros. Having such a question asked when he was sitting on the right side of Betty and Ben was sitting on her left side, created an awkward moment. Taking into consideration the role that Quirky had played in helping him take his idea to the marketplace, Garthen knew that the set of the In the Loop (Bloomberg Business, n.d.) was definitely not the time and place to make any reference to hindsight being 20/20; which at that time was not the case.

Garthen had given considerable thought over the past 15 months to Betty's question regarding his share of potential earnings from sales of the Aros (i.e., Is 10% enough?). As he reminisced about the Aros' evolution, Garthen wondered if his answer to Betty's question would be the same if it were asked today.

Quirky Background

Ben Kaufman, the CEO and founder of Quirky, started this New-York based company in 2009 at the age of 23, "with a three-word mission statement to 'to make invention accessible'" (Bloomberg Business, 2014). This community led innovation platform made "invention accessible by bringing real people's product ideas to life" (GE Appliances, 2014, para. 8).

Quirky's in-house design team and engineers collaborated with an online international community to release new products weekly (Kellner, 2013). Ideas submitted over the years by inventors have fallen into a wide range of categories that included: electronics, health & fitness, home, kitchen, parenting, toys & baby--Mattel, travel, wild card, Apple accessories, connected home--Poppy, lighting--GE, audio--Harman, and beverages (Quirky, n.d.).

Garthen Leslie's Idea Submission

Garthen's smart air conditioning idea began fermenting in his head while he was an employee with the Department of Energy, where he was tasked with conserving resources; but at home his air conditioner was by no means energy efficient. Years of choosing between wasting energy in his Maryland home or suffering through the stuffy summer heat provided the impetus for thinking about how to create a smart air conditioner that could be controlled from his office. …

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