{"id":17895,"date":"2016-11-18T16:56:47","date_gmt":"2016-11-18T21:56:47","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/ges-quirky-idea\/"},"modified":"2016-11-18T16:56:47","modified_gmt":"2016-11-18T21:56:47","slug":"ges-quirky-idea","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/ges-quirky-idea\/","title":{"rendered":"GE\u2019s Quirky Idea"},"content":{"rendered":"

Having a cool room when you come home to your 6th<\/sup> floor walk-up apartment in the summer is a necessity. But keeping your AC unit on while away isn\u2019t a great option. My remedy was to invest in a \u201csmart\u201d air conditioner, Aros, that would let me turn on the air when I was a half hour from home.<\/p>\n

\n

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\u2019s products are centered on the Internet of Things (\u201cIoT\u201d), 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]<\/a><\/p>\n

Given such a large market opportunity, it\u2019s 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\u2019s CMO, \u201cAs 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.\u201d[2]<\/a> 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.<\/p>\n

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\u2019s 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: \u201cWith over 2,522 patents filed this past year, not every idea will find a home in our own technology portfolio.\u201d[3]<\/a><\/p>\n

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]<\/a><\/p>\n

Exhibit 1 \u2013 Quirky + GE Spotter Intro<\/em><\/strong><\/p>\n

http:\/\/www.youtube.com\/watch?v=9zXqp17LA8c<\/a><\/p>\n

To further solidify its partnership with Quirky, GE invested $30 million in the company in November 2013.[5]<\/a> 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]<\/a><\/p>\n

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]<\/a> 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.\u00a0[8]<\/a><\/p>\n

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\u2019s 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.<\/p>\n

(787 Words)<\/p>\n

[1]<\/a> BI Intelligence. \u201cThe $6 Trillion Opportunity in IoT.\u201d Business Insider. http:\/\/www.businessinsider.com\/iot-ecosystem-what-is-the-internet-of-things-2016-2<\/a>. Accessed November 16, 2016.<\/p>\n

[2]<\/a> \u201cGE & Quirky Expand Partnership to Grow New Line of Connected Devices & Accelerate WINK Consumer Platform.\u201d BusinessWire Online, http:\/\/www.businesswire.com\/news\/home\/20131113005608\/en\/GE-Quirky-Expand-Partnership-Grow-Line-Connected<\/a>, accessed November 16, 2016<\/p>\n

[3]<\/a> \u201cA Quirky Idea: Turning Patents into Consumer Products.\u201d GE Global Research Online, http:\/\/www.geglobalresearch.com\/innovation\/quirky-idea-turning-patents-consumer-products<\/a>, accessed November 16, 2016<\/p>\n

[4]<\/a> \u201cGE & Quirky Expand Partnership to Grow New Line of Connected Devices & Accelerate WINK Consumer Platform.\u201d BusinessWire Online, http:\/\/www.businesswire.com\/news\/home\/20131113005608\/en\/GE-Quirky-Expand-Partnership-Grow-Line-Connected<\/a>, accessed November 16, 2016<\/p>\n

[5]<\/a> Ibid.<\/p>\n

[6]<\/a> Mann, Ted. \u201cQuirky Loses Access to GE Appliance Patent After Electrolux Sale.\u201d http:\/\/blogs.wsj.com\/corporate-intelligence\/2014\/09\/10\/quirky-loses-access-to-ge-appliance-patents-after-electrolux-sale\/ . Accessed November 16, 2016.<\/p>\n

[7]<\/a> Kastrenakes, Jacob. \u201cQuirky files for bankruptcy and announces plans to sell Wink.\u201d http:\/\/www.theverge.com\/2015\/9\/22\/9371127\/quirky-bankruptcy-wink-sale<\/a>. Accessed November 15, 2016.<\/p>\n

[8]<\/a> Gleason, Stephanie and Mann, Tedd. \u201cGE Says Quirky Has Hurt its Reputation.\u201d http:\/\/www.wsj.com\/articles\/ge-says-quirky-has-hurt-its-reputation-1449179311<\/a>. Accessed November 15, 2016.<\/p>\n","protected":false},"excerpt":{"rendered":"

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. 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