Quirky – Additional Funding While More Departures

Reposted from Yahoo Finance.

Business Insider, By Jillian D’Onfro

Quirky, the New York City startup with the goal of “making invention accessible,” is close to closing a new round of funding, even as more employees leave.

CEO Ben Kaufman told Business Insider in April that he planned on raising more money, and that close is “just days away,” Fortune’s Dan Primack and Stacey Higginbotham report.

The funding comes at a crucial time for the company, which has had an incredibly tumultuous year.

In the past seven months it gone through multiple rounds of lay-offsburned through tens of millions of dollars, and discovered that its founding business model broke at scale.

Now, Business Insider has learned, Quirky’s chief technology officer, Steven Heintz, has left the company to work at Bay Area-based Flextronics Invention Lab, and Quirky appears to have shut down the San Francisco office where he was based.

We also heard from a former employee that Quirky’s “Internet of Things” subsidiary Wink was almost sold, but the would-be buyer backed out after a major malfunction of Wink’s products in April.

(Quirky did not initially respond to a call and multiple emails for this story. We’ll update if we hear back.)

When Kaufman founded Quirky in 2009, it allowed ordinary people to become inventors by submitting ideas that Quirky would turn into real products and sell at stores like Target, Staples, and Bed Bath & Beyond. As the company grew, it started accepting more complex product ideas, which not only cost more to manufacture, but often sold far fewer units than its simpler, cheaper items.

For example, the company spent nearly $400,000 developing a Bluetooth speaker that only sold 28 units.

Meanwhile, the company created a subsidiary “Internet of Things” business called Wink, which it launched after striking a deal with General Electric in 2013. The partnership gave Wink access to old GE patents and it was an impressive vote of confidence from a major company in a young startup.

But Wink’s first product launches in 2014 were far from smooth. Disappointment is rife in forum posts about various software products and Gizmodo ran an extremely harsh review of the Wink system earlier this year.

In September 2014, Quirky hired a new CFO who took a toll of the company’s financials and went into “fix-it mode.”

“We got a CFO in here who knew what the hell he was doing, and he told us a harsher reality than anyone else would tell us,” Kaufman previously told Business Insider.

By February, Quirky decided to hire bankers to help it either sell Wink or raise new outside investment.

“There’s a point where it doesn’t make sense for one unprofitable startup to keep funding another unprofitable startup,” Kaufman told Fortune.

As that process got started, Quirky decided to scale back in a few ways.

It had a round of layoffs (which, compounded with cuts in November and December, amounted to more 20% of the company), decided to stop making so many products, and shut down its ecommerce site. A new initiative, called Powered By Quirky, would align the startup with major brands like Mattell and headphone maker Harman and help those corporations figure out new products to launch. Quirky itself would only manufacture products in three categories: “connected home,” “electronics,” and “appliances.”

All told, it had an overall burn of $150 million on net-losses of $120 million. But the process of selling or raising money for Wink was “moving along,” Kaufman told Fortune, until disaster struck.

 

In April, the company had to do an expensive nationwide recall of its Wink products because of a “completely preventable” security error. A former Quirky employee tells us that a company that had previously been interested in an acquisition pulled out after the malfunction. Kaufman told Fortune that inventory backlogs for Wink products are still not fully resolved. 

In May, Quirky’s chief technology officer, Steven Heintz, left the company to work at Bay Area-based Flextronics Invention Lab. In early June, sources told Business Insider that Quirky had laid off between 20 and 30 more employees.

Several former Quirky employees tell Business Insider that the remaining people in Quirky’s San Francisco office either followed Heintz to Flextronics, started working at Wink, or lost their jobs. Kaufman declined to comment at the time of that report, but three former employees say that the office also sold all of its machine equipment, like 3D printers and a plastic injection molding machine, to Flextronics.

What’s next?

Selling off that machinery would make sense, because Kaufman tells Fortune that Quirky will stop making any of its own products at allIt’s looking for Powered By Quirky partners for the “electronics” category it had decided to stick with in February.

Complete article here: http://finance.yahoo.com/news/fresh-funding-more-departures-quirky-121324438.html

Entrepreneurship in Africa

Hadi Aboukhater - The Sankalp Africa Summit of 2015 launched last month. The summit brought together over 300 African entrepreneurs, government and corporate representatives, and investors to discuss entrepreneurial efforts that establish social change and democracy. Speakers at the summit reiterated the need for African entrepreneurs and investors to work together to solve systemic market needs. The emphasis being that collaboration is necessary to solve Africa’s social, economic, and financial problems.

The entrepreneurs were quite adept to identifying the gaps that need to be addressed and creating innovative solutions to close these gaps. Collaboration with like-minded individuals was also rampant throughout the summit.

Evelyn Omala is the Program Officer for the Segal Family Foundation and was in attendance last week. She travels around Africa building relationships with NGO partners and other potential individuals at the foreground of social change in Africa. SFF’s philosophy is to catch quality companies at the beginning stages of development who might not make enough capital to catch the eyes of investors. There are a lot of small startups within small communities that are extremely popular within their community and foster significant economic and social change.

The Chairman of the Kenya Young Parliamentarians Association, Johnson Sakaja, spoke at the Sankalp summit on the importance of increased investors to match the increasing numbers of entrepreneurs in Africa. There are plenty of startups in Africa that have created significant impacts in their community, so the next step is to scale these companies with help from investors.

The Sankalp summit has made it apparent that investors are turning their attention to Africa. The Global Impact Investing Network has revealed that investors are focusing on Sub Saharan Africa more than any other region when it comes to funding priorities for social finance. Impact investment is on the rise as more and more investors are looking to spend their capital on significant social impacts.

Hadi Aboukhater Professional Video Bio

Hadi Aboukhater has recently created a video bio on his Vimeo profile. Hadi is a self-made business consultant that has extensive experience in developing growth companies and educating young entrepreneurs throughout various stages of the development process. Hadi has a keen eye for business development and market variance, as he has taken part of multiple industries during their best growth years. Today, Hadi is focusing his consulting abilities on tech startups, mobile applications, and real estate. He believes that these industries have a lot more room to grow as he offerers his entrepreneurial advice from his experience in building businesses. Take a look at his video biography below:

Hadi Aboukhater Video Bio:

Hadi Aboukhater Professional Video Biography from Hadi Aboukhater on Vimeo.

Five Tips Towards Starting New Business

Hadi-Aboukhater-New-BusinessAs the Baby Boomers retire and find that they might not be as secure in their funding as they had perhaps hoped to be, an issue starts to arise.  Many are facing forced downsizing from the familiarity and stability of their corporate positions.  Alternatively, even those who choose to retire on their own terms are finding that the pension they were promised has been severely reduced, or even that what they had planned to have isn’t enough for their monthly expenses.  The obvious solution is to take control of one’s own destiny—to become an entrepreneur and manage one’s own business.  However, to many fifty-something Baby Boomers, this proposition is relatively daunting, according to an article recently completed by The Huffington Post; these works are used to the stability of the corporate world and fear they aren’t equipped to manage the risky and fast-paced start-up game.

As a result, the article sought to provide several tips for those aging corporate workers who may be interested in starting their own business to supplement their retirement income.  Fundamentally, the first step is to stop saying it can’t be done, or that the individual can’t start and manage their own business endeavor.  In moments of insecurity, the individual need look no further than their resume—a listing of themselves, their career and their accomplishments—to know they are more than equipped in business experience to function as an entrepreneur.  Next, once the individual has bolstered their own sense of confidence, they must seek as much advice as is possible.  Ask everyone possible on what the individual is best equipped for and, in turn, listen very carefully.  Doing so could offer a number of surprising perceptions, including insights into how the individual is perceived, especially in terms of strengths and weaknesses.

Before moving forward with creating the business, the individual must also make peace with his or her perceived past disappointments and mistakes.  If the individual continues to allow these items to work as a barrier, even the best intentions are doomed to fail.  The final step before truly starting the endeavor is to set one’s own criteria; finalize the parameters of the plan of action, including what products, services or work procedures best suits the individual’s personality.  This also includes who the entrepreneur may wish to work with, and what the work culture should feel like.  Finally, it is important to remember that taking the first step in creating the business doesn’t need to be some form of a grand gesture; make a list of things that can be completed right now and, from there, choose the easiest and least intimidating and proceed full speed ahead.

 

4 Key Business Finance Factors That Determine Future Growth

Hadi Aboukhater business finance entrepreneurshipBelow are 5 key financial factors to be aware of when studying a business’s financial model and future growth.

1)   Net income – There are multiple net income ratios to study at when deciphering a business’s bottom line. For example, the ratio of gross profit over net sales allows the owner to determine the business’s profit margins compared to similar companies. The ratio of net income over net worth shows the owner whether or not the company will earn a reasonable return on their product. Last, the ratio of net income over total assets tells an owner whether or not the company is obtaining a favorable rate of return on their assets.

2)   Sales – Sales numbers can appear better than they really are. When thinking about purchasing a business, make sure to read between the lines when studying the growth in sales and earnings. It is important to distinguish whether the growth rate is because of higher prices or an increased sales volume. It is also important to be aware of the marketplace. A market can be static, so there is little potential for growth.

3)   Operating environment – The way in which the business environment operates and its corporate culture is critical to studying long-term growth. If a company mostly deals with international clients, it is important to research the long-term political environment of the countries in question. It is important to look at economic and consumer trends to make sure that the product will still be popular 10 years from now. Can your product keep customers for life, or is this just a one and done product?

4)   Fixed assets – Fixed assets are assets that are tangible and cannot be easily converted into cash; such as property, plant, and equipment. If a company has excessive fixed assets, it is important to understand why. If equipment goes unused, this can be a sign that demand is declining or that the owner miscalculated manufacturing needs.

3 Public Relations Lessons Everyone Must Read

By Mark Fidelman The primal questions of public relations: How do you react to a scandal? How do you generate stories that attract the right viewers? How do you launch a new product when no one has heard of you before? Public relations (PR) is the art of telling a story through the media. PR can make you instantly famous or instantly infamous – and everything in between. …read more

Source:: Hadi Aboukhater Forbes Entrepreneurship Feed

Opportunity Is About To Knock So Get Ready To Open Your Door

By Amy Rees Anderson It has been said that the key to success is being ready to act when opportunity comes knocking at your door. Well hopefully you are ready, because opportunity is about to start knocking with a billion dollar vengeance! …read more

Source:: Hadi Aboukhater Forbes Entrepreneurship Feed

Big Reckoning For Big Philanthropy? New Calls For Democracy, Reason And Impact

By Tom Watson Giving reflects the times. And in the years since the Great Recession in the U.S. and around the world, the organized world of philanthropy saw a contraction and mild recovery that mirrored the larger economy that formal giving is a part of. Yet culturally, the social sector – and especially the well-organized and often hidebound universe of big philanthropy – is recovering more slowly. …read more

Source:: Hadi Aboukhater Forbes Entrepreneurship Feed