Snapshot of Kluster, a Project Collaboration Company

Ben Kaufman, a beefy, bespectacled 21-year-old from Long Island, is nothing short of a genius when it comes to public relations, and he’s demonstrating just how far that kind of intelligence can take a budding entrepreneur.

Kaufman’s business story began a few years ago, when he dropped out of college six weeks after enrolling so that he could focus on Mophie, a small company he’d started in high school. (His very helpful mother mortgaged their home to get him started.)

Mophie initially produced numerous IPod accessories like arm bands and clips, but the market quickly grew saturated. So, at the Macworld conference in San Francisco a couple of years ago, Kaufman tried something new. “We just had this empty booth and said that instead of designing products, we’re going to ask everyone at the show to design our 2007 product line.” Kaufman says that within four hours, he had 125 legitimate business ideas. By the end of the week, the booth had become a full-scale model shop, and on the last day of the conference, Mophie had a new product called the Bevy, an all-in-one protective case for the IPod shuffle with an earbud wrap, a key chain and a bottle opener. Kaufman says he sold 40,000 of them around the world, then quickly sold Mophie for a small profit.

Kaufman’s next move was to transform his MacWorld experience into an online company called Kluster that uses the collective wisdom of its registered users to design marketing approaches as well as actual products. Tom Rielly, who helps organize the prestigious technology, entertainment, and design conference known as TED, had visited Mophie’s booth at Macworld and seen the excitement Kaufman created. As a result, he asked Kaufman to launch Kluster at TED, where he could capitalize on the brainpower of TED’s thousand or so attendees.

Unfortunately for Kaufman, one outcome of that TED show this past February was a “cultural-awareness-raising board game” that Kluster is having to have manufacturered. (“We’ll make the game, but we are not getting into the business of manufacturing goods,” he says.) However, TED did generate stories in the New York Times and BusinessWeek, as well as interest from VCs. (Kluster, which already has approximately $2 million in funding from a Village Ventures affiliate, is closing a “much bigger round” at summer’ end, according to Kaufman.).

Kaufman, who oversees a staff of 10, is now trying to capitalize on all of this attention. On Thursday, Kluster will launch a subscription model initially priced at just $100 a month that will allow small businesses to harness the creative firepower of their customers. For example, our very own Dan Primack could rent Kluster’s tools and build a community tasked with improving PEHub, at a Kluster-hosted site.

Kluster is also working on developing internal applications for big companies that want their employees to become more involved in the creative process. Kaufman says that each custom application takes about $200,000 and three weeks to develop. It’s a costly endeavor, especially when one considers that wikis are free. Still, Kaufman says he already has three customers – an advertising agency, a big consumer goods company, and, ironically, TED. “Finally, I’m getting some of that conference money back,” says Kaufman with a laugh.

Kluster is a work in progress, and Kaufman clearly doesn’t have all of the answers, but in an increasingly interconnected word, crowdsourcing product and marketing ideas is undoubtedly on the rise. For the young entrepreneur, there’s clearly strength in numbers.

Readers: Think that’s a crummy conclusion? Me, too. What would you suggest? Let’s crowdsource! Comment below, or write me at connie.loizos [at] thomsonreuters [dot] com.