I recently attended an interesting media dinner hosted by VC firm Norwest Venture Partners (NVP) and featuring three of its startups: ModCloth, Motif, and Quirky.

NVP has done well lately, with the recent success of the IPO for RetailMeNot, which debuted with a market cap of $1.3 billion. It has $3.7 billion under management and invests across a wide range of sectors.

NVP general partner Joshua Goldman did a good job in guiding the roundtable conversation. The key topic was  on crowdsourcing, or rather, what's the next step? Here are my notes:

- NVP talked about crowdsourcing but there's much more going on, and there's not a good word for it. All three startups use variants of crowdsourcing, but it seems to me that it's more like weeding out the crowd, and focusing on the smarter members.   

- The startups didn't like using the word crowdsourcing, (which seems very 2009!) It's about curating the crowd, creating a large, smart group that can then become a vital and dynamic resource to the business.

- ModCloth is more than 10 years old and specializes in vintage, and vintage inspired clothing. It previews clothing designs to hundreds of people and based on their feedback it decides if it is worthwhile to produce or stock the items. Things must be going well because it reported over $100 million in revenues in 2012.

- ModCloth is not the typical Silicon Valley startup. It's headquartered in San Francisco and has 450 staff. It's not as scalable business model as one based on software but by using its communities to create feedback and evaluate clothing designs it's managed to drain some of the risk from operating in the fickle fashion business.

- Quirky solicits ideas for products then chooses the best based on votes by its community. It covers the costs of  design and manufacturing, and product distribution is through Bed, Bath and Beyond, Target, and other large retailers. 

- The community votes on the ideas and people can take part in design decisions, sharing revenues with everyone that participates in the creation of the product. 

- Quirky solicits input on price, name, even the color of a product. It's most popular product is a circular six-outlet power cord extension.

- Quirky will also use its own money to file for patent protection. 

- If a product fails to sell, Quirky says it will hand over the design, patents, etc, to the originator of the idea at no cost.

- Here are some of its current products. They are priced from $4.99 to $99.99. There's lots of kitchen stuff and gadget related accessories such as gloves that let you use a touchscreen smartphone.

- Quirky has to sell a lot of plastic products to make money. Again, not a typical Silicon Valley startup.

- It could do well by opening a commercial design group as a side business, leveraging its design and manufacturing capabilities for larger companies.

- Quirky doesn't like the mention of Kickstarter, saying it is different. However, its expertise in manufacturing could be useful to some of the kickstarted ventures, which often get derailed because they mismanage the complexity of the manufacturing process.

- Motif is a financial services startup and its smart crowd of investors has created thousands of custom mutual funds, usually around a theme such as green companies, or the popularity of  home improvement, etc.

Each Motif holds 30 stocks with weighed numbers of full and fractional shares in companies that reflect the theme of the investment.

- Other investors can choose someone else's Motif, or modify a Motif for themselves. Motif's can be created first and their performance monitored before investing.

- Motif is very interesting startup and I can see a bright future especially for people's retirement portfolios.

- Motif charges $9.99 commission for a basket of 30 stocks. This is a great price. It's perfect for retirement funds. Recent revelations that management fees and hidden costs in mutual funds can drain as much as one-third from people's retirement funds compounded over a 30 year period, are a great argument for using Motif. People could mirror index or other funds, and save huge amounts in fees and other costs.

- Motif's founder kept saying it's as if you have Peter Lynch running your fund. It's a good line but judging by the performance of some of the Motifs, Biotech up 68% in one year, and a Cleantech Motif up 122%, the legendary fund manager would look like a rookie.  

- Motifs can be created from fractions of a single share. This allows people to invest small amounts of money in high priced shares, like $GOOG at $887.70.

- The company is constantly in touch with the SEC (hey are on speed dial) because there are many gray areas and there's a need for clearer regulations.

- Motif's founder is on an advisory board to the SEC -- an unusual arrangement to be advising on regulations that it will have to follow but I was told that it was OK, and there's no conflict of interest because Motif is very knowledgeable and the SEC is seeking to know more about this new area.

- Motif's business is highly scalable but it's not clear if future financial services regulations might turn against it's ambitions.