Research has shown that many innovations originate not in the manufacturer but the user domain. Internet-based Toolkits for Idea Competitions (TIC) are a novel way for manufacturers to access innovative ideas and solutions from users. Idea competitions build on the nature of competition as a means to encourage users to participate at an open innovation process, to inspire their creativity, and to increase the quality of the submissions. When the contest ends, submissions are evaluated by an expert panel. Users whose submissions score highest receive an award from the manufacturer, which is often granted in exchange for the right to exploit the solution in its domain. Following the idea of evolutionary prototyping, we developed a TIC in cooperation with a manufacturer of sports goods. The TIC was launched as a pilot in one of the company's markets. Submissions were evaluated using the consensual assessment technique. The evaluation of this study provides suggestions for further research, but also implications for managers willing to explore TIC in their organization.
Forecasting the demand for new products is becoming increasingly difficult in many markets. But collective customer commitment, a new method to decrease the flop rate of new products, offers a solution by integrating customers deeply in the innovation process. The collective customer commitment method exploits the commitment of users to screen, evaluate and score new designs as a powerful mechanism to reduce flops of new products. The process starts when an idea for a product is posted on a dedicated web site by either a (potential) customer or the developers of a manufacturer. Second, reactions and evaluations of other consumers towards the posted idea are encouraged in form of internet forums and opinion polls. Based on the results of this process, the manufacturer investigates the possibility of commercialization of the most popular designs. Is this evaluation positive, the company decides about a minimum amount of purchasers necessary to produce the item for a given sales price, covering its initial development and manufacturing costs (and the desired margin). The new product idea is then presented to the customer community, and interested customers are invited to express their commitment to this idea by voting for the design or even placing an order. Accordingly, only if the number of interested purchasers exceeds the minimum necessary lot size, investments in final product development are made, merchandising is settled and sales are commenced.
The objective of this paper is to explore new modes of cooperation among users, retailers and manufacturers resulting from co-design – a customer-centric business strategy. Co-design activities are performed at dedicated interfaces and allow for the joint development of products and solutions between individual users and manufacturers. Our research on co-design is based on a deep interaction with case companies, making the research itself a further collaborative effort. In this paper, we first explore collaboration challenges with a case company introducing customer co-design (Adidas AG, a sport goods manufacturer). In a second step of exploration, we use findings from a larger database of case studies on user co-design or mass customization to identify four basic modes of cooperation between customers, retailers and manufacturers. In a final step, the understanding gained from this differentiation is refined using the Adidas case. From the perspective of management practice, our research contributes to a better understanding of the collaboration challenges following a customer-centric business strategy. From the perspective of management research, the paper provides both a conceptual model of cooperation demands at the user interface and a methodological framework for collaborative management research between academics and companies.
The paper focues on the role of the user within a user co-design process. Users face new uncertainties and risks, coined “mass confusion”, when acting as co-designers. Building on a construction strategy of empirical management research in the form of six case studies, we propose the use of online communities for collaborative customer co-design in order to reduce the mass confusion phenomenon. In doing so, the paper challenges the assumption made by many researchers that offering customized products requires an individual (one-to-one) relationship between customer and supplier. The objective of the paper is to build and explore the idea of communities for customer co-design and transfer established knowledge on community support to this new area of application.
The primary argument in favor of mass customization is the delivery of superior customer value. Using willingness-to-pay (WTP) measurements, Franke & Piller (2004) have recently
shown that customers designing their own watches with design toolkits are willing to pay premiums of more than 100% (Delta-WTP). In the course of three experiments, we found that this type of value increment is not a singular occurrence but might rather be a general phenomenon, as we again found average Delta-WTPs of more than 100% for customers designing their own cell phone covers, T-shirts, and scarves. Building on this, we discuss the sources of
benefits that are likely to explain this tremendous value increment. It is argued that compared to conventional standard products, a mass-customized product might render the following utilitarian and hedonic benefits: (1) First, the output might be beneficial as self-designed products offer a much closer fit between individual needs and product cha racteristics. In addition to this mere functional benefit, extra value might also stem from (2) the perceived uniqueness of the self-designed product. Designing one's own products might, however, also more generally change the way in which people consume products. As the customer takes on the role of an active co-designer, there may also be two general do- it-yourself effects: (3)
First, the process of designing per se is likely to allow the customer to meet hedonic or experiential needs (process benefit). (4) As the customers themselves are the designers, they will also be likely to value the output more highly, as they will be proud of having created
something on their own (instead of traditionally buying something created by somebody else)– which might be referred to as the 'pride-of-authorship' effect.
Recently, toolkits for user innovation and design have been proposed as a promising means of opening up the innovation process to customers. Using these tools, customers can take on problem-solving tasks and design products to fit their individual needs. To date, arguments in favor of this new concept have been limited to the idea of "satisfying each user's needs" in a highly efficient and valuable way.
The aim of this empirical study is to extend our knowledge of how users deal with "the invitation to innovate" and how attractive individual user designs might be to other users. In studying the users of toolkits for the immensely popular computer game The Sims, we found that (1) users are not "one-time shoppers" – in fact, their innovative engagement is rather long-lasting, continuous, evolving, and intense – and that (2) leading-edge users do not merely content themselves with the official toolkits provided by the manufacturer. They employ user-created tools to push design possibilities even further. Moreover, (3) individual user designs are not only attractive to the creators themselves; instead, certain innovative solutions are in high demand among other users.
Based on our findings, we discuss how toolkits and their users might add to the process of innovation in general. We argue that toolkits could serve as a promising market research tool for guiding a firm's new product development efforts. Furthermore, toolkits may serve as a crèche for interested but inexperienced users who could evolve into leading-edge users over time. These innovative users might then be integrated into more radical product development efforts.
Firms and governments are increasingly interested in learning to exploit the value of lead user innovations for commercial advantage. Improvements to lead user theory are needed to inform and guide these efforts. In this paper we empirically test and confirm the basic tenants of lead user theory. We also discover some new refinements and related practical applications.
Using a sample of users and user-innovators drawn from the extreme sport of kite surfing, we analyze the relationship between the commercial attractiveness of innovations developed by users and the intensity of the lead user characteristics those users display. We provide a first empirical analysis of the independent effects of its two key component variables. In our empirical study of user modifications to kite surfing equipment, we find that both components independently contribute to identifying commercially attractive user innovations. Component 1 (the “high expected benefits” dimension) predicts innovation likelihood, and component 2 (the “ahead of the trend” dimension) predicts both the commercial attractiveness of a given set of user-developed innovations and innovation likelihood due to a newly-proposed innovation supply side effect. We conclude that the component variables in the lead user definition are indeed independent dimensions and so neither can be dropped without loss of information - an important matter for lead user theory. We also find that adding measures of users’ local resources can improve the ability of the lead user construct to identify commercially-attractive innovations under some conditions.
The findings we report have practical as well as theoretical import. Product modification and development has been found to be a relatively common user behavior in many fields. Thus, from 10% to nearly 40% of users report having modified or developed a product for in-house use (in the case of industrial products) or for personal use (in the case of consumer products) in fields sampled to date. As a practical matter, therefore, it is important to find ways to selectively identify the user innovations that manufacturers will find to be the basis for commercially attractive in the collectivity of user-developed innovations. We discuss the implications of these findings for theory and also for practical applications of the lead user construct, i.e. how variables used in lead user studies can profitably be adapted to fit specific study contexts and purposes.
This article investigates the joint-development of innovations within online consumer groups. While research on user-innovations within communities can often be found for open source software and emerging extreme sports like kite-surfing or rodeo kayaking, our study focuses on innovation activities within online consumer communities for basketball shoes, a physical consumer product in a mature market. Our research shows, that a small number of consumers are highly creative, possess sufficient domain specific skills and motivation to develop new innovative basketball shoes. While many community members state their experiences and problems with existing shoe models, those actively participating in joint-innovation activities are rather driven by excitement than by pure need for product improvement. The high quality and variety of innovations and general willingness of community members to share their ideas with producers, leads us to the discussion how creative communities can be virtually integrated into a company’s innovation process.
The “community-based” model has generated many of the innovations we use on a daily basis. The social structure created by this model has cultivated many entrepreneurial ventures and even seeded new industries and product categories. In this paper, I discuss three elements of this model and present four exemplars of the model that span fields and centuries. I conclude by reframing our view of the innovation process as driven by the activities of firms and research institutions and discussing implications for firms and policy.
This research explores the grassroots brand community centered on the Apple Newton, a product that was abandoned by the marketer. Supernatural, religious, and magical motifs are common in the narratives of the Newton community, including the miraculous performance and survival of the brand, as well as the return of the brand creator. These motifs invest the brand with powerful meanings and
perpetuate the brand and the community, its values, and its beliefs. These motifs also reflect and facilitate the many transformative and emancipatory aspects of consuming this brand. Our findings reveal important properties of brand communities and, at a deeper level, speak to the communal nature of religion and the enduring human need for religious affiliation.
The main objective of this article is to report the empirical findings from a study on user involvement in service innovation. In doing this, we seek to answer the question of how user involvement affects the originality of new service ideas. An experimental investigation was carried out which included 54 participants arranged into three groups of creative users, ordinary users and professional service developers. The empirical data revealed that the users produced more original ideas than the company’s professional service developers. It is thus suggested that business organizations attempt to innovate original products would benefit from involving their customers.
User involvement in the development of new products may offer a novel approach to improved methods of meeting customer needs. These users are considered to offer possibilities for generating original, valuable, and realizable ideas leading to successful innovation. However, the merit of users’ ideas compared to ideas generated by the company itself has not been investigated empirically. In the present study, advanced users, ordinary users, and professional product developers were given the task of creating ideas for future mobile phone services. The main purpose was to examine the benefit of involving users in suggesting new product ideas in an innovation project. An experimental three-group design was used in order to assess the output in terms of its original, valuable, and realizable merit. The results indicated that ordinary users create significantly more original and valuable ideas than professional developers and advanced users. Professional developers and advanced users created more easily realizable ideas, and ordinary users created the most valuable ideas. The results were discussed from the viewpoint of divergent thinking. It was suggested that divergent thinking was facilitated through the opportunity to combine different information elements that appeared separate at the outset, such as personal needs coupled with the functionality of mobile phone services.
This study analyzes the value created by so-called "toolkits for user innovation and design", a new method of integrating customers into new product development and design. Toolkits allow customers to create their own product, which in turn is produced by the manufacturer. In our study, we asked (1) if customers actually make use of the solution space offered by toolkits, and if so, (2) how much value the self-design actually creates.
In our study, we used a relatively simple, design-focused toolkit for a set of four experiments with a total of 717 participants, 267 of whom actually created their own watches. The heterogeneity of the resulting design solutions was calculated using the entropy concept, and willingness to pay was measured by the contingent valuation method and Vickrey auctions.
Entropy coefficients showed that self-designed watches vary quite widely. On the other hand, significant patterns are still visible despite this high level of entropy, meaning that customer preferences are highly heterogeneous and diverse in style but not completely random.
We also found that consumers are willing to pay a considerable price premium. Their willingness to pay (WTP) for a self-designed watch exceeds the WTP for standard watches by far, even for the best-selling standard watches of the same technical quality. On average, we found a 100% value increment for watches designed by users with the help of the toolkit.
Taken together, these findings suggest that the toolkit's ability to allow customers to customize products to suit their individual preferences creates value for them in a B2C setting even when only a simple toolkit is employed. Alternative explanations, implications and necessary future research are discussed.
In the development of past infrastructures, cooperative and amateur action has been a vehicle for diffusion, experimentation, innovation, popularization, and the provision of new features or services. 802.11 ("Wi-Fi") cooperatives are now proliferating. This user study considers three cases of cooperative action in the discovery, development, and provision of 802.11 (Wi-Fi) networks: (1) mapping and "Warchalking," (2) open-source portal software, and (3) the provision of service as an alternative to paying for a commercial subscription. It finds that these co-ops exist primarily to build elite expertise, but that it may be possible to direct these skillful groups toward societal goals.
In this study we analyze the commercialization process of user innovations in open communities. While former studies have stated that user innovators are not engaged in the commercialization process, we have traced 16 cases of user innovators who have commercialized their own innovations or have been involved in the commercialization process to some extent. By developing new products, user innovators in our sample have created a fast growing community and started a whole new industry. The transformation process from a user innovation community to a commercial and buyer community shows a number of serious changes. In this paper we have tracked those changes as: the motives for innovating, the community size and characteristic, the type of innovation, the type of assistance and the revealing of information, the form of communication, and the competition between innovating users.
In order to reduce the risks of failure usually associated with NPD, leading companies such as 3M, HILTI, or Johnson&Johnson are increasingly working with so-called Lead Users. Their identifica-tion and involvement is supported by the Lead User method – a multi stage approach aiming to generate innovative new product concepts and to enhance the effectiveness of cross-functional inno-vation teams. While the Lead User method is frequently cited in the literature, yet, there are only limited attempts to comprehensively discuss how this approach is embedded in theories and empirical findings of innovation and marketing research. Therefore the Lead User method is in the focus of the present paper both, with respect to its theoretical foundation and its implementation into the innovation management system. First, empirical research on user innovations is reviewed to clarify the theoretical foundation of the Lead User method. Second the attention is drawn to the Lead User practice by discussing the various process steps of this specific approach on the basis of two applications of the method. Based on this discussion, we outline open questions related with the practical implementation of the Lead User approach in order to start an agenda for future research.
Manufacturers usually benefit by dividing their innovation processes into distinct phases in order to ensure that the development activities are performed efficiently in an appropriate sequence [1]. Users usually do not apply such structured processes. They follow a more intuition-driven approach. In this paper we analyze the way users improve or develop novel products. The field of our research is a new and rapidly evolving consumer market, the sport of kite surfing.
We identified a sequence that underlies the approaches of user inventors. This sequence consists of two major stages, (1) idea generation and (2) idea realization, each again subdivided. We propose that a manufacturer in the relevant product field can significantly profit from more closely observing such user activities:
• Better understanding of tacit needs which cannot be derived by applying classical market research methods [2].
• Learn about the adequacy of solutions from the user. This may guide their development activities and prevent development of inadequate solutions.
• Collect user ideas as well as corresponding solution knowledge at very low tariffs and increase reputation as a customer-close organization
Studies of the sources of innovations have recognized that many innovations are developed by users. However, the fact that firms employ communities of users to strengthen their innovation process has not yet received much attention. In firm-established user communities users freely reveal innovations to a firm’s product platform, which in turn puts the firm in a favorable position (a) because these new product features become available to all users by sharing on a user-to-user basis, or (b) because it allows the firm to pick up the innovations and integrate them in future products and then benefit by selling them to all users. We study the key personal attributes of the individuals responsible for innovations and the creation of value in this organizational context, namely the innovative users, to explain why firm-established user communities work. Analyzing data derived from a web-based questionnaire generating 442 answers we find that innovative users are likely to be (i) hobbyists, an attribute that can be assumed to affect innovators’ willingness to share innovations (positively), and (ii) responsive to “firm-recognition” as a motivating factor for undertaking innovation, which explains their decision to join the firm’s domain. In agreement with earlier studies we also find that innovative users are likely to be “lead users”, an attribute that we assume to affect the quality of user innovation. Whether or not a firm-established user community can be turned into an asset for the firm is to a great extent conditioned by the issues studied in this paper.
A growing body of literature investigates the role of users in innovation processes of new products. This essay examines whether it is feasible to transfer and adapt these findings from the context of product development to innovations in the public realm. Based on the shortcomings of conventional market research, as acknowledged in the literature on user-innovators, the paper develops a conceptual framework of the mechanisms that operate when citizen-innovators are at work. This model identifies different ontological and epistemological assumptions behind expertdriven and participatory innovation processes, thus informing both, the debate on user- and citizen-innovators. Finally, this framework is assessed in light of empirical information from a case study of participatory infrastructure development.
The process of developing a new technology through open discussion has been called collective invention. This paper documents two episodes of collective invention and proposes a general model based on search theory.
The first episode deals with the development of mass production steel in the U.S. (1867-1885), and the second with early personal computers (1975-1985). In both cases technical people openly discussed and sometimes shared technology they were developing. Both technologies advanced to the point that they supported substantial economic growth. Open source software development is partway through a similar process now.
The episodes have common features. The process begins with an invention or a change in legal restrictions. Hobbyists and startup firms experiment with practical methods of production and share their results through a social network. The members of the network form a new industry or change an existing one. The network then disappears if the new firms keep their research and development secret. A model of the search for innovations can describe this process if it is expanded to include independent hobbyists and consultants as well as profit-seeking firms.
Online Consumer groups represent a large pool of product know-how. Hence, they seem to be a promising source of innovation. At present, except for open source software, little is known about how to utilize this know-how for new product development. In this article we explore if and how members of virtual communities can be integrated into new product development. We explain how to identify and access online communities and how to interact with its members in order to get valuable input for new product development. This approach we term “Community Based Innovation”. The Audi case illustrates the applicability of the method and underscores the innovative capability of consumers encountered in virtual communities.
Users of products and services often make product-related innovations that become taken-forgranted
product features. Early research in this area found that while product users – be they firms or
individuals - innovated, it was existing manufacturers who commercialized the innovation. Users
benefited from using the innovation they created, while existing manufacturers reaped the financial
rewards. More recent empirical work and anecdotal evidence however finds that users innovate and
sometimes also start firms to produce the innovation for sale to others; thereby allowing the innovator to
profit from her innovation both financially and through use. What accounts for this discrepancy in
empirical findings – and more importantly what does this imply for existing models of entrepreneurship
and industry emergence? In order to begin addressing these questions, this paper proposes a theoretical
model that identifies the factors that influence user-innovators to start their own firms, that is, to become
entrepreneurs or license their work rather than share their work with existing manufacturers. We illustrate
our model with examples from the field of consumer sporting goods.
Virtual customer communities enable firms to establish distributed innovation models that involve varied customer roles in new product development. In this article I use a multitheoretic lens to examine the design of such virtual customer environments, focusing on four underlying theoretical themes (interaction pattern, knowledge creation, customer motivation, and virtual customer community-new product development team integration) and deriving their implications for virtual customer environment design. I offer propositions that relate specific virtual customer environment design elements to successful customer value creation, and thereby to new product development success.
In this chapter we examine the potential value to firms of voluntary activities of electronic
customer communities. Participants in these communities help each other in the use of products ranging
from software programs (e.g., Microsoft Word) to toy building blocks (e.g., LEGO®). They reinforce the
value of the product in their lives through shared passions and experiences. We examine the factors that
motivate people to participate voluntarily in such electronic customer communities and the dynamics that
ensure continued participation of a critical mass of members. The chapter concludes by discussing
appropriate response strategies of companies to the activities of volunteer customer communities that
depart from the conventional controlling role of companies in direct-to-consumer communications but
which nonetheless can be valuable for firms in the long run.
This study describes a process in which a firm relies on an external consumer community for innovation. While it has been recognized that users may sometimes innovate, little is known about what commercial firms can do to motivate and capture such innovations and their related benefits. We contribute to strategy literature by suggesting that learning and innovation efforts from which a firm may benefit need not necessarily be located within the organization, but may well reside in the consumer environment. We also contribute to the existing theory on “user-driven innovation” by showing what firms purposively can do to generate consumer innovation efforts. An explorative case study shows that consumer innovation can be structured, motivated, and partly organized by a commercial firm that organizes the infrastructure for consumers’ interactive learning in a public online domain.
Keywords: Product Development, Consumer-to-Consumer Interaction, Learning, Consumer Innovation, Community, Toolkits.
This study describes a process in which a firm relies on an external consumer community for innovation. While it has been recognized that users may sometimes innovate, little is known about what commercial firms can do to motivate and capture such innovations and their related benefits. We contribute to strategy literature by suggesting that learning and innovation efforts from which a firm may benefit need not necessarily be located within the organization, but may well reside in the consumer environment. We also contribute to the existing theory on “user-driven innovation” by showing what firms purposively can do to generate consumer innovation efforts. An explorative case study shows that consumer innovation can be structured, motivated, and partly organized by a commercial firm that organizes the infrastructure for consumers’ interactive learning in a public online domain.
Keywords: Product Development, Consumer-to-Consumer Interaction, Learning, Consumer Innovation, Community, Toolkits.
“User toolkits for innovation” was recently proposed as a means to eliminate (costly) iterations of need-related information between users and producers in the product development process. We examine the implications of different levels of consumer involvement in product development to learn what happens when firms pass design tasks on to consumers. We explore this issue by studying the relation between user toolkits and firms’ need to support their consumers. An analysis of 78 computer games products suggests that a share of the costs firms save on information acquisition by the toolkits approach may eventually re-emerge as costs in consumer support. Finally, a potential solution to the costly support needs is outlined; namely the establishment of consumer-consumer interaction. A study of Westwood Online shows that consumers are able to substitute firms’ costly support efforts - consumer interaction facilities can enhance the outcomes of the toolkit approach.
Keywords: Innovation; User Toolkits; Consumer Support; Online Communities
“User toolkits for innovation” was recently proposed as a means to eliminate (costly) iterations of need-related information between users and producers in the product development process. We examine the implications of different levels of consumer involvement in product development to learn what happens when firms pass design tasks on to consumers. We explore this issue by studying the relation between user toolkits and firms’ need to support their consumers. An analysis of 78 computer games products suggests that a share of the costs firms save on information acquisition by the toolkits approach may eventually re-emerge as costs in consumer support. Finally, a potential solution to the costly support needs is outlined; namely the establishment of consumer-consumer interaction. A study of Westwood Online shows that consumers are able to substitute firms’ costly support efforts - consumer interaction facilities can enhance the outcomes of the toolkit approach.
Keywords: Innovation; User Toolkits; Consumer Support; Online Communities
The paper provides a framework to qualify knowledge sharing patterns amongst firms. We propose that there are two particularly relevant dimensions : whether the sharing is : i)"opportunistic" or "systematic" ; ii) "informal" or supported by "dedicated tools". We then rely the pattern of sharing to both firm incentives and the economic benefits to share. In particular we suggest that different patterns of sharing drive to different benefits, both at the firm and industry levels. Our framework is illustrated with a case study of knowledge sharing on safety issues in the european chlorine industry. A further point that we investigate is how the chlorine industry has converged towards the pattern of sharing it is experiencing. This raises more generic questions, such as how industries might move from an equilibrium to another one in terms of knowlege sharing practices.
Research into free and open source software development projects has so far largely focused on how the major tasks of
software development are organized and motivated. But a complete project requires the execution of “mundane but necessary”
tasks as well. In this paper, we explore how the mundane but necessary task of field support is organized in the case of Apache
web server software, and why some project participants are motivated to provide this service gratis to others.We find that the
Apache field support system functions effectively. We also find that, when we partition the help system into its component
tasks, 98% of the effort expended by information providers in fact returns direct learning benefits to those providers. This
finding considerably reduces the puzzle of why information providers are willing to perform this task “for free.” Implications
are discussed.
This article introduces the idea of brand community. A brand community is a specialized, non-geographically bound community, based on a structured set of social relations among admirers of a brand. Grounded in both classic and contemporary sociology and consumer behavior, this article uses ethnographic and computer mediated environment data to explore the characteristics, processes, and particularities of three brand communities (those centered on Ford Bronco, Macintosh, and Saab). These brand communities exhibit three traditional markers of community: shared consciousness, rituals and traditions, and a sense of moral responsibility. The commercial and mass-mediated ethos in which these communities are situated affects their character and structure and gives rise to their particularities. Implications for branding, sociological theories of community, and consumer behavior are offered.
In this paper we argue that what Robert Allen has termed as collective invention settings (that is settings in which competing firms share technological knowledge) were a crucial source of innovation during the early phases of industrialization. Until now this has been very little considered in the literature, which has focussed on the patent system as the main institutional arrangement driving the rate of innovation. The paper presents one of these collective invention settings, the Cornish mining district, in detail. We study the specific economic and technical circumstances that led to the emergence of this collective invention setting and we analyse its consequences on the rate of technological innovation.
Innovation development, production, distribution and consumption networks can be built up horizontally – with actors consisting only of innovation users (more precisely, “user/self-manufacturers”). “Free” and “open source” software projects are examples of such networks, and examples can be found in the case of physical products as well.
User innovation networks can function entirely independently of manufacturers when (1) at least some users have sufficient incentive to innovate, (2) at least some users have an incentive to voluntarily reveal their innovations, and (3) diffusion of innovations by users is low cost and can compete with commercial production and distribution. When only the first two conditions hold, a pattern of user innovation and trial and improvement will occur within user networks, followed by commercial manufacture and distribution of innovations that prove to be of general interest. In this paper we explore the empirical evidence related to each of these matters and conclude that conditions favorable to user innovation networks are often present in the economy.
In the traditional new product development process, manufacturers ?rst explore user needs and then develop responsive products. Developing an accurate understanding of a user need is not simple or fast or cheap, however. As a result, the traditional approach is coming under increasing strain as user needs change more rapidly, and as ?rms increasingly seek to serve “markets of one.”
Toolkits for user innovation is an emerging alternative approach in which manufacturers actually abandon the attempt to understand user needs in detail in favor of transferring needrelated aspects of product and service development to users. Experience in ?elds where the toolkit approach has been pioneered show custom products being developed much more quickly and at a lower cost. In this paper we explore toolkits for user innovation and explain why and how they work.
This study contributes to our understanding of the innovation process by bringing attention to and investigating the process by which innovators outside of firms obtain innovationrelated resources and assistance. This study is the first to explicitly examine how userinnovators gather the information and assistance they need to develop their ideas and how they share and diffuse the resulting innovations. Specifically, this exploratory study analyzes the context within which individuals who belong to voluntary special-interest communities develop sports-related consumer product innovations. We find that these individuals often prototype novel sports-related products and that they receive assistance in developing their innovations from fellow community members. We find that innovation-related information and assistance, as well as the innovations themselves, are freely shared within these communities. The nature of these voluntary communities, and the 'institutional' structure supporting innovation and free sharing of innovations is likely to be of interest to innovation researchers and managers both within and beyond this product arena.
It is known that end users of products and services sometimes innovate, and that innovations developed by users sometimes become the basis for important new commercial products and services. It has also been argued and to some extent shown that such innovations will be found concentrated in a 'lead user' segment of the user community. However, neither the characteristics of innovating users nor the scope of the community that they 'lead' has been explored in depth.
In this paper, we explore the characteristics of innovation, innovators and innovation sharing by library users of OPAC information search systems in Australia. This market has capable users, but it is nonetheless clearly a 'follower' with respect to worldwide technological advance. We find that 26% of users in this local market nonetheless do modify their OPACs in both major and minor ways, and that OPAC manufacturers judge many of these user modifications to be of commercial interest. We find that we can distinguish modifying from non-modifying users on the basis of a number of factors, including their “leading edge status” and their in-house technical capabilities. We find that many innovating users freely share their innovations with others, and find that we can distinguish users that share information about their modifications from users that do not. We conclude by considering some implications of our findings for idea-generation practices in marketing.
In a study of innovations developed by mountain bikers, we find that user-innovators almost always utilize “local” information – information already in their possession or generated by themselves - to assess the need for and to develop solutions for their innovations. We argue that this finding fits the economic incentives operating on users. Local need information is the most relevant to user-innovators, since the bulk of their innovation-related rewards typically come from in-house use. Local solution information that is already “in stock” is preferred because it can be applied to innovation-related problem-solving at a relatively low cost.
Our findings suggest that innovation development is distributed among users in an economical way: user-innovations tend to be developed by “low-cost providers.” It also suggests that the likely function and solution type employed in most user innovations can be predicted on the basis of preexisting user activity patterns and stocks of solution-related information. This in turn opens the way to new methods for efficiently screening user populations for the presence of innovations of any specified type.
Traditional idea generation techniques based on customer input usually collect information on new product needs from a random or typical set of customers. The “lead user process” takes a different approach. It collects information about both needs and solutions from users at the leading edges of the target market, as well as from users in other markets that face similar problems in a more extreme form. This paper reports on a natural experiment conducted within the 3M Company on the effect of the lead user (LU) idea-generation process relative to more traditional methods. 3M is known for its innovation capabilities— and we ?nd that the LU process appears to improve upon those capabilities. Annual sales of LU product ideas generated by the average LU project at 3M are conservatively projected to be $146 million after ?ve years—more than eight times higher than forecast sales for the average contemporaneously conducted “traditional” project. Each funded LU project is projected to create a new major product line for a 3M division. As a direct result, divisions funding LU project ideas are projecting their highest rate of major product line generation in the past 50 years.
“Lead users” are defined as being at the leading edge of markets, and as having a high incentive to innovate. Empirical research has shown the value of lead user need and solution data to new product development processes. However, the nature of the lead user construct itself has not been studied to date. In this paper we fill this significant gap by proposing and evaluating a continuous analog to the lead user construct, which we call leading edge status (LES). We establish the validity and reliability of LES and examine the characteristics of users having high levels of this variable. We also offer a first exploration of how LES is related to traditional measures in diffusion theory such as innate innovativeness and time of adoption. We find a strong relationship and explain how users with high LES can offer a contribution to both predicting and accelerating early product adoption.
Empirical studies of innovation have found that end users frequently develop important product and process innovations. Defying conventional wisdom on the negative effects of uncompensated spillovers, innovative us-ers also often openly reveal their innovations to competing users and to manufacturers. Rival users are thus in a position to reproduce the innovation in-house and benefit from using it, and manufacturers are in a position to re-fine the innovation and sell it to all users, including competitors of the user revealing its innovation. In this paper we explore the incentives that users might have to freely reveal their proprietary innovations. We then develop a game-theoretic model to explore the effect of these incentives on users’ de-cisions to reveal or hide their proprietary information. We find that, under realistic parameter constellations, free revealing pays. We conclude by discussing some implications of our findings.
This practitioner-oriented article is focused on the business case for 'toolkits for user innovation.' It explains how firms can afford to provide customized solutions to even their smaller customers by providing them with such toolkits and then shifting some of the custom design work to the customers themselves. Examples illustrating the approach and its potential are provided from the semiconductor, chemicals and flavors industries.
User needs for a given product type can be quite heterogeneous. Segmenting the market and providing solutions for average user needs in each segment is a partial answer that will typically leave many dissatisfied – some seriously so. We hypothesize that providing users with “toolkits for user innovation” to enable them to more easily design customized products for themselves will increase user satisfaction under these conditions. We test this hypothesis via an empirical study of Apache security software – “open source” software that is designed to be modifiable by skilled users. We find that heterogeneity of need is high, and that many Apache users are dissatisfied with standard security functionality on offer. We also find that users creating their own software modifications are significantly more satisfied than are non-innovating users. We conclude by suggesting that the “toolkits for user innovation” approach to enhancing user satisfaction might be generally applicable to markets characterized by heterogeneous user needs.
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