User Defined Innovation
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Transcript of User Defined Innovation
(adapted from: Democratizing Innovation by Eric Von Hippel)
ObjectiveHow to understand unique customer needs to create
breakthru products and services
Agenda:
Customers customize – fact?
Customers customize – why?
Customers customize – how to channel into innovation ?
Many Users want custom products Enterprise Software users customize (often) heavily
Surgical and Medical users (MRI, surgical equipment)
Sports
Designer Cars
Holiday offered by a tour operator
User Needs are heterogeneous …. unlike what mass market manufacturers believe
Lead Users customize and develop products themselves …. Often without the manufacturers
Why do Lead Users customize? Lead users have needs that foreshadow the general
market
They customize because:they have unique needs ANDthey expect high profits
They customize on their own because they find it: Difficult to explain to manufacturersEasy and quick to do it on their own Interesting to figure it out on their own Manufacturers develop products for many customers
…. leading to missed innovation opportunities
Innovation = Need + Solution
Information is difficult to transferIt may be tacit (“how can we explain this?”) A lot of it is required (“you did not tell us that”)
Information is sticky …. Which is why the twain find it difficult to meet
User has NEED
Information
Manufacturer has
SOLUTION Information
Toolkits for User Innovation
Advantage to Manufacturers:Can take one user innovation to other users Can offers innovation cheaper and more functional
Help both manufacturers and users …. they iterate within their information domain
Manufacturer develops basic
product
User develops specific
application
Examples
Automobile Car Color Selector for ICI (developed by a company I founded)
…and of course Web Services architecture
Good Toolkits should… Allow complete cycle of trial-and-error learning:
Not just pick from a menu
Offer a solution spaceDepending on the constraints that manufacturer wants to
impose
User Friendly Tools: Both parties need not learn others languages
Offer commonly used modules for re-useSo that user creativity is focused
Quality of Toolkits is key to their effectiveness
Will Users share information?Reality :
Lead Users often freely reveal their innovationsLead Users congregate and collaborate in communities
Why? Enhanced functionality and better quality through
collaboration Enhanced prestige within their community A secret is not really a secret at least not for long!
Lead Users stand to benefit from developing the innovation ….. They benefit more by sharing its details
Making Enterprise software development fun… … users developed product ideas in Idea factory