Now look at this diffusion of innovation! Economists and journalists saw it first. Trendwatching spotted a trend of “Customer-made” products. James Surowiecki identified a common pattern with his seminal “Wisdom of the Crowds” book. Susumu Ogawa, a professor of marketing at Kobe University in Tokyo, and Frank Piller, a professor at TUM Business School in Munich, extrapolated it in two case studies on “new product development” in MIT’s Sloan Management Review. Michael Schrage from the MIT Media Labs spun the concept further in a recent Strategy + Business article (“My customer, my co-innovator”). Then Wired re-packaged the concept for its early adopter readers and gave it its catchy name. And with today’s article in BusinessWeek, the concept of “Crowdsourcing” has now reached the business mainstream.
Crowdsourcing turns product development into an open-source platform. Without calling it "crowdsourcing," Trendwatching still provides the best definition of consumers as co-creators (“Generation C”) in the "amateur economy:" "The phenomenon of corporations creating goods, services and experiences in close cooperation with experienced and creative consumers, tapping into their intellectual capital, and in exchange giving them a direct say in (and rewarding them for) what actually gets produced, manufactured, developed, designed, serviced, or processed."
What started with new collaborative formats for knowledge sharing (think Wiki) and writing (the “networked book”) has been picked up by global brands in advertising campaigns and is now emerging in the field of product development. Consider it the Wikipedization of products. While companies such as Nokia (Concept Lounge), IKEA, or Nespresso have already been soliciting consumers’ creativity through design contests, mainly for the benefit of a one-time marketing hook, crowdsourcing systematizes consumer innovation as an integral part of a company’s product development process. Another form of ethnography, crowdsourcing takes advantage of online social networks, makes the networked consumer part of the product development process, and offers companies a way to learn about consumer preferences and requirements that is more reliable and less costly than research such as focus groups or observations.
Michael Schrager writes: "The most valuable 'platforms' — the tools and technologies used internally to discover, design, and test new products and services — can be creatively and cost-effectively sold or lent to customers, clients, and prospects. Customers get a chance to 'try before they buy.' They can adopt and test new ideas and technologies before investing in them. And the purveyors of new technologies rapidly gain insights into the potential value of their wares — insights that might otherwise take years to gather."
Crowdsourcing might spawn a trend similar to that seen in the music industry where the big record labels were forced to evolve from production units to mere talent agents. Jeremy Rifkin was prophetic when he anticipated in his 2001 bestseller “The Age of Access" a new age in which "concepts, ideas and images -- not things -- are the real items of value." The crucial competitive advantage will increasingly come from having access to resources and talent. Or – with Chris Anderson – those with the "longest tail" and widest access to a vast array of customer segments through networks will prevail.
So who’s doing it?
Product Development
Threadless
Threadless is a Chicago-based T-shirt maker whose design process consists entirely of an online contest. Each week the company receives hundreds of submissions from amateur and professional artists. Threadless posts these to its Web site, where anyone who signs up may give each shirt a score. The four-to-six highest-rated designs each week are put into production, but only after enough customers have pre-ordered the design to ensure it will have a market.
John Fluevog Shoes
The shoemaker has started Open Source Footwear. Fluevog fanatics submit their own designs for shoes.
Muji
Muji is a Japanese specialty furniture retailer. Through its community site, Muji.net, the company solicits novel and radical product ideas from a member base of roughly half a million people. Muji then asks members to pre-evaluate the designs. The short list of highest-ranked ideas is given to professional designers, who develop the production-grade specifications. Muji then tests the market by soliciting customer pre-orders rather than conducting a focus group or survey, or using other traditional market research methodology.
P&G
In the past two years, P&G launched more than 100 new products for which some aspect of development came from outside the company. Connect + Develop and other innovation projects now produce more than 35% of the company’s innovations. P&G also recently rebranded its Tremor Moms program to Vocalpoint.
BMW Customer InnovationLab
BMW asked consumers to help them develop ideas as how to leverage advances in telematics, online services, and driver assistance systems.
Lego
In its Online Factory, the toy company encourages its customers to design everything from robot operating systems to Lego sets.
InnoCentive
Pharmaceutical maker Eli Lilly funded InnoCentive to connect with brainpower outside the company – people who could help develop drugs and speed them to market. From the get-go, InnoCentive opened the doors to other firms eager to access the network’s ad hoc experts. Companies like Boeing, DuPont, and Procter & Gamble now post their most ornery scientific problems on InnoCentive’s Web site; anyone on InnoCentive’s network can take a shot at cracking them.
YourEncore allows companies to find and hire retired scientists for one-off assignments.
NineSigma is an online marketplace for innovations, matching seeker companies with solvers in a marketplace similar to InnoCentive.
Design
Electrolux Design Lab
With this annual design competition, Electrolux invites students from all around the world to design products for “tomorrow’s consumer.”
Designboom
An online community where industrial designers can showcase their creations.
Zazzle
This site takes user designs and plasters them on mugs, shirts, and posters. If other Zazzlers like your work and order products with your design, the consumer creators get a cut.
Financial Services
Marketocracy
This community of 60,000 online stock traders tracks the decisions of its top 100 portfolios to set the investment strategy for its mutual fund. Its index has outperformed the S&P 500 in 11 of the past 17 quarters.
Advertising
JetBlue Travel Stories
JetBlue offers consumers an opportunity to record their travel stories in a JetBlue Story Booth, with which the company tours through several US cities: “Walk in, tell your JetBlue tale, and have fun. “
Firefox Flicks
Firefox users are in invited to refer the browser through self-generated 30-second ads or video podcasts.
Stock Photo
iStockphoto
iStockphoto grew out of a free image-sharing exchange used by a group of graphic designers and created a marketplace for the work of amateur photographers – homemakers, students, engineers, dancers. There are now about 22,000 contributors to the site, which charges between $1 and $5 per basic image.
Other micro-stock sotes: ShutterStock, Dreamstime.
Hi there,
You might want to refer to our book communties dominate brands futuretext 2005. Where we idenify Generation "C" as the community generation
All the best Alan Moore
Posted by: Alan Moore | July 17, 2006 at 11:16 AM