Innovation in Prosumer Communities

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A presentation on prosumers for my Schulich Social Media Marketing class

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  • Innovation in prosumer communities: I will present an overview of where innovation is going, within the context of online prosumer communities. I will also discuss a few examples of companies (e.g. Lego, Threadless) that have used and leveraged prosumer innovation in their own businesses. Then I'll end off with reviewing some of the challenges and "positive" outcomes that companies face when giving up control over their innovation processes. How the prosumption revolution affects organizations
  • -How prosumption has changed innovation -The role of prosumers-How can companies benefit and learn from prosumption?
  • -Consumers don’t like standardization, mass marketing doesn’t work-Consumers want to engage in the innovative process of producing ....-The online web is the space for creating prosumption communities ...pg. 128
  • -Contributions by online prosumers can provide :-knowledge, information and assistance on heightening a user experience. Be it a product or a service-Need for integration and collaboration with these communities in order to leverage “shared inventions”-Prosumer innovation is meant to open networks and open systems of mass collaboration When consumers interact with online communities – they feed off one another through triggers such as discussion boards etc. Hence, the result of strong innovation generally results when prosumers innovate with other like-minded people who can bring additional insight that can support making an idea into a product or experience.
  • -Lego’s willingness to involve their customers/users in their innovative processes is still one of few businesses that combined mass customization and peer production. -Mark Hansen, director of Lego Interactive Experiences said : “With lego Factory we can expand beyond our one hundred in-house product designers to marvel at the creativity of more than 300,000 thousand designers worldwide.” Lego harnessed beyond a customer-centric approach with first – Lego Mindstorms + Lego Factory = vibrant prosumer community and source of innovation *”
  • -Another example of the role of a prosumer is in the Threadless business model. -Threadless is a website that sells T-shirts designed by the masses. So essentially the website has an “open-call” system where anyone interested in designing a shirt can submit a design. Thereafter, designs are posted online and the members of the community vote for their favourite designs. The t-shirts that have the most votes, get produced and are up for purchase through the website.
  • In order for virtual integration between CIP and CM....community’s innovative potential + willingness to participate Prosumers predict future marketplace opportunities that companies may not foreseeProsumers promote: Active idea-creation, collaborative thinking #1. Prosumers are often able to bring insight about future product potential that will appeal to mainstream markets. This is an advantage because prosumers have the experience of both bring a consumer and simultaneously thinking of ways of improve products.
  • Prosumption communities present a huge opportunity and source of innovation”In the new prosumer-centric paradigm, customers want a genuine role in designing the products of the future”. – pg. 149LEAD USERS: highly enthusiastic, look beyond the horizon, foresee future modifications and product extensions*In others words “lead users serve as a beacon for where the mainstream market is headed.”
  • Innovation in Prosumer Communities

    1. 1. INNOVATION<br />IN<br />PROSUMER<br />COMMUNITIES<br />By: Nikita Raja<br />
    2. 2. Agenda Break-Down:<br />Innovation in online communities<br />What are Prosumers?<br />Company Examples: <br /> Lego <br /> Threadless<br />Giving up Control?<br />Organizational benefits<br />Conclusion<br />
    3. 3. Shift<br /><ul><li>Outside Innovation</li></ul>Open-source technology<br />Collaborative thinking<br />ProsumerCommunities<br /><ul><li>TraditionalInnovation</li></ul>R&D Labs<br />Innovation incubators<br />Organization is in control over processes<br />Source: Seybold, Patricia. Outside Innovation <br />
    4. 4. “Prosumers”<br />Prosumption: “...where customers participate in the creation of products in an active and ongoing way.” (Tapscott & Williams, Wikinomics, 2007)<br />Hold product know-how<br />Creativity meets Consumption<br />Co-creation of product ideas and improvements<br />Peer collaboration <br />
    5. 5. 1998: Lego Mindstorms<br /> High Tech product: creation of customized robots out of programmable bricks<br />“Right to Hack”: Allowing Lego customers and users to engage in program modification and software improvement activities <br />Key Learnings:<br /> Mass customization + Peer Production = <br /> full-fledged prosumer community and enhanced innovation <br />
    6. 6. 1) Design a t-shirt <br /> 2) Submit design online <br /> 3) Community votes for <br /> best t-shirt designs<br />Threadless Prosumption Business Model: <br /><ul><li>Prosumer crowds manage the creative design & innovation of t-shirts
    7. 7. Threadless company focuses on production and distribution of t-shirts</li></li></ul><li>Giving up Control?<br />CHALLENGES:<br />Loss of control over innovation processes (e.g. Hacking)<br />Jeopardizing product potential <br />“Over time, value migrates from your product to what customers do with it...”<br />Tapscott & Williams, Wikinomics, 2007<br />
    8. 8. Organizations + Prosumers<br />Integration of community members into a company’s innovation processes <br />
    9. 9. CONCLUSION :<br />“Prosumer-centric paradigm”<br />Give credit where its due and provide potential compensation <br />Prosumer communities are a huge source of innovation<br />

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