User Defined Innovation


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Executive summary (peppered with a few examples of my own) of Eric Von Hippel's book Democratic Innovation

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  • User Defined Innovation

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