Users have long been identified as important sources of innovation. This includes innovations from intermediate users (i.e., when companies are the users) and consumer users (i.e., when individuals who are users). In this talk I will introduce one particular type of innovating consumer user – the creative consumer. These are individuals who adapt, modify and hack existing propriety offerings, as opposed to creating completely new products. Then, together we will explore the characteristics of different examples of creative consumers and examine how companies can identify, acquire and leverage the innovation-related knowledge produced by such users.

1. USER INNOVATION: LEARNING
FROM CREATIVE CONSUMERS
Ian P. McCarthy

2. INTRODUCTION
@Toffeemen68
Ian_mccarthy@sfu.ca
www.slideshare.net/IanMcCarthy
2
Based on research in:
“When customers get clever: Managerial approaches to
dealing with creative consumers” in Business Horizons
“CGIP: Managing consumer-generated intellectual property”
in California Management Review

3. http://beedie.sfu.ca/graduate/

4. http://beedie.sfu.ca/graduate/

5. OVERVIEW
• Open innovation
• User innovation
– Creative consumers
• What is the best way to
learn from creative
consumers?

6. Adapted from Chesborough 2004
CloseD innovation is when knowledge flows stay
within the organization.

7. Adapted from Chesborough 2004
Open innovation is when knowledge flows into
and out of the organization.

8. CLOSED INNOVATION VERSUS OPEN INNOVATION
Closed Innovation Open Innovation
Ethos We must produce and use the
innovation
We get innovations from
anywhere and sell
innovations to anyone
Role of customers Passive recipients Active users and
innovators
IP culture Own and use Buy and sell as needed
Organizational
structure
Functional silos Integrated processes

9. IBM AND WINTEL
• In 1981 IBM designs a product and an innovation supply chain
• Did IBM make a mistake?

10. OPEN INNOVATION: LINUX
• The freedom to use the
software for any purpose.
• The freedom to change the
software to suit your needs.
• The freedom to share the
software with your friends and
neighbors.
• The freedom to share the
changes you make

11. OPEN INNOVATION: LINUX
• In 1999 Red Hat went public and achieved on the biggest first day
gains in history.
• In 1999 IBM spent 1$ billion developing and promoting Linux
• In 2012 a new version was launched every three months
• Linux runs 75% of the world’s stock exchanges and 95% of the
worlds supercomputers
• Runs the servers of Amazon, Facebook, Ebay and Twitter
• Linux is in our phones, TVs, and many other consumer products.

12. USER INNOVATION AND CREATIVE CONSUMERS
• User innovation is a type of open innovation.
• It is innovation by users (e.g. firms and individual consumers).
• Creative consumers are user innovators who adapt, modify
adapt, modify, or transform a proprietary offering as opposed
to creating completely new products (Berthon et al 2007)
• Two questions:
– Why did the following creative consumers innovate?
– How would you characterize the innovations they
produce?

13. CREATIVE CONSUMERS: THE LEAD USERS

14. CREATIVE CONSUMER: DAVE HURBAN (BODY MODIFIER)

15. GEORGE HOTZ (GEOHOT): THE JAIL BREAKER
• An alumnus of the Johns
Hopkins Center for
Talented Youth program.
• At 19 yrs. old hacks
iPhones (Feb 2008)
• In Nov 2009 hacks
Playstation 3.
• Apple does nothing
• Sony launches law suit
• Facebook employs him

16. CREATIVE CONSUMER: JOHNNY LEE
• Extending the
functionality of the Wii
Remote
• Worked on the Microsoft
Kinect
• Is a Human-Computer
Interaction researcher at
Google

17. THE LASSI WASHING MACHINE

18. JOSE AVILA

19. JOSE AVILA

20. NICK HAYLEY
• In 2007 the 18 yr. old U.K.
student created an ad for
the iTouch and posted it
into on YouTube.
• “We represent Apple and
we’ve seen what you have
produced and we’d like a
chat with you”

21. DISCUSSION
• The ‘why?’
– Why did the these creative
consumers innovate?
• The ‘what?’
– characterize the innovations
they produced?

22. WHAT DO THESE STORIES TELL US?
• Motivations (intrinsic vs. extrinsic)
• Products and services, both low tech and high tech are being
innovated
• The faithfulness of the innovation varies
• It is not just the product or service that is changed
• There are varying levels of value in the innovations
• Individuals versus groups
• The reactions of firms, governments and societies can vary
significantly
• These factors impact how we view, treat and absorb
knowledge from user innovators?

23. FIRMS HAVE DIFFERENT STANCES
23
Firms attitude to
consumer innovation
Firms action
to consumer
innovation
Passive
-ve
Active
+ve
RESIST
Actively restrain
the innovation
ENCOURAGE
Happy to allow
but don’t help the
innovation
DISCOURAGE
Defacto ignore or
tolerate the
innovation
ENABLE
Actively facilitate
the innovation

24. CREATIVE CONSUMERS AND INFORMATION
• To innovate you need two types of information:
– problem/opportunity information
– solution information
• Creative consumers possess both types of information
• The innovations are often very disruptive.

25. SUMMARY
• Creative consumers exist because:
– “I need it, but it doesn’t exist”
– “I’m curious”
– “This bugs me”
– “This could be so much better”
– “I don’t want to use it this way”
– “I could make money out of this”
– “I want to be famous”

26. SUMMARY
• Open innovation is a relative concept - few systems are
completely closed or open.
• However, it is increasingly more open as:
– products are more modular, more reconfigurable, and
more programmable
– We like to customize and personalize things
– It is easier to share and show-off
• You work with many smart people, but not all of the smart
people in the world.
• You organizations needs to open up internally before it can be
open externally.

27. WHAT IS THE BEST WAY TO LEARN FROM
CREATIVE CONSUMERS?
• It depends!
• What does it depend on?

28. THANK YOU
http://beedie.sfu.ca/graduate/