MIT professor Eric Von Hippel's Democratizing Innovation studies the role of user innovation in product development, and concludes that businesses should follow their lead users to find profitable new products.
The book cites research showing that a surprisingly large number of users —from 10 percent to nearly 40 percent—develop or modify products. Open source software is the example that first comes to mind, but user innovation is found in a wide range of business and consumer products ranging from pipe installation to medical equipment to camping gear.
People who customize their products belong to a class of "lead users" who are "ahead of the majority of users in their populations with respect to an important market trend, and they expect to gain relatively high benefits from a solution to the needs they have encountered there." In one study, Von Hippel's team followed the product development process at 3M. The researchers concluded that following lead users can lead to greater success in the development of new products than following traditional market research methods that focuses on identifying the needs of broader market segments.
Von Hippel recommends a business strategy to "follow the lead users". This can mean taking their lead on product direction. Many "lead user" customizations are one-offs. But the ones that are repeated point the way to the most innovative and successful new products. Companies can supporting "lead users" with toolkits that help modify products. Some industries, including chip design, have been retooled to support the creation of customer designs almost entirely.
This advice is nearly the opposite of the canonical strategy in Geoffrey Moore's 1991 classic, Crossing the Chasm. Moore argues that for high-tech companies, focusing on lead users can lead to business failure. Moore observes that high-tech products follow a market adoption curve, starting with "early adopters", who are eager for advantage through innovation, and continuing through the more conservative "early majority" and mainstream buyers.
In Moore's analysis, the "early adopters" have more in common with each other than with everyone else. Because early adopters are the first customers of a high-tech product, high-tech companies can get caught in a trap attempting to please their early adopters, and never break out of the trap into mainstream success. Mainstream buyers are put off by the customizeable knobs and levers that attract the "early adopter" tinkering class. Instead, mainstream buyers prefer ease of use, packaging, and service.
Geoffrey Moore advises high-tech companies to stop trying to please their early adopters. Instead, they should identify market segments that need the product, and product a feature-rich, well-serviced package for these market segments. Once there are enough of these segments to prove the viability of the product, the product may join the main stream. At that point, the product experiences a"hypergrowth" phase, when the best thing thing the company can do is to ignore customer request altogether, and simply ship product.
Why do these two strong theories contradict each other?
* is user innovation increasing with the spread of design toolkits and open source software, so that more users are becoming "early adopters"?
* does Von Hippel's work simply focus on an earlier part of the technology adoption life cycle than Moore?
Comments are most welcome.
Posted by alevin at August 16, 2005 09:21 AM | TrackBackI think your 2nd point is key - lead users generate ideas for products, but to Cross The Chasm you need to package a WholeProduct that normal people can deal with. And given limited resources (esp market intelligence) in a startup you need to pick 1 to bet on and dedicate resources to.
I may post more once I've read more of Hippel...
http://webseitz.fluxent.com/wiki/CrossingTheChasm
Hi, Adina:
As Bill Seitz says, I think your second point is the key. Lead user search occurs at an earlier point in the innovation process than does 'crossing the chasm' Lead users are where companies can find new and promising product ideas and prototypes. Companies then have to adapt these ideas in such a way that they can cross the chasm.
For example, early Power Bar-like nutritional supplements were developed by leading-edge athletes (Olympic Atheletes and their nutritionists, Navy Seals, etc.) long before Power Bar made them into a commercial product.
If commercialized in the form that the lead users designed them to solve their own needs, this lead users innovation was clearly destined to be a niche product. For example, the functional food did the functional job the athletes needed, but it tasted terrible. Taste didn't matter much to lead users - so they didn't solve the problem. It was therefore the job of companies like powerbar to modify them to suit a mass market and get the product from lead users to early adopters and then 'across the chasm'.
Hope this helps!
Posted by: Eric von Hippel on August 24, 2005 09:26 AM