August 30, 2008
Customers Increasingly Drive Firms’ Innovations
By MARY PAULSELL
How many times have you complained about a product or service and then dismissed your unhappiness with a shrug and a comment: "If they had asked me about this, I could have told them ... but, well, they didn't ask me."Well, they're starting to.
Consumer-driven innovation - or simply asking what customers want - has gained traction in recent years. Seems rather obvious, doesn't it? But for many decades, consumer goods and services were designed around what company executives and business owners thought we wanted.
Now, not only are they asking us more about what we want, in many cases they are asking us to design products ourselves, often taking the old-fashioned focus group into the new technological age using online communities and social networking.
It was consumers who told Unilever to reduce the size of detergent bottles, fill them with a more concentrated formula and ultimately reduce the bulk in recycling or landfills. This came about as a result of blogs in which consumers complained about the weight and inconvenience of the larger bottles.
Two young Generation Y graphic designers launched Threadless. com, a Chicago-based online T-shirt company that produces garments designed by an online community of more than 700,000 users. This social networking/design team votes on customer-submitted T-shirt designs, then produces the winning entries for sale on its Web site. After you buy a shirt, you can submit a photo of yourself wearing it, and that photo may be posted on the site as well. Threadless has created a system for having a continuous personal relationship with its consumer, something that is supremely important to this generation of customers.
All of this points up the trend toward "crowdsourcing" - the outsourcing of product development and problem solving to those outside the company. This is largely the result of businesses learning how to leverage and, some would say, exploit online communities. And it's a perfect strategy for targeting young consumers who have grown up with e-mail, instant messaging and a myriad of online networking communities.
On NameThis.com, you can invest $99 and have the members of this online community name your product or service. Members vote by investing in proposed names, and the submitting winner can be paid for their contribution. Recent winners? For a stationery store: Carde Diem. For a Web 2.0 green portal: Greenkeeper.
At local-motors.com, you can participate in the design of innovative, fuel-efficient cars that will be manufactured and serviced in a new series of micro-factories. If you win the weekly design contest, you could be $1,500 richer. If the car is actually built, you could pocket up to $10,000.
Another very fun site is Instructables.com, where participants have formed a community to share ideas about customizing and improving upon common products. The CEO of Instructables is an MIT graduate who studied under a fellow named Eric von Hippel, who is the guru in the field known as democratized innovation - the bottom- up method of product development and improvement.
Today, consumers want customization. Gone are the days of one- size-fits-and-suits-all. We expect current innovations to meet our specific needs and preferences. But many market watchers are concerned that this movement is catering only to vanity products and services, with little attention paid to innovation in the areas of alternative energy, food sources and distribution and disease prevention.
For instance, while shopping in a local drugstore the other day, I found a Hallmark card that featured the photo of a Columbia dog on the front and a design by the dog's owner. It was in a new collection of cards designed by consumers from all across the country. It's really a cool idea but might not be the future of the economy.
It's the Wikipedia, YouTube, open-source software mindset. It's a 180 from the old idea that he who holds the information holds the power.
But it might also be an outlet for the frustrated artist, engineer or inventor in all of us.
Mary Paulsell is the director of the University Center for Innovation and Entrepreneurship at the University of Missouri. Reach her at [email protected] or visit www.missouribusiness.net.
Originally published by MARY PAULSELL.
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