user innovation: learning from creative consumers
TRANSCRIPT
USER INNOVATION: LEARNING FROM CREATIVE CONSUMERS
Ian P. McCarthy
INTRODUCTION
@Toffeemen68
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
http://beedie.sfu.ca/graduate/
http://beedie.sfu.ca/graduate/
OVERVIEW
• Open innovation
• User innovation
– Creative consumers
• What is the best way to learn from creative consumers?
Adapted from Chesborough 2004
CloseD innovation is when knowledge flows stay within the organization.
Adapted from Chesborough 2004
Open innovation is when knowledge flows into and out of the organization.
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 neededOrganizational structure
Functional silos Integrated processes
IBM AND WINTEL• In 1981 IBM designs a product and an innovation supply chain
• Did IBM make a mistake?
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
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.
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?
CREATIVE CONSUMER: DAVE HURBAN (BODY MODIFIER)
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
CREATIVE CONSUMER: JOHNNY LEE
• Extending the functionality of the Wii Remote
• Worked on the Microsoft Kinect
• Is a Human-Computer Interaction researcher at Google
JOSE AVILA
JOSE AVILA
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”
DISCUSSION
• The ‘why?’– Why did the these creative
consumers innovate?
• The ‘what?’– characterize the innovations
they produced?
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?
FIRMS HAVE DIFFERENT STANCES
23
Firms attitude to consumer innovation
Firms action to consumer innovation
Passive
-ve
Active
+ve
RESISTActively restrain the innovation
ENCOURAGEHappy to allow but don’t help the innovation
DISCOURAGEDefacto ignore or tolerate the innovation
ENABLEActively facilitate the innovation
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.
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”
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.
WHAT IS THE BEST WAY TO LEARN FROM CREATIVE CONSUMERS?
• It depends!
•What does it depend on?
THANK YOU
http://beedie.sfu.ca/graduate/