The process of user-centered how it can benefit both users and manufacturers and how its emergence will bring changes in business models and in public policy.
Innovation is rapidly becoming democratized. Users, aided by improvements in computer and communications technology, increasingly can develop their own new products and services. These innovating users—both individuals and firms—often freely share their innovations with others, creating user-innovation communities and a rich intellectual commons. In Democratizing Innovation, Eric von Hippel looks closely at this emerging system of user-centered innovation. He explains why and when users find it profitable to develop new products and services for themselves, and why it often pays users to reveal their innovations freely for the use of all.The trend toward democratized innovation can be seen in software and information products—most notably in the free and open-source software movement—but also in physical products. Von Hippel's many examples of user innovation in action range from surgical equipment to surfboards to software security features. He shows that product and service development is concentrated among "lead users," who are ahead on marketplace trends and whose innovations are often commercially attractive.
Von Hippel argues that manufacturers should redesign their innovation processes and that they should systematically seek out innovations developed by users. He points to businesses—the custom semiconductor industry is one example—that have learned to assist user-innovators by providing them with toolkits for developing new products. User innovation has a positive impact on social welfare, and von Hippel proposes that government policies, including R&D subsidies and tax credits, should be realigned to eliminate biases against it. The goal of a democratized user-centered innovation system, says von Hippel, is well worth striving for. An electronic version of this book is available under a Creative Commons license.
The idea is that the process of innovation has moved, at least in part. Traditional thought says that manufacturers would send marketers to research user need and then send that data to the R&D department where they would attempt to create a solution. This is increasingly false. Users now do their own innovation.
Technology has advanced to the point where users can perform more of their own R&D. Manufacturers are now specializing in scaling production rather than identifying user need.
This process has increased the pace of innovation since users and manufacturers need to interact less. Instead of cycling from user to manufacturer and back until the innovation is complete, users now speed through their own cycle and then pass a finished idea off to manufacturers who speed through their cycle. Less interface between the two means less time stopping and starting. This system flows faster.
A central idea is that the tools of innovation have moved towards the centers of information. The users now have the tools to leverage their specialized knowledge. This means that less information needs to be passed from system to system. This transfer of information was the slowest part of the innovation cycle. Users would have to tell manufacturers what they wanted. Manufacturers would inevitably get it wrong (through no fault of their own, they just don't have the knowledge that the users have so they make simple mistakes that would have been caught by any user-innovator).
Some random tidbits: 1. User-innovation is different from that of manufacturers. They tend to be more disruptive while manufacturer-innovation tends to be sustaining. 2. Manufacturers and users have different incentives. User-innovation is more in line with user needs. 3. User innovation communities where everyone freely reveals knowledge are increasingly facilitated by communication tools. This technological change is distinct from advances in design and prototyping tech.
I forgot. The beginning of the book is all about why users freely share their innovations. Namely they get reputation and monetizing their innovations is too hard. Patents are expensive and don't work well.
Quotes:
"Users are unique in that they alone benefit directly from innovations. All others (here lumped under the term "manufacturers") must sell innovation related products or services to users, indirectly or directly, in order to profit from innovations."
"Three specific contributors to transaction costs; (1) differences between users' and manufacturers' views regarding what constitutes a desirable solution, (2) differences in innovation quality signaling requirements between user and manufacturer innovators, and (3) differences in legal requirements placed on user and manufacturer innovators."
"Companies that produce products and solution types that have close functional equivalence from the user's point of view can look very different from the point of view of a solution supplier."
"There is typically an information asymmetry between user and manufacturer with respect to what will be the best solution. Manufacturers tend to know more than users about this and to have a strong inventive to provide biased information to users in order to convince them that the solution type in which they specialize is the best one to use."
"Histories of the user-developed improvements to stressed-skin panel construction showed that the user-innovator construction firms did not engage in planned R&D projects. Instead, each innovation was an immediate response to a problem encountered in the course of a construction project. Once a problem was encountered, the innovating builder typically developed and fabricated a solution at great speed, using skills, materials, and equipment on hand at the construction site. Builders reported that the average time from discovery of the problem to installation of the completed solution on the site was only half a day."
"Need-intensive tasks within product-development projects will tend to be done by users, while solution-intensive ones will tend to be done by manufacturers."
"Innovators are using their membership in two distinct communities to combine previously disparate elements."
"Consider "business stealing". This term refers to the fact that commercial manufacturers benefit by diverting business from their competitors. Since they do not take this negative externality into account, their private gain from introducing new products exceeds society's total gain, tilting the balance toward over-provisioning of variety." (race to the bottom, innovation in value-capture vs. value-creation)
"A kite manufacturer began downloading users' designs from Zeroprestige.com and producing them for commercial sale. This firm had no internal kitesurfing product development effort and offered no royalties to user-innovators - who sought none. It also sold its products at prices much lower than those charged by companies that both developed and manufactured kites." (great example of the separation of manufacturing and R&D)
"(1) Manufacturers may produce user-developed innovations for general commercial sale and/or offer a custom manufacturing service to specific users. (2) Manufacturers may sell kits of product-design tools and/or "product platforms' to ease users' innovation-related tasks. (3) Manufacturers may sell products or services that are complementary to user-developed innovations."
"Firms can make a profitable business from identifying and mass producing user-developed innovations or developing and building new products based on ideas drawn from such innovations. They can gain advantages over competitors by learning to do this better than other manufacturers. They may, for example, learn to identify commercially promising user innovations more effectively than other firms."
"Product-development processes traditionally used by manufacturers start with market researchers who study customers in their target markets to learn about unsatisfied needs. Next, the need information they uncover is transferred to in-house product developers who are charged with developing a responsive product. In other words, the approach is to find a user need and to fill it by means of in-house product development."
"Snowballing relies on the fact that people with rare interests or attributes tend to know others like themselves. Pyramiding modifies this idea by assuming that people with a strong interest in a topic or field can direct an inquiring researcher to people more expert than themselves."
"How do we square these findings with the arguments, put forth by Christensen (1997), by Slater and Narver (1998), and by others, that firms are likely to miss radical or disruptive innovations if they pay close attention to requests from their customers?...The [Christensen:] value network framework would predict that the innovations toward which the customers in von Hippel's study led their suppliers would have been sustaining innovations. We would expect disruptive innovations to have come from other sources...My findings, and related findings by others as well, deal with innovations by lead users, not customers, and lead users are a much broader category then customers of a specific firm...Listening to the voice of the customer is not the same things as seeking out the learning from lead users."
"Present practice dictates that a high-quality toolkit for user innovation will have five important attributes. (1) It will enable users to carry out complete cycles of trial-and-error learning. (2) It will offer users a solution space that encompasses the designs they want to create. (3) It will be user friendly in the sense of being operable with little specialized training. (4) It will contain libraries of commonly used modules that users can incorporate into custom designs. (5) It will ensure that custom products and services designed by users will be producible on a manufacturer's' production equipment without modification by the manufacturer."
"Probably only in the case of physical products where the interaction between product and production methods are not clear will geography continue to matter deeply in the age of the internet."
This entire review has been hidden because of spoilers.
My area of expertise is open source software — the most visible example of the phenomenon von Hippel examines in this book. One of the challenges of OSS governance and planning is that many people want to treat it like a unicorn, a special snowflake that defines its own trends and has no corollaries in other industries.
This book is a fantastic antidote to that thinking: it lays out a theory of distributed innovation that both explains the success of open source software, and places it alongside other examples of the phenomenon in wildly different industries. Specifically, he argues that efficiencies of scale that make mass-production profitable come with a downside. The investment necessary to scale up also distances producers from the actual users of their products: discovering new use cases, valuable enhancements, etc becomes an expensive research-intensive affair. User modifications, "hacks," and enhancements performed in the field are less polished, but spring from users' perfect, immediate understanding of their own needs. The relationship between the large-scale manufacturing system and in-the-trenches hacking is symbiotic, and nurturing it is beneficial for both parties.
The book dives into nearly a dozen different examples: the emergence of windsurfing as a sport, user hacks to a mass-manufactured pipe-hanging device, the rise of the Apache web server, and more. It's a bit dry, with an academic voice that reflects its history as an MIT research project, but it's a great read for anyone chewing on tough industry problems — or searching for an alternative to open source exceptionalism.
Reading this book along with the EdX MOOC course: 'MITx: uINOV8x_1, User Innovation: A Pathway to Entrepreneurship' was very interesting. I would recommend reading the book as it is recommended on the course, rather than bumbling through at your own pace as it does cement the ideas of the course in place.
I found the formulas difficult to get into, but most of the information was worthwhile and I'm sure I'll revisit it. I particularly liked the sections on freely revealing innovations as I've never subscribed to the 'go hard, go fast, break things' and 'I'm going to make a startup to be a billionaire' kind of thinking.
This is a classic for anyone into innovation mamagement. Though written with a bit much academic language, it is filled with examples of user-led innovations. Users, according to von Hippel, are not customers, but rather the leading edge and super skilled people in a particular area.
I read this book in 2013 I believe and I think it predicted the hype of customisation tools and what made some brands incredibly successful in the years that followed.
This book examines different ways innovation can occur, expanding upon the foundation provided by “Sources of Innovation” and the concept of Lead User Innovation. The first few chapters define characteristics of lead user innovation and venues where it is most likely to occur. This is also known as customer co-creation, where a manufacturer works with particular customers to develop new products. In this case, certain fields (or analogous fields) have extreme users who are not satisfied with the compromises made in designs to meet the average users in mass produced products. These users modify existing products or create their own, and freely share their ideas and help diffuse the technology with their community of interest. They do this in part to have others help debug or add on to the idea to make it better. Spreading a problem out across a diverse group of individuals means that every problem will be shallow problem to someone in the community who has the expertise to tackle it. An innovator sometimes freely reveals their knowledge to develop a de facto standard, or to shape an innovation in a way that is favorable to them or their complimentary products. Manufacturers have their specialized knowledge of production and can use economies of scale once a feasible, broadly acceptable solution forms, but are motivated to homogenize and make design compromises to facilitate economy of scale or fit the solution to their expertise. Lead user innovation results in wholly new product lines & strategic directions with more growth potential than traditional development methods, which more often extend & improve existing products. Hippel tries to reconcile lead user innovation with disruptive innovation in later chapters & has interesting speculations, but I'm not wholly convinced by his argument this is a great source for disruptive ideas This book highlights the need for a technologically literate population with the capacity to freely exchange ideas to innovate. Centralized design committees lack the local knowledge and suffer from the transaction costs of picking it up, in addition to the quandaries of the principle-agent problem. He cited the diffusion of information technology in fueling user innovation by facilitating sophisticated sharing and connection of fragmented communities of interest. Increased access to sophisticated tools, such as 3D printers will make this process even more prominent as users can develop ever more sophisticated physical goods in a way that they have done with software and other products over the past few decades.
On the book Democratizing Innovation, Eric von Hippel explains all utilization of users for developing innovative products by carefully explains all the aspect related to this concept. Throughout the book we can find the same examples coming over to explain different aspects, but don’t get me wrong there are multiple example that contribute to his theory.
Each chapter of the book is dedicated to one aspect; the transition from one chapter to another is smooth and provides a consistent way for understanding the theory. In first chapters of the book, von Hippel concentrates on the development of lead user and the impact they have over the manufacturers. He justifies the need of users for the development of innovative product by explaining the problem of sticky information and the cost associated on it. In the last chapters of the book, there is more a concentration on defending the need of this type of innovation.
We can notice the dislike toward certain policies in the some chapters, and how some scholars have misunderstood the concept of his theory. He justifies his theory without criticizing other and in the final chapter he links his theory with other in other fields (e.g., nations competitive advantages, social construction of technology).
The book is easy to read and to understand. It provides a look on the way that innovation can be democratize so that users can be part of the innovation theory. This book can serve as an introductory book on the subject or as a literature review to see different aspect of the theory.
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This entire review has been hidden because of spoilers.
There is no doubt that the continued lower costs and democratization of the tools and distribution of things previously the realm of pros is reshaping our world.
But this book reads like a college textbook. More academia than Malcolm Gladwell or Chris Anderson. Which I guess is good if you're a true researcher.
There's definitely good content and ideas to be had here, but for me it could be delivered just as effectively as a Forrester Report.
The book is available free in digital form online so give it a spin and judge for yourself.
This is a very long academic research paper more than it is a book. The book is dense and repetitive in the way many research papers are: they must present airtight arguments.
I picked up this book because it was called out and cited in Desk Justice by Sasha Constanza-Chock, also from MIT press and they are an MIT prof like this books author.
Somewhat ironic that ultimately I found that every applied, useful-to-someone-who-isnt-a-senior-VP strategy in this book was better outlined and covered in practical terms in Design Justice.
Academic prose always makes my head hurt (and my eyes droop). Why can't we talk about scholarly matters without writing like a robot?
But that said, the ideas in here are interesting and directly applicable to anyone in innovative work. They're not so much entirely original ideas, as ideas embedded in an explanatory framework that enables you to see how and why to apply them.
Reluctantly recommended to anyone interested in how to harness the power of users in the service of innovation.
I like the basic premisse of the book: innovation is not only done by manufacturers, but also by customer organizations, or even individual customers. I like the way how Von Hippel proves this using nice case studies, and sketches an innovation landscape which involves the customer (e.g. handing out 'innovation kits'). What I don't really like is the amount of text it takes to make this point...
Extremely boring. like a college book. A whole lot of theory about how individual users and user organizations should be encouraged to do innovation. I was looking for a book about corporate innovation culture, which this book is definitely not.
This book provides a great summary why and how people want to share know-how. The internet makes community building much easier. This affects how we build products and how companies should tackle innovation.