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  • What is Outside Innovation?
    It’s when customers lead the design of your business processes, products, services, and business models. It’s when customers roll up their sleeves to co-design their products and your business. It’s when customers attract other customers to build a vital customer-centric ecosystem around your products and services. The good news is that customer-led innovation is one of the most predictably successful innovation processes. The bad news is that many managers and executives don’t yet believe in it. Today, that’s their loss. Ultimately, it may be their downfall.

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      Observations

      • LEAD USERS
        Eric von Hippel coined the term "lead users" to describe a group of both customers and non-customers who are passionate about getting certain things accomplished. They may not know or care about the products or services you offer. But they do care about their project or need. Lead users have already explored innovative ways to get things done. They're usually willing to share their approaches with others.
      • LEAD CUSTOMERS
        I use the term "lead customers" to describe the small percentage of your current customers who are truly innovative. These may not be your most vocal customers, your most profitable customers, or your largest customers. But they are the customers who care deeply about the way in which your products or services could help them achieve something they care about.
      • LEAD CUSTOMERS AND LEAD USERS
        We’ve spent the last 25 years identifying, interviewing, selecting, and grouping customers together to participate in our Customer Scenario® Mapping sessions. Over the years, we’ve learned how to identify the people who will contribute the most to a customer co-design session. These are the same kinds of people you should be recruiting when you set out to harness customer-led innovation.
      • HOW DO YOU WIN IN INNOVATION?
        You no longer win by having the smartest engineers and scientists; you win by having the smartest customers!
      • CUSTOMER CO-DESIGN
        In more than 25 years of business strategy consulting, we’ve found that customer co-design is a woefully under-used capability.
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      « Grass Roots Innovation in Northern England | Main | THE STRATEGIC IMPORTANCE OF COMMUNITY IN INNOVATION »

      January 11, 2007

      Apple's iPhone: Raising the Bar

      I got an excited phone call from Pat Kerpan, one of "Patty's Pioneers", about two minutes into Steve Jobs' presentation on Tuesday. I had been on a plane at the time, getting email updates before take-off by various members of my team, as well as the WSJ's instant analysis. Pat's take: "Say Good-bye to RIM Blackberry, Palm Treo et al." As a Blackberry addict, my skepticism kicked in. My first two thoughts were (naturally) about my own use. "Does it have push email? Does Cingular reach my home on a penisula in Maine?" (The answers are maybe and no). But taking my selfish needs aside, I want to personally thank Steve for once again disrupting the market by introducing a product category that is so USABLE and sexy.

      Steve's brilliance in user interface and functionality design comes through once again (with the help of his usability experts). He is uncompromising in the areas where it really matters--not only the look and feel, but what the right mix of functionality and ease of use has to be in order for the product/category to meet customers' REAL needs. The iPhone will move us all firmly away from text messaging/email to high bandwidth video, multimedia and rich communication. Of course we'll continue to type or text messages. But I predict that we'll be sending more and more video clips around to communicate quick takes--for both personal and professional use. I'm glad I have six months to wait for my iPhone. I need the time to learn how to take and edit video so it's as easy as editing a document!


      CISCO: HOLDING OUT FOR INTEROPERABILITY

      The real story to watch may be the litigation between Cisco and Apple over the iPhone name. I was fascinated to learn that the dispute isn't over money; it's over interoperablity. Apparently Cisco is demanding that the iPhone functionality be interoperable with other networks and devices. That's going to be really interesting to watch!

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      Comments

      Patty,
      I can't resist commenting a bit. In your write up were the following comments:
      ***
      "He is uncompromising in the areas where it really matters--not only the look and feel, but what the right mix of functionality and ease of use has to be in order for the product/category to meet customers' REAL needs. The iPhone will move us all firmly away from text messaging/email to high-bandwidth video, multimedia, and rich communication. Of course we'll continue to type or text messages."
      ***

      I disagree. If Steve and crew were really addressing my needs they would not lock the iPhone down so that they and only they have to approve any and all applications on the system. It’s my phone so why can’t I install other applications that I find useful? Are they the only ones that know what is useful to the community?

      Further, they would have insisted in incorporating the higher bandwidth. I have never met anyone that didn’t wish the network was faster. With the slow speed network the IPhone supports, you will not be shipping video around very much.
      *****
      You say:
      "CISCO: HOLDING OUT FOR INTEROPERABILITY. The real story to watch may be the litigation between Cisco and Apple over the iPhone name. I was fascinated to learn that the dispute isn't over money; it's over interoperability. Apparently, Cisco is demanding that the iPhone functionality be interoperable with other networks and devices. That's going to be really interesting to watch!"
      *****

      I think the other issue to watch that has more impact long term is how Apple and at&t/Cingular resolve the 3G network issue.
      Good for CISCO! Apple is too used to doing things their own way. Apple should support a data interchange standard and interface to any system I might want to connect to. Not just Google and Yahoo for certain of their functionalities but also MSFT Exchange, etc. After all, it is the corporations that have the funds to buy lots of these devices at these prices and not your average consumer.

      I’m wondering if this is the time that they fall on this sword and miss an opportunity. There are other touch screen devices out there so it will be interesting to see how the various competitors work around their patents, etc. Neat design but too closed at too high a price point.

      Summary: Well designed UI, etc. but way short on usability. Hopefully the iPhone2 will get it right.

      The phone will support widgets provided by Apple. They've explicitly ruled out third parties developing for the phone, at least for now. http://www.macintouch.com/specialreports/sf2007/

      Paul, I agree with you that the screen keyboard is a concern. I haven't tried it, but judging from the reactions from the pundits who have, and based on Jobs' own attention to such details, I'm assuming that it actually works! That may be wrong..

      Re: Closed to user innovation? I don't think so. The iPhone apparently will support and encourage user-generated Widgets...

      Thanks for the link to the lead user conversation.. I'll check it out!

      Patty

      Wi-fi does make it a potentially open system.

      The question of iPod being a closed system is true to a certain point but breaks down when you consider it supports MP3 and wav files. It is true that if you go to the iTunes store and apple compression you are hooked.

      The choice of an exclusive carrier is troublesome as is the steep entry point. I count on Apple rewarding the early adopters who shell out the cash and then introducing lower cost models. I also count on Sony and Nokia to liberate their design teams.

      I don't think the trademark dispute is a huge deal, since it has an easy fix -- just change the product's name. Since the Apple iPhone isn't due until June, there's plenty of wiggle room.

      I do think that the walled garden nature of the phone, combined with a poor choice of wireless carrier (Cingular), is going to hamstring adoption in its first two years. This is a very pretty product, but I don't see it as game-changing. (To me, game-changing would be a phone that could be connected to my Mac and used anywhere as a wireless modem.)

      Patty, couldn't disagree with you more! I'm not an expert here, but I would suggest that the big bet here is that we don't need a keyboard (as the iPod did not need the standard button lay outs of the past). If that bet proves untrue then all other bets are off! It the screen is not good for texting, that will hurt uptake with that crucial lead user market.

      The iPod is a closed, tied system, operating on proprietary software and the iPhone (a closed, tied system) do not allow any ecosystem to be developed (at the moment). So, its not a "social product". Not necessarily a problem if it does one good thing well (i.e. like Skype).

      My one big one worry is that it does not address any one "major issue" that people really needed resolved.

      Interesting "lead user" conversation going on at http://www.yourtechstuff.com/techwire/2007/01/iphone_10_bigge.html

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