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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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      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.
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      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.
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    « Innovations in Haitian Relief & Rescue | Main | Apple’s iPad: Just Good Enough to Transform the Publishing/Media Industries »

    January 26, 2010

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    Comments

    Mikey

    Klaus brings up an interesting point...If Google can't succeed in China, should they attempt at least to make a public move that would win more appreciation in Google-dominated regions.

    I don't understand why Google is even thinking about sailing away. Hard to believe that it's a case of censoring when this has been going on since Google's beginning in China. And I disagree with politicians who are getting involved in this and encouraging more companies to follow suit. Why now after all this time? Did something just ring in their head or become the flavor of the month?

    Peter Horne

    Hi Patty,

    I had a few dissenting thoughts on your google note... While it does look like they have some work to do on their cultural and customer focus, I can't see these as being major strategic points.

    First, regarding popularity, when I was in China I talked a lot to my interpreter about their use of the internet. I distinctly recall her telling me that the reason why Baidu was popular against Yahoo and Google was that Baidu allowed unfettered music and movie downloads. Ie. it allowed pirating (and still does). The western firms did not and so weren't as popular as they didn't meet market expectations.

    My view is that 33% market share for a foreign company in China is extraordinary. China does not allow any more than 25% foreign ownership of a Chinese company, and normally if it's a bank or other critical component of the economy, you always have a "partner" company that ultimately has the government as your major shareholder. Once again, for Google to independently have 33% market share is extraordinary!!!!

    In any industry, you can pretty much fix any problem if you have a profitable market share of 33%. You can criticise Googles for tardiness or oversight, however these customer issues would ultimately be addressed as they improved their "paltry" 33% market share through operational and continuous improvement. They have a culture that is obsessed with meeting customer needs and they invest over the odds on detail and innovation to win. I really can't agree that this is a major point.

    The sense of nationalistic pride driving choice I agree is a salient point. The Chinese are very nationalistic. But once again this underlines the extraordinary success of the 33% market share. Google overcame nationalism for 33% of the participants in a market where the current generations were all raised up on government propaganda. That is extraordinary.

    Also, 33% of Chinese internet users remember the name Google. How can it be seen as a problem? 33% know it already. Google was an abstract maths term that only nerds like me had half a chance of knowing before it turned in to a brand. They're 33% of the way there in China. They're well passed the tipping point. Do you think that Microsoft is going to change Bing if a Chinese focus group responds negatively? No, they'll advertise and promote the brand.

    As a non American, (and I know you know this) Americans do not understand the messaging culture in other countries. As you know outside the US the mobile phone networks have always been standardised and so SMS took off as the major IM paradigm, and MMS took off as well with the new generation of video and photo phones. My kids use Facebook messaging when they are on Facebook (and when they should be doing homework!), but their preferred messaging is SMS. An email address to them is what their school gives them, and they have a yahoo or gmail account to create their Facebook accounts. But they NEVER use email to communicate with each other. I don't even know my kids email addresses as they never read them, and the grandparents had to sign in to Facebook to get in touch with the grandkids because they can't get them to read their emails. Two of my four kids have iPhones and I asked them if they wanted me to setup their email and they said they didn't need it because they had SMS and Facebook.... and so it goes on. That's a HUGE cultural difference that is true across all of Asia & Europe where GSM was always the standard... So my point is that it's a bit rough just giving Google a hard time not understanding or responding to this difference in fine detail. You can't even get Google messaging or checkout services in any countries other than the US and UK, but they're not criticised for not meeting all the needs in other markets. They would get to it... they would have a plan and it would have had a priority - or not.

    My view is that the West, because of the profit motive, wants to ascribe Western values on to China so that we can get on with business. 5 nanoseconds in China trying to do business ( (or even getting a Visa) immediately shows you that business is done the Chinese way in China, or no way. Not only do they have different values to us, their values cut across our values. Google is one of the most profitable companies in the world and they're proven capitalists. For a successful capitalist/free market company with such massive market share to pick a fight with the largest emerging market in the world - I believe we have to give them the benefit of the doubt and ascribe their behaviour to reaching the limits of their ability to conform, rather than their ability to succeed.

    They are already a success - and they are putting it at risk. I give them the benefit of my doubt, and my support.

    Cheers...Pete

    Klaus-Peter Speidel

    This is an extremely insightful article.

    Do you think Google has just been good communicating their move out of China, making it look like it was for moral rather than commercial reasons?

    But then, even thoughBaidu led in market share with 63.9%, Google's 31.3% is not soo bad that it would justify getting out of the market altogether (Source: http://www.digitaleastasia.com/2010/01/05/baidu-google-yahoo-and-bing-2009-was-a-battleground-in-chinese-search/). Is it?

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