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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.
      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.
      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.
      You no longer win by having the smartest engineers and scientists; you win by having the smartest customers!
      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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    « App Stores = Markets; Cloud Platforms = Customer Ecosystems | Main | Why Facebook’s IPO Bombed »

    May 17, 2012


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    Yes, Matthew-- I think there's a lot MORE cynicism afoot now after Google went public. People are catching on that WE are the ones being monetized and weighing the trade-offs between privacy and convenience.

    The other Aha! I had looking at the numbers is that the Value that investors attribute to Facebook is actually the value of the TOTAL ECOSYSTEM, including the interactive digital shops that companies like GM spend $30 million/year with. NONE of that revenue actually goes to Facebook. It DOES go to the Facebook ecosystem.


    Patty - Your analysis underscores that we haven't taken to heart the lessons of recent years around business valuations.

    Do you think there will be any backlash from Facebook users/customers that we're the ones being monetized (as you tersely sum up as "That’s what Facebook is selling: Us!")? It didn't seem to happen with Google after its 2004 IPO, so perhaps we're all OK with (or resigned to) the tacit let us use this platform/tool/network free of change, and you can reap whatever financial rewards come from our use of it. But I wonder if more seeds of frustration are being sown as the amount of money involved becomes more apparent.

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