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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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    January 19, 2006


    Miles Sims

    Karmaloop does offering some creative 'street team' and affiliate programs. They seem to have good focus on their high fashion niche.

    We are doing apparel but with quite a bit of a twist that will allow for another layer of customers-as-creators on top of what is out there today.

    Patty Seybold

    Good luck with your site.. Based on the name, InnerTee, will you be doing more T-shirts, or something different??

    So, is the customer whose perceived value you're concerned about, the customer who comes to buy or the customer who comes to design or both?

    As far as I can tell, customers-as-creators tend to get a lot of personal gratification from having their designs produced commercially.

    In terms of perceived value for the end-customers, what seems to work the best is for the customers to feel as if they're part of an "in crowd."

    One company that does a good job of involving customers as promoters is Karmaloop--Greg Selkoe's company.. have you checked them out?


    Miles Sims

    Great article. We are working on launching a new site based off of some of the principals mentioned and one of the hardest things is managing the customer's perceived value.

    Easy enough to do on site like Flickr as you as sharing your own content with others, not selling it. But a bit harder I think as you shift into an ecommerce environment where you are making money off of customer content and must strike a balance between your margins and keeping your customers happy with whatever % or bounty they get.

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