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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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    February 23, 2006



    Hi Patty,
    It seems my last post was not successful. I have a question to ask? When you talk about Lead Users vs Lead Customers do you included corporate Users/Customers? It seems that the only dimension of compariosn is the final customers here, wouldn't corporate Lead Users be beneficial in this comparison? or is there no such thing as Corporate Lead Users?

    Many thanks Patty, I sincerely enjoy your blog.

    Zu'bi Al-Zu'bi
    Durham University Business School

    Dana Richardson

    Hi Patty- Have been away for a while doing a little developing of my own, it feels good to be back, your intellectual center is like a breath of fresh air. Patty this idea of lead user innovation is fascinating. My thought is to wonder if when approaching to the situation of the market - what assigns pricing? .99 for a piece of downloadable seems arbitrary? If it is, I'm certain Jobs researched it thoroughly befor assigning it, but if its not, then my question would be something about marketing costs and how such might be established. ---Yes as you might guess...I'm fishing here...have you looked at Sort of an odd place...but it seems to be working? - Thanks for you bringing to us such fascinating material.
    - Dana

    Patty Seybold

    Hey Matt,
    Thanks for the pointer. I'd love to chat with you about your innovation toolkit and some of the results you've seen. And how you've been able to fold these back into services you can use..

    I'd love to be a fly on the wall for your second venture as well...

    Let's set up a time to chat...


    Matt Locke

    Hi Patty,

    You might be interested in the open innovation projects we're developing at BBC New Media in the UK. I've long been a fan of Eric Von Hippel's ideas on user innovation, and we launched our own 'toolkit' environment last May -

    Backstage provides RSS feeds of BBC news, weather and other content, and encourages lead-users to 'build your stuff with our stuff'. The resulting ideas and prototypes are hosted on users sites, but linked to from the backstage site. We've see a huge number of prototypes generated by this community, and we're starting to go out to the developers and commission some of the prototypes into full services. We're also experimenting with design challenges on the site (eg a recent competition to 'hack the tv schedule').

    The main driver for launching backstage was the recognition that users were hacking their own services using our content anyway, and that we should embrace this and provide the tools to make it easier, rather than rty and stop it. We're also developing other open innovation projects to increase the number of ideas we get from outside the BBC. The second of these - Innovation Labs - is aimed at independent New Media companies in the UK, and we're just about to go into 3 weeks of rapid prototyping with teams selected through this process. The innovation Labs site is at

    It'd be good to know whether these projects have parallels in the case studies for your book - looking forward to reading it!


    Patty Seybold

    Received this note from Eric von Hippel--

    Hi, Patty - thanks for the interesting comments in your blog - very glad
    our information is useful to you!!

    I forgot to mention that I learned interesting things about your vs my approaches by reading your blog entry - very clearly done - thanks!!


    The comments to this entry are closed.

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