The Future of Innovation: The Rise of the Creative Customer

Not only is innovation a hot topic, it is a survival requirement for most 21st century companies.  Traditionally, companies have innovated by sending out market researchers to discover “unmet needs” among their customers. These researchers report back. The company decides which ideas to develop and hands them over to project-development teams. Studies suggest that about three-quarters of such projects fail. The company I work for is employing this approach in its innovation efforts.

I stumbled upon this outstanding article from the Economist (March, 2006) which presents several cases where companies have taken a new approach to innovation.  Instead of taking the temperature of a representative sample of customers and designing projects around those insights, these firms invite their customers to participate directly in the innovation process.

Eric Von Hippel of the Massachusetts Institute of Technology, who is about to publish a book, “Democratising Innovation” (MIT Press) says, “Such innovation has a “much higher rate of success”.

This seems like a natural progression to me, given the rise of the “Generation C” and “Customer Made” trends. Businesses are starting to realize that their customers are ready and willing to help them design a better product/service/experience and they are willing to do it for free.  All we have to do is ask them.

The Economist article is here.

Your Washer is Calling and the Dryer is on IM

[via Slashdot]
Laundry Time, an eight-week pilot program from the Internet Home Alliance, begins next week with three Atlanta families and the technology and services of Microsoft, HP, Panasonic, Proctor & Gamble and Whirlpool. The idea is to allow family members to receive alerts and control certain laundry functions from their PCs, cell phones and TV sets, presumably so they can spend more time with their PCs, cell phones and TV sets.  (BTW, click the link to read the story over at NetworkWorld.  It’s pretty funny!)

I am all for tech for the sake of tech, but I’m pretty sure this is one of the signs of the Apocalypse Nostradamus prognosticated.

Quick Delivery e-Commerce is Back

[via Springwise]

In the San Francisco Bay area and Atlanta, two e-commerce companies are betting on the appeal of almost-instant delivery.

Back in the ’90s, Kozmo offered speedy delivery of anything an urban dweller might want or need fast, without leaving their home or office. Pack of diapers or a bag of Cheetos – everything was delivered under an hour. No delivery fee, and no minimum order amount. Although they turned a profit in New York, Kozmo expanded to other cities too quickly, infamously burned through USD 280 million in venture capital, and went bust in 2001.

Kozmo’s former CTO went on to launch MaxDelivery in 2005, which Springwise featured earlier this year (along with Turkish After-9). Here are two more ventures that are giving the instant gratification model a try.

San Francisco-based LicketyShip is currently in beta, and delivers to select areas around the Bay (including San Francisco, Berkley, Oakland, San Jose, Cupertino, Sunnyvale, Mountain View, Palo Alto, Menlo Park, Santa Clara, and Marin).

Besides what seems like a more prudent approach to spending VC dollars, LicketyShip delivers within two hours instead of one, and charges around USD 20 for delivery. Also, instead of holding inventory or employing a stable of bike couriers, LicketyShip works with local retailers and delivery companies. An extensive database continuously tracks product and courier availability. The company’s database features over 20,000 articles, including lots of electronics and office supplies.

On the east coast, Zifty has been offering Atlantans fast delivery since 2004. Zifty delivers food, movies, magazines, snacks, and household goods in about an hour, and partners with restaurants to deliver meals. The company employs drivers, but keeps costs down by paying them per delivery. All orders have a delivery fee of USD 0.99, and an additional USD 2.99 is added for orders from restaurants. Orders with a subtotal over USD 50 get free delivery, and those placed more than 2 hours in advance get 50% off the fee. Minimum order size is USD 9.95.

Now that everyone’s online, and consumers are willing to pay extra to save time and get instant gratification, similar uber-convenience concepts are popping up in cities around the world. One to copy to your neck of the woods!

More on Social Media

[via WhatsNextBlog]

With YouTube doubling its traffic monthly, and MySpace now more popular than Google and Yahoo, big companies and their agencies are struggling to understand the implications of social media. I’m sure more than one CMO is wondering, “are the inmates really taking over the asylum?”

In a thoughtful article, Robert Young explains why media companies need to ebrace social integration. His advice also is poignant for corporations large and small, from giants like Dell to a small company trying to spread its name with viral marketing:

“… why should media companies even think of embracing social integration? Because they have no choice… social media will continue to take market share away from traditional media, regardless of whether the media companies participate or not.”

Social integration is indeed the key to the new media revolution. When companies accept the fact that customers have to tools to make their voices heard, they can begin to look at the opportunities that including customers’ voices in the marketing mix present.How can companies participate in social media without giving up total control?
Here are just a few baby step ways to begin:
– When customers complain, it’s usually because something needs to be changed. Make the changes, over-deliver on improvements. Thank your customers for caring.
– When customers like a product enough to make their own commercials about it, a smart company will link to those commercials.
– Don’t fight em, join em, partner with a social media outlet.

Integrating marketing with social media is smart, effective, and, when you come right down to it, necessary.

Why Social Media is Disruptively Dangerous

Karl Long over at ExperienceCurve writes an excellent post about Social Media. The key point of his post is that social media is dangerous for “big business” because that it’s influence is barely noticeable on traditional measurement systems (Market share, mind share, recognition, recall). Big business doesn’t notice or care if they lose .5% of their customers, even if the best, most passionate, most creative, most talented, most vocal, most evangelical .5% of their customers are leaving to go and create something amazing with another company who will soon be big enough to eat their lunch.

The link is here.

Second Life Charity Walk

[via PSFK]

How do you innovate on the tried and true races and “walk-a-thons” used by many non-profits yo raise money and awareness? It remains a solid and mature tactic used by many organizations around issues from breast cancer to MS.

Well, for the second year in a row, the American Cancer Society is running their Second Life Relay for Life and it happens from July 22-23rd in…Second Life. The virtual race will unfold in the MMORPG taking advantage lof the established community there and the more elastic laws of physics and economy that can happen in a made-up world. Here’s how they describe this:

“The main difference is location. SL residents set up and decorate campsites, and sell small items to help raise Relay money just like at your local relay. However, since this is a virtual environment you may see some teams offering blimp rides, or holding sailboat races inside the park.”

How do you innovate on the tried and true races and “walk-a-thons” used by many non-profits yo raise money and awareness? It remains a solid and mature tactic used by many organizations around issues from breast cancer to MS.

Well, for the second year in a row, the American Cancer Society is running their Second Life Relay for Life and it happens from July 22-23rd in…Second Life. The virtual race will unfold in the MMORPG taking advantage lof the established community there and the more elastic laws of physics and economy that can happen in a made-up world. Here’s how they describe this:

“The main difference is location. SL residents set up and decorate campsites, and sell small items to help raise Relay money just like at your local relay. However, since this is a virtual environment you may see some teams offering blimp rides, or holding sailboat races inside the park.”

Digital Influence Mapping Project

BBC To Launch Customer-Created Stations

The BBC plans to introduce a new customizable service called MyBBCRadio. It will allow listeners to take control and create their own personalized content, FMQB reports. It will combine various services already offered by the British network, such as podcasts and Internet radio options like their on-demand iPlayer service.

FMQB: Radio Industry News

Smart Mobs In China

Smart Mobs are a rapidly growing trend in Asia.  If you don’t know the term, it is basically a group of people who arrange the meet up over the internet or via test messaging, and show up at a retailer at a specific time and use their number to negotiate a discount with the retailer.There was a story in last week’s “The Economist, which discusses a hot trend in China called “Tuangou” which translates to Team Buying (aka smart mobs).  In the story, a Tuangou group of 500 show up in Gomei (largest home electronic retailer in China) at 4pm on June 16th and negotiate a 10 ~ 30% discount for the group. Gomei not only closed the door to the normal customers but also prepared goody bags for these Tuangou shoppers.

Powered by the internet and an economy where haggling is a way of life, the trend is apparently spreading like wildfire.   What’s keeping this phenomenon from gtaking root in the US?  How would US retailers respond to it?

The Economist article is here