15 07, 2013

[Featured Research] User Generated Brands and their Contribution to the Diffusion of User Innovations

By | 2018-06-14T06:34:20+00:00 Juli 15th, 2013|Co-creation, Design, Featured Research, Research Studies|

Continuing our mini-series on noteworthy research from around the world, today we feature new work by Johann Füller, Roland Schroll and Eric von Hippel who show that usersnot just are the source of most innovation, but also can create powerful brands


ResearchUser Generated  Brands and their Contribution to the Diffusion of User Innovations
, by Johann Füller, Roland Schroll, Eric von Hippel

Published in: Research Policy, Volume 42, Issues 6–7, July–August 2013, Pages 1197–1209

Available on: ScienceDirect.com

 

(based on the abstract)

It has been argued that users can create innovations
and also diffuse them peer-to-peer independent of support or involvement
by producers
: that “user-only” innovation systems can exist. It is
known that users can be incented to innovate via benefits from in-house
use.

But users’ incentives to invest in diffusion are much less clear:
benefits that others might obtain from their innovation can be largely or entirely an externality for user innovators.

Of
course, effective distribution of information products can be done
near-costlessly via posting downloadable content – for example, software
– on the Internet. However, potential adopters must still learn about
the product and trust its qualities.

In producer systems, this aspect of
diffusion is heavily supported via the creation of trusted brands. It
has been shown that brands help to increase awareness, to communicate a
product's benefits, and to reduce perceived risks of adoption. The
development of brands by producers is traditionally seen as a very
costly exercise
– unlikely to be thought of as worthwhile by users who
expect little or no benefits from the diffusion of their innovations to
others.

In this paper the authors explore the creation of a strong and trusted
brand by the Apache software community
– and find it was created
costlessly, as a side effect of normal community functioning. The authors think
the costless creation of strong brands is an option that is
generally available to user innovation communities. As they 
propose, it supports the existence of robust, user-only innovation systems by
helping to solve the problem of low-cost diffusion of trusted
user-developed innovations.

18 05, 2013

Just Released: Completely New 2013 Edition of Our Open Innovation Market Study

By | 2018-06-14T06:47:26+00:00 Mai 18th, 2013|Co-creation, OI Market Study, Open/User Innovation, Research Studies, Technologies & Enablers|

OIA_2013Fresh from the press! For the second time, our open innovation study explores that market of open innovation accelerators (OIA), organizations that help their clients to include external experts in all stages of an innovation project.

Open innovation today has become a core tool in innovation management. But which is the right method for open innovation? Which are the criteria to plan an open innovation project? Which intermediary or service provider has specific knowledge and expertise in, e.g., crowdsourcing, the lead user method, Netnography, idea contests, technology scouting, or broadcast search? This totally updated, 2013 edition report provides a comprehensive analysis of the providers and platforms for open innovation.

We take a detailed look on the methods, cost, project and community structures, and market size. Our purpose is to support strategic decisions when planning an open innovation venture. Managers will gain an overview of the intermediaries available for open innovation and will get advice how to identify partners for their project.

We invited more than 160 intermediaries to join our survey investigating
the OIA’s business model and environment, productivity, services offered, project specifics, and characteristics of their participant pool. In addition, we asked about estimates for the development of the open innovation market. Besides a lot of highly interresting findings about the market for open innovation in general and the intermediary's role in it, we were also able to compile 188 detailed accelerator profiles.

In the following weeks, we will post a series of articles with selected findings from the market study!

The study is available via Lulu.com in both a paperback and an ebook version.

A preview can be found here.

4 04, 2013

Mass Customization at HannoverMesse – Project KUMAC Featured in #HM13 Science Hall

By | 2018-06-14T06:47:53+00:00 April 4th, 2013|Co-Design Process, Customization Trends, Events, Featured Research, Offline Customization, Research Studies, Service Customization, Technologies & Enablers|

BannerFrom 8th to 12th of April 2013, famous trade show  HannoverMesse will take place in Hannover, Germany. Are you going to be there? Great! So will I.

The German Federal Ministry of Education and Research (BMBF) will have a large exhibition stand in a prominent spot (hall 2, stand C24) and has invited my research group at RWTH Aachen University to join them. We will present the latest findings from our research project KUMAC which is being funded by the BMBF.

I will be there on Monday, 8th, during the afternoon. Of course, members of our project team will be present throughout the week. So if you are going to visit any the largest industry tradeshow of the world, make sure to stop by! 

The objective of the KUMAC project is to develop new
methods for mass customization providers in the German retail market
.
These methods support an increase in productivity and value creation
potential of these retailers.

At HannoverMesse we will simulate the prototype of an interactive value-creation process in mass customization, using KUMAC technology to demonstrate its potential to increase both effectiveness and efficiency. In detail we will show and expain:

  • The Live-Help-System connecting online-offline configuration,
  • The Tablet Configuation Software,
  • 3D-Scanner and Softwaretools as well as
  • RFID-Technology for mass customization.

 

4 04, 2013

Aalborg University to Host Next MCPC in Feb. 2014

By | 2018-06-14T06:47:58+00:00 April 4th, 2013|Customization Trends, Events, MCPC2011, Research Studies|

Aalborg_NyTorv_2004_wikimedia_commonsIn February we posted our open letter about the sad fact that we could not organize and host this year's MCPC conference due to capacity constraints. Many of you have contacted me about alternative ways to keep the MCPC alive and today I am glad to announce that the Mass Customization Research Group at Aalborg University has commited to hosting the conference in 2014.

Below please find soem extracts from their announcement letter, including a call to feedback for everybody interested in actively participating in the shaping of this conference.

We are really glad that there is so much dedication to the project within the MC community and hope that MCPC will continue to be a corner stone of the international MC family.

Dear MC Community,

It was with
some regret that we received the message from our good colleague Frank Piller
and his hardworking team, that he and his organization for different reasons will
not be able to arrange and host MCPC in 2013.

We, the
Mass Customization Group at Aalborg University, have decided to get more
engaged in the current process under certain conditions; therefore we address
this formal letter to the MCPC community with support from Frank Piller and
Mitchell Tseng.

First of
all, Aalborg would be able, willing, and delighted to host the MCPC 2014 in
Denmark on Feb 4-7, 2014
to offer the MC community a continuous place to meet
and exchange ideas.

We believe
that the biannual MCPC conference still has great value for MC researchers and
practitioners and we owe our friends a lot of credit for the work done in
previous MCPC conferences.

But changes
are needed and we believe that this is also what Frank & Co are expressing
with their message last week.

We will
suggest a very simple way of organizing the future MCPC event, by forming 2
committees: (self-nominating):

The International Organizing Committee has
the obligation to arrange each conference. This committee has at least 6
members, where 3 members are from the organization/research group hosting the
upcoming event, 1 member from past organizer organization, and 1 member coming
from the organization to be in charge of the next upcoming event. The members
of The Organizing Committee are presented in the closing session of each MCPC
conference as well as the location of next conference. The chair of the
Organizer Committee is held by one of the 3 "hosting" members.

The International Scientific Committee has
a minimum of 9 members, of who 2 members are from the hosting organization and the
rest are representatives from the general MCPC community. The Scientific
Committee is expected as advisory partner for the hosting organization in
selections of topics, keynote speakers and themes for the upcoming MCPC, as
well as the members will be asked as needed to assist as chair for sessions, reviewing,
chair group of reviewers etc.

And we ask you to become involved:

RESPONSE DEADLINE: 19th of APRIL

  1. Let us know whether you believe in a future
    global MCPC and the plan sketched above.
     
  2. If you would be interested in being a member
    of the Scientific Committee please let us know.
  3. If your organization would be interested in
    hosting the MCPC 2015 conference, please let us know.

Please send your response to: kni@m-tech.aau.dk

In case we are
getting enough thumbs up, positive feedback, and candidates for the Scientific
Committee, we will immediately start organizing the next MCPC and keep you
informed

Mass
Customization RESEARCH group

Department
of Mechanical and Manufacturing Engineering, Aalborg University, Denmark, Kaj A.
Joergensen, Thomas D. Brunoe, Stig B. Taps and Kjeld Nielsen

 

 

Aalborg MC Group

The group currently consists of four senior researchers including Kaj A. Jørgensen, Stig B. Taps, Kjeld Nielsen & Thomas D. Brunø and three Ph.D. students, Steffen N Jørgensen, Simon Haahr Storbjerg and Tufail Habib.
17 01, 2013

[Featured Research] Study Backs Long Term Claim with Hard Data: User-Generated Products Make More Profit

By | 2018-06-14T06:48:38+00:00 Januar 17th, 2013|Co-creation, Crowdsourcing, Featured Research, Furniture - Home, Open/User Innovation, Research Studies|

Since years we argue that customers / users not just have good ideas for new products & services, but that products with roots in user innovation are actually more profitable and superior to inhouse-developed products. There has been some anecdotal evidence to prove this claim, and lots of case studies, but not hard data. But now a study provides hard evidence:


Journal_of_marketingUser-generated versus designer-generated products: A performance assessment at Muji
, by: Hidehiko Nishikawa, Martin Schreier, Susumu Ogaw, in: International Journal of Research in Marketing (2013)

Our colleagues Hidehiko Nishikawa (Hosei University), Martin Schreier (WU Vienna University) and Susumu Ogawa (Kobe University) show that user-generated products perform better
on the market than their (professional) designer-generated counterparts. Their idea is to systematically compare actual market performance of user-generated products with firm (designer)-generated ones.


User innovation (red) vs firm innovationThe authors present a unique data set gathered from the Japanese consumer goods brand Muji, which has drawn on both sources of ideas in parallel in recent years. They demonstrate that user-generated products in the furniture category, which are found to generally contain higher novelty outperformed their designer-generated counterparts on key market performance metrics.

Specifically, in the first year after introduction, sales revenues from user-generated products were three times higher and gross margins were four times greater than those of designer-generated products.

These effects also increased over time: after three years, the aggregate sales revenues of user-generated products were, on average, 1.25 billion yen (approximately 16 million dollars) higher, or five times greater, than the sales of designer-generated products. The corresponding average margin was an impressive 619 million yen (approximately 8 million dollars) higher, or six times greater, than the margin for designer-generated products. Finally, user-generated products were more likely to survive the three-year observation period than designer-generated products (i.e., were still on the market three years after introduction).

These findings clearly favor the paradigm shift identified in marketing research and appeal to managers considering the integration of user ideas into the process of new product development. In their paper, the authors discuss the study’s limitations and identify important avenues for future research.

I find this study especially interesting as MUJI is world-wide admired for their great inhouse design team! Also, the study shows that this is more than a novelty effect: Customers did not know whether a product was user designed or not, they just liked (and purchased) the product!

22 10, 2012

European Commission is Funding Research on Mini Factories for Customized, Decentral Production

By | 2018-06-14T06:50:12+00:00 Oktober 22nd, 2012|General, Research Studies, Technologies & Enablers|

Logo_enAs part
of the Factories of the Future Call, the European Commission is focusing on
mini factories for customized products using local flexible production.

This is
a topic that I have researched for a very long time, staring with a large
research cluster during my old times at TU Munich (here some old paper: http://link.springer.com/chapter/10.1007/3-540-27367-0_27), and continuing with more recent research.

So it is
very interesting that the EU Commission now also is taking up this topic and
proactively is asking for proposals. In their call, they formulate future needs as follows:

Advanced production
equipment
and innovative systems are needed to enable ultra-fast and cost
effective manufacturing of fully customised products on the spot
and exactly at
the required time
. Innovative production solutions must be developed to bring
manufacturing operations closer in time and space to the final customer. In
addition, new factory concepts need to be developed like on-site factories or
factories-in-a container
, which provide instant manufacturing and customisation
services in retail environments.

Those
mini-factories, addressing adaptation to customer needs at or near the point of
sales or use, will be characterised by fast ramp-up, small footprint and
reusability, and will be easy to handle and to set-up. Those production systems
should also include related new technologies for supply chain management,
product distribution and direct end-user interaction.

 

The call expects project results to have the following impacts:

  • Increased ability to rapidly follow the market dynamics by means of fast
    production and delivery of personalised final products.
  • Reduction of the time to market by 50%.
  • Cost
    reduction (around 30%) by decreasing lead times in product and process
    development.
  • Set-up
    and ramp-up time reduction (around 30%) for new processes and plant designs of
    the mini-factories.

This is
a really interesting field, and if anyone is searching for a scientific partner from a business school eager to join a consortium,
please let us know 🙂

8 09, 2012

[Participate] 5th International Conference on Mass Customization and Personalization in Central Europe

By | 2018-06-14T06:54:05+00:00 September 8th, 2012|Events, Personalization, Research Studies|

MCP conference 2012The International Conference on Mass Customization and Personalization
in Central Europe
(MCP – CE 2012) is an affiliated conference to the MCPC conference series.

Organized for the fifth time, the biannual MCP-CE meeting would
like to emphasize the role and importance of Customer Co-Creation that
offers customers a chance to express their differences, and also an
opportunity for innovations and new business models such as MC and open innovation platforms, for sharing designs and developments and benefits
from the experiences of others.

International response has been great so far, with 45 papers from scholars of no less than 16 countries being submitted until today, many of them dealing with open innovation (40%) and customer co-creation. Organizers are looking forward to at least 60 participants, scientists, entrepreneurs and corporate managers, dedicated to the idea of mass customization and personalization. I am personally happy to
support the event as a keynote speaker this year.

For more information on the conference, speakers, participants and booking please see the official conference website!

29 08, 2012

The next big trend in innovation management: Reverse Innovation: A book review and how does this relate to open innovation

By | 2018-06-14T06:54:15+00:00 August 29th, 2012|Books, Cases-Industrial, General, Open/User Innovation, Research Studies|

Reverse Innovation as seen by Google Image Search

Reverse Innovation as seen by Google Image Search

I am sometimes asked what is the next big trend in innovation management. Given a number of recent discussions and observations, I would now bet high stakes that "Reverse Innovation" will be the idea that will shape our understanding of innovation management a lot in the next years.

 

The term reverse innovation, in short, describes how innovations made in the so-called developing countries can often lay the foundations for product innovations in the "developed" world. More often than not, these are relatively cheap yet efficient new concepts which can seriously callenge products on an existing "western" market — they often are a source of disruptive innovation.

Developing countries are catching up on the knowledge- and technology gap and with that comes an increased chance for major innovations to be born in these countries. And this is where open innovation thinking comes into play: 

  • First, we know from lead user research that lead users often develop novel innovations under extreme conditions. Developing countries often provide these extreme conditions (budget, but also climate or working conditions) — hence leading to a high incentive to innovate in a functional novel way.
  •  Second, a core idea of OI is to get input from unobvious others — this is where broadcast search helps a lot. And developing countries offer a great potential for "unobvious" sources of ideas.
  • Third, when established companies develop a product for a new market that demands a "good enough" solution that only costs 10% of the comparable established "western" product, they are often forced to look into very new fields and approaches — input that often only can be acquired by looking beyond the firm's borders.

Hence, for established companies, reverse innovation offers both a source often "open" thinking and input for the own innovation process, and at the same time demands new approaches and networks.

 If you want to learn more about reverse innovation, there is one book to read:

Copyright Harward Business Review Press, all rights reserved!Reverse Innovation: Create Far From Home, Win Everywhere

Written by: Vijay Govindarajan, Chris Trimble, Indra K. Nooyi (Foreword)

Availible at Amazon: Hardcover Edition, Kindle Edition


Prof. Vijay Govindarajan
( Tuck School of Business ) is the leading scholar researching this field. Together with his collegue Chris Trimble he has recently published his new book about the topic which I read in my recent summer vacation.

The book is an easy read: In part one, Govindarajan and Trimble describe in rather brief form how major companies are beginning to realize that the popular concept of glocalization is not necessarily the best approch to conquer new markets. They describe the flaws on the concept and why reverse innovation promisses better results in many cases.

Glocalization refers to the business concept often associated with the saying "Think Global, Act Local", in practice realized by taking an already existing product and adapting it to new target markets. If the target market is part of the developing world, these adaptions are usually severe downgrades.

Govindarajan/Trimble explain that these downgraded products are in fact often not what the target market needs – or even wants. Each market requires products fitting it's specific needs and given resources. And that is something that can often no be achieved by just stripping product features to allow a cheapter retail price.

The authors show how reverse innovation can help to overcome this barrier. By inventing locally, right at the target market, instead of at home, far away from the conditions and actual customers, companies can be enabled to develop the exactly right product for the market – not a stripped down version of an existing good.

While reverse innovation is the more risky, more pricy alternative at first glance, and many internal and external obstacles have to be overcome, the described advantages are remarkable: Not only can a company better tackle local markets in the developing world. Products invented abroad have a high potential of being cheaper, offent radically innovative and can potentially be engineered to become suitable alternatives for existing products on the companie's home market as well. The innovations made abroad come back home: Reverse innovation.

Part two of the book has eight business cases in which the conecpt is applied and explained why it is advantageous over other approaches. These include companies like Logitech, P&G, EMC, Deere, Harman, GE Healthcare and PepsiCo.

So, in conclsuion, a very interesting concept, and important idea, and a good read!

20 07, 2012

Featured Research: Open Innovation in the German Automobile Industry

By | 2018-06-14T06:54:55+00:00 Juli 20th, 2012|Cases-Industrial, Crowdsourcing, Deutsch (in German), Featured Research, Open/User Innovation, Research Studies|

Copyright Ili Consulting, www.ili-consulting.de, all rights reserved!German cars are the best in the world. While I can see this statement instantly being challenged by some, the international reputation of and demand for German cars, especially in the high price segment is pretty high.

A brand new study by German innovation expert Ili Consulting shows that the advantages of open innovation have been understood by managers of German car manufacturers and their suppliers.

While companies like BMW, Audi, or Daimler have been forrunners in customer co-creaton via ideation contests, I did not see much OI on the technical level in German Big Auto.

This 2012 edition of the study "Open Innovation in der Automobilindustrie" is the second iteration after a similar survey in 2009. Comparison impressively shows that more and more of the asked managers on the middle, higher and top level follow the trend to get their company's research from a closed to an open one, thereby laying grounds for the harvest of the great innovation potential that the crowd of consumers is.

 

Copyright Ili Consulting, www.ili-consulting.de, all rights reserved!

Comparison chart of manager's answers from the 2009 and 2012 iterations of the study. Clear shift towards open innovation

As has been said by many participating mangers, highly innovative ideas are short in supply. These are, however, one of the most valuable goods a technology company can have, and also the most important advantage Germany has on the international market.

The understanding that the old credo of "we have all the experts we need in house" no longer works in todays fast, interconnected markets and that flexibility and openness for external input, both for criticism and ideas, is crucial to mission success, has finally gotten a solid foothold in headquarters of majors and SMEs alike.

Open innovation is, however, not as easy as putting a website up, asking for ideas. There is much more to it to successfully tap into the wisdom reservoir of the crowd, and without competent guidance by experienced innovation consultants, opening oneself's knowledge stock up to the masses can be a risky venture.

For those of you engaged in businesses where your market share and revenues depend on technological advantage and satisfied customers (not only car-industry specific), the  study may hold some very interesing findings regarding the market, the progress from open to closed innovation, sources of innovation and their rating by practitioners as well as actual obstacles one will face when opening innovation.

The study can be obtained by contacting Ili Consulting directly. For contact information please refer to the contact section of their homepage (while writing about open innovation,, they were not open enough to provide the study as "open access").

10 07, 2012

Conference Report MC2012: The German Mass Customization Community Meeting

By | 2018-06-14T06:55:16+00:00 Juli 10th, 2012|Cases-Consumer, Cases-Industrial, Co-creation, Co-Design Process, Crowdsourcing, Customization Trends, Events, MC/OI on the Web, Offline Customization, Open/User Innovation, Personalization, Research Studies, Service Customization, Technologies & Enablers|

Copyright FH Salzburg, http://www.google.de/url?sa=t&rct=j&q=fh%20salzburg&source=web&cd=1&ved=0CFoQFjAA&url=http%3A%2F%2Fwww.fh-salzburg.ac.at%2F&ei=EoPxT5vBMqqg4gTRqfncDQ&usg=AFQjCNFVR6AyMuGxHyBpGzKbuuuWdY_6jQ&cad=rja, all rights reserved!Unless you started following my blog just now, there is no way you could potentially have missed the announcements, special editions and features about the MC2012. This year's edition of the largest MC conference in German language, hosted by Dominik Walcher, Paul Blazek and myself, took place on 29th of June.

Despite the early time of day, the air already started to flicker from the upcoming heat of what promissed to be a really nice summer day at the marvellously desgined building of the University of Applied Sciences near edge of the Alp mountains in Salzburg, Austria.

About 150 professionals, researchers, entrepreneurs and enthusiasts from all parts of the mass customization landscape in the German experienced a tightly packed day dedicated to the opportunities of customer co-design.

Copyright TIM Lehrstuhl, www.tim.rwth-aachen.de, all rights reserved!

Panoramic audience shot. Click to enlarge!

And what a day it was! A buzzing audience followed the presentations of no less than 24 speakers, ranging from young entrepreneurs, telling the tale of their entrance into the MC market, global players and market leaders, giving insight into proven ways and tactics to profit from customer participation, to leading scholars, showing how latest research proves the concept of the integrated customer to be more than a trend.

To not only preach customer integration but actually live up to our words and integrate our conference participants beyond questions and one-on-one networking, we had a special feature in place. Werner Haring, founder and CEO of wallero.us, had contributed to the event's multi media experience by "installing" a social media wall right next to the stage.

Copyright Profilfoto von CoworkingSalzburg Romy Sigl CoworkingSalzburg Romy Sigl, all rights reserved!

Social Media Wall, Courtesy of wallero.us. Click to enlarge!

This application was a real eye-catcher and various running gags were born during the course of the event – and you still can follow the #MCSalzburg hashtag for a report of the conference.

 The day headed off with the introductory panel. After a hearty welcome by co-host Dominik Walcher, my research group's members Dr. Christoph Ihl and Thorsten Harzer outlined results from our research projects and demonstrated some of the numerical "magic" behind Mass Customization and Open Innovation and how it can be utilized to take the right decisions about mission-critical aspects that many companies do not even realize to be of great importance.

As an example: asked about the ideal number of customization options to offer in your configurator (solution space), would your answer have been: "As many as possible, since more choice equals happier customers!"? If your answer to this is "yes" then our latest resarch findings might offer some ways to improve your customer satisfaction.

Following Dominik Walcher's insight into the development and outcome of the MC500, our great study of the most important MC companies from around the world, I had the chance to present on the importance of customer integration and how companies of all sizes can profit from proper employment of the concept, as well as some new MC trends of the future.

Next on the agenda was the market panel in which Franz Blach (IDEO), Franz Hölzl (Kaindl) and Wolfgang Gruel (Daimler) gave really interesting and well-received insight how Open Innovation, individualization and co-creation have changed the way they are conducting their business and the ways they found to profit from it:

  • An interesting attempt at improvement of working culture were IDEO's working ethics, as Franz Blach outlined them. They are meant to be pretty much contrary to what we are used to in most larger companies these days. Instead of perfectionism and pressure, IDEO deems a culture in which close teamwork, prototypical work (things do not have to be perfect in their first iteration, can evolve and develop), error tolerancy and more fun are the key principles. While there is certainly more to a successful innovation company, this is certainly an approach favorable by many employees.
  • Franz Hölzl demonstrated how Kaindl was able to offer a totally new way to produce wooden flooring, printed with individual patterns and colors, in great looking quality. Because of their production technology and business model, they can deliver a much more customized product at a significantly lower price.
  • Wolfgang Gruel finally brought up the question if/why it is necessary that privately owned cars are often used in a really inefficient way, standing in the driveway most of the time and usually being too large for most of the time they are used. Daimler has been working on models to counter this development by employing car sharing, car pooling and affordable renting models. Nothing revolutionary new, you will say, but this time it is being done large-scale, by an international company, and not your small start-up next door. It will be interesting to observe whether Daimler can actually change something about the status quo or if the highly valued status symbol "car" will remain untouched by the means of sheer efficiency.

 

Original images copyright CoworkingSalzburg Romy Sigl , collage copyright TIM Group, all rights reserved!

Some captures of our speakers. Click to enlarge!

Next: the social media panel, moderated by Paul Blazek: For all those planning to integrate social media into their PR strategy as well, talks by Martina Partl and Clarissa Streichsbier of cyLEDGE were as insightful as Catharina van Delden's summary of her company innosabi's (unserAller, anybody?) work. Renate Gruber gave the finishing presentation about how her venture CupCakes made its way from a traditional food company onto the MC market:

  • Partl and Streichsbier pointed out that, while social media in regards to mass customization was nothing new anymore, the combination of social media and open innovation are a perfect match. This is certainly true in so far as open innovation per definition relies on participation and hence any media that is suited to increase awareness is potentially supportive for any OI initiative.

    Interestingly they chose Facebook as an example for a customizable information source. The important role of facebook as a customer relationship tool was stressed by all speakers in this panel. Certainly will be interesting to see if/how companies think of now ways to even better employ the platform for their needs. 

During the lunch break, there was time to check the 20+ exhibitors. Some had even set up live demonstrations of their product offers, like Pasterie, supporting us with freshly made pasta or CowCrowd, demoing their lovely wooden pendants, individualized on-location with your own image and/or custom text.

Next: The start-up panel, hosted by MC-blogging colleague Heiko Vogelgesang (egoo.de). Here, Sabine Beck gave an amazing presentation about how her jewlery business Amoonic manages to mix pre-configured and individually customized rings and more in a great portfolio that every manager dreams about: produced entirely on demand, without any significant need for storage space or the risk of wasting materials.

Interestingly, their configurator is not even visible if you enter their website. At first (and actually second) glance you will not notice anything hinting at the possibility to customize a ring. The configuration options do become visible, however, once you have decided upon one of the preconfigured designs. These can then be individualized using a wide variety of options. Possible combinations of gold, silver and gems of all kinds range from 150 to 2.5 million Euro. Certainly something in this for everybody.

However, from my own testing I found it hard to even find out that you can individualize the rings. You have to actually select one before a respective button appears and that could be a serious usability drawback in my opinion as many potential customers might not even recognize the potential of the store. It does, however, explain why about 40% of their sales are actually preconfigured, non-customized rings. Anyways though, with the average customer leaving between 400-500 Euro in their shop, the concept will certainly be profitable – especially since there are very low fix costs.

Next up was Stickvogel, a promissing start-up which specialized in embroiding and etching all kinds of motives into all kinds of goods. Lately they teamed up with major retailer Butlers, offering custom stitching to customers in Butlers' shops. This B2B customization service concept will certainly be exciting to follow over the (hopefully) next years.

Closing presentation of this panel was helt by Carina Schichl and Tanja Sieder, representing their business for unique custom travel guides, Nectar&Pulse, based on insider tips by what they call "soulmates" rather than generalized all-round information. Locals give their best tips for tourists which are then, upon checking, transformed into nicely layouted guides. While this is certainly an interesting idea per se, the issue I see with it is that the product might not be easy to market. As Schichl and Sieder pointed out, their target group originally were younger people. Instead, most of their customers are 30+. While their choice of age clustering is certainly debatable (and lead to one of the mentioned running gags of this conference), this raises the question: do they actually have the right product for the right market? If their average customer's age is above what they expected, they would likely be well advised to adapt to a different kind of information and layout which fits the needs of this target group better.

Next up was the retail panel. Moderator Jochen Krisch (excitingcommerce) did an outstanding job leading through an exciting lineup of big names: Former Bundesliga-athlete Sven Renz showed how his product line of completely customized ski/sports shoes has blessed his company with a yearly growth of 20-50%. However, I expect there to be an even larger potential in this market, seeing how ErtlRenz still "only" sold 2400 pairs of shoe at their peak last year.

Original images copyright CoworkingSalzburg Romy Sigl, collage copyright TIM Group, all rights reserved!

Some captures of the exhibition. Click to enlarge!

Claudia Kieserling, winner of this year's much-noticed Million-Dollar-Challenge by Zazzle, gave a short overview of individual shoe manufacturer selve, showing off some of the models availible to women around the world and giving some interesting insight upon questions from the audience. She especially stressed the importance of the customer's shopping experience, which should be more than just pushing a button and receiving a cardboard box.

A great final presenation in this block came from Max Kickinger. His soundbranding company is known for its work with some major companies like Porsche, Swarovski and many more. Commenting on a truly excellent video he explained how companies use clever sound branding to gain the consumers attention – often without him realizing to be guided towards the "right" shelve – and the checkout counter!

Following another networking break, the final panel of the day: The configurator panel, presented and moderated by Alexander Felfering of Graz University, had the technical side of customer integration covered.

Copyright CoworkingSalzburg Romy Sigl, all rights reserved!

Coffee-Break is over, back to the conference room, Alp-Style!

Andreas Falkner (SIEMENS) spoke about the challenges of complex product configuration, especially where multiple dependencies between customizable factors are to be respected (a good example why companies should reffer to an expert instead of just trying to headjump into the MC market).

Marc Herling of Lumo Graphics demonstrated how the use of 3D-configurators can be a blessing for the consumer who can imagine the to-buy product way better than it would be the case with just some images. With more advanced configurators, he says, the concept of WYSIWYG (What You See Is What You Get) will more and more be replaced by YGWYW – You

[actually] Get What You Want.

On the other hand, developing a really well working, appealing 3D-configurator takes a lot more than the amount of work it costs to "just" shoot said product images. Hence, as with so many cases of exploiting new technological opportunities, its a balancing act and might often not be profitable for small companies.

HYVE's Volker Bilgram was up next. In his "Toolkits for Gamification" speech he explained how and why the aspect of playing – adding features that make the process of configuring/buying a product more fun than just an annoying act of shopping – can contribute to a retailer's sales figures. Again: If done correctly!

To complete this panel, Klaus Pilsl of IndiValue spoke about web based configurators and their part in the customer's shopping experience. His company is about to launch a major new "configurator as a (web) service" — something that has been tried for many years, but now finally may become true.

Copyright CoworkingSalzburg Romy Sigl, all rights reserved!My personal conclusions of this year's MC2012:

 (1) MC has great potential to significantly improve a company's sales figures and customer brand loyalty. However, to make it work successfully, more is needed than just to put up a fancy-looking configurator and then wait for clients.

Especially the dialog with the (potential) client is and will be even more important in the future, as more and more companies employ easily accessable social platforms like Facebook to communicate with their crowd. And a lot of both promissing start-ups and established companies could profit immensely from experienced coaching since, as Christoph Ihl had pointed out at the very beginning, even the right choice of customization options (not to be confused with as many options as possible!) can make or break your MC business. 

(2) Mass Customization needs to be less outcome-driven and to be looked upon from a higher, more meta-perspective to develop it further. I believe we know a lot about nice and perhaps even profitable BtoC consumer products. But what about MC services that tackle some of our true global challenges?

(3) Finally, the German MC community really is a nice crowd of great individuals, very eager to collaborate, to share ideas and experiences, and to network!

Looking back on a fantastic conference I truly want to thank everybody who made this possible, may it be as a speaker or a guest, an exhibitor or supportive staff member. Special thanks do go to my dear co-hosts Paul Blazek and of course Dominik Walcher, who did an outstanding job organizing this large event with his team at Salzburg University!

Copyright CoworkingSalzburg Romy Sigl, all rights reserved!

(Most of) our speakers! Click to enlarge!

10 07, 2012

Wrap-Up: MC2012: The Business Workshop

By | 2018-06-14T06:55:19+00:00 Juli 10th, 2012|Events, Personalization, Research Studies, Wrap Up|

IntroOur major event of June, the MC2012 in Salzburg, Austria, was a great success. As you can see in my other wrap-up post, we had a tremendous amount of great speakers, presenting the latest and greatest in Mass Customization and Open innovation.

What I did not cover in great detail so far is the business workshop that has been helt by my fellow co-hosts, Dominik Walcher and Paul Blazek as part of the EU AlpineSpace Project ("Open Alps"), coordinated by ITG Salzburg.

Following an introductory overview of the development of MC, Dominik Walcher and Paul Blazek presented to and debated with the attending enthusiasts (the workshop was already fully booked ahead of time):

  • Content and results of their latest Delphi-Study "The Future of Mass Customization"
  • Long Tail Business in practical application (case studies about Spreadshirt and Lulu)
  • Hard MC vs. soft MC
  • The MC500 study and the Configurator Database (findings and numerous case studies)
  • The 3 most important aspects of successful MC
  • Exclusive cases: CowCrowd and Build-A-Bear
  • The interaction with the consumer: What makes an MC customer want to pay for your product
  • Introduction into Open Innovation
  • Lead-User method, toolkits, idea contests and netnography as key-tools for successful OI
  • Successful OI business models (cases of Threadless and Quirky)

Following this tightly packed bundle of knowledge, participants were invited to apply the new insights to their very own fields of work in a small-group mentored workshop.

All rights reserved!

Some interesting figures on MC. Click to enlarge!

From the feedback we have gotten so far, the business workshop was as much of a success as the conference. We received a lot of positive comments and will be glad to offer workshops like this as open or on-request inhouse events in the future.

26 06, 2012

Featured Research: Collaborating with Customer Communities: Lessons from the Lego Group

By | 2018-06-14T06:55:43+00:00 Juni 26th, 2012|Cases-Consumer, Co-creation, Crowdsourcing, Open/User Innovation, Research Studies|

Our series on featured research articles continues. Today I want to recommend a paper by fellow researchers Yun Mi Antorini (Aarhus University) and Albert M. Muñiz, Jr. (DePaul University, Chicago) as well as Tormod Askildsen (LEGO Group). They tell the story of how LEGO learned to use sophisticated crowd interaction for mutual benefit and explain some core rules of co-creation.

MIT sloan review coverCollaborating With Customer Communities: Lessons From the LEGO Group

By: Yun Mi Antorini, Albert M. Muñiz, Jr.and Tormod Askildsen

Availible at: MIT Sloan Review

 

Lego users have a long tradition of innovation and sharing their innovations with one another — activities that the Internet has made much easier.Long before evreyone was talking about co-creation and user  communities, LEGO fans had "Lugnet", a universe of niche communities of people sharing their creations in LEGO.

As Lego managers became more aware of innovations by the company’s adult fans, the managers realized that at least some of the adult fans’ ideas would be interesting to the company’s core target market of children.

Historically, Lego was an extremely private company that tightly controlled its products and intellectual property. The company’s public position was “We don’t accept unsolicited ideas.”

However, things began to change in the late 1990s following the introduction of a new line of kits called Lego Mindstorms, which contained software and hardware to create small customizable and programmable robots. Sophisticated users found ways to hack into the code and adapt the new products; they talked about their innovations on independent websites.

This presented Lego management with a choice: either pursue legal action against the hackers or invite users to collaborate on new products and applications. The company concluded that litigation would be difficult and costly — and also that there could be significant advantages to collaborating with users.

Through trial and error, Lego has developed a solid understanding of what it takes to build and maintain profitable and mutually beneficial collaborations with users.

In their paper, Antorini, Muniz and Askildsen examine the emergence of Lego’s user communities, how management’s involvement with user groups has evolved and the five core principles that Lego has formulated for successful interaction with its user groups:

  • To be clear abour rules and expectations
  • To ensure a win-win
  • To recognize that outsiders are not insiders
  • Not to expect one size to fit all (different approaches/ platforms might be needed for different audiences) and
  • To be as open as possible

Read the full article at MIT Sloan Management Review!

21 06, 2012

Mass Customization Explained – The Full Series from Innovationmanagement.se

By | 2018-06-14T06:55:51+00:00 Juni 21st, 2012|Customization Trends, Featured Research, General, MC/OI on the Web, MC500, Research Studies, Technologies & Enablers|

Innovation management, all rights reservedI have been tweeting about it during the past weeks as more episodes have become availible:

Together with my colleagues Fabrizio Salvador and Dominik Walcher, we have been given the opportunity to provide an extended overview on eight parts of various aspects of mass customization on the well-known innovation blog Innovationmanagement.se .Finally, the last episode has been published.

The series consists of 8 parts, starting here.

In the series, we tried to shed some light onto:

  • Part 1: Introduction: Competing in the Age of Mass Customization
  • Part 2: The Market for Mass Customization Today
  • Part 3: Solution Space Development: Understanding where Customers are Different
  • Part 4: Robust Process Design: Fulfilling Individual Customer Needs without Compromising Performance
  • Part 5: Choice Navigation: Turning Burden of Choice into an Experience
  • Part 6: Choice Navigation in Reality: A closer look into the Customization500
  • Part 7: Overcoming the Challenges of Implementing Mass Customization
  • Part 8: A Balanced View: Conclusions and Key Learnings
10 04, 2012

Featured Research: From Social Media to Social Product Development: The Impact of Social Media on Co-Creation of Innovation

By | 2018-06-14T07:13:24+00:00 April 10th, 2012|Co-creation, Crowdsourcing, Featured Research, Open/User Innovation, Research Studies|

For our series of featured research on open innovation and mass customization, today — in another act of shameless self-promotion — a new paper from our group at RWTH Aachen University in which we discuss the impact of social media on co-creation of innovation.

Dieunternehmung2From Social Media to Social Product Development: The Impact of Social Media on Co-Creation of Innovation

By Frank Piller, Alexander Vossen, Christoph Ihl (RWTH Aachen University)

Published in: Die Unternehmung – Swiss Journal of Business Research and Practice, Volume 66, No 1 (March 2012), pp. 7-26.  Free download at nomos.de

 

In this paper, my fellow researchers Alexander Vossen and Christoph Ihl discuss with me the impact of social media on customer co-creation in the innovation process.

Customer cocreation denotes an active, creative and social collaboration process between producers and customers (users), facilitated by a company, in the context of new product or service development. We propose a typology of co-creation activities in order to develop conceptual arguments how social media can impact the relationships among customers involved in co-creation as well as the relationship between customers and the hosting firm.

Interestingly, the impact of social media on customer co-creation may be two-sided: Social media can make economic- exchange relations more collaborative and social, but may also turn relations formerly based on social-exchange into “money markets” with strong competition among actors.

Impactsocialmedia

As a result of this paradox, we develop a set of questions that can lead future research in these regards. Read the article for our full argument.

4 04, 2012

Invitation: The Personal Economy – Free Seminar Talk at MIT Media Lab. April 10, 2pm

By | 2018-06-14T07:13:26+00:00 April 4th, 2012|Customization Trends, Events, MIT SCG, Personalization, Research Studies|

Great chance for anyone in the Boston area to reconnect!

THE PERSONAL ECONOMY: From Custom Sneakers to Personalized Medicine
A strategic framework to turn heterogeneous customer needs from a thread into a huge profit opportunity

Mit-media-lab_new-wingMIT Smart Customization Group Seminar Series

2-4pm, Tuesday, April 10, 2012
New MIT Media Lab (E14), 6th floor Lecture Theatre

Location: http://whereis.mit.edu/?go=E14 (street parking is very limited)

What started with customized jeans, personalized sneakers, and engineer-to-order machine tools has become the core element of disruptive industry development: personalization and customization of products and services. Credit card contracts are being customized to a consumer's spending profile, broadcasted radio changes to a media stream fitting just our mood and preferences, blockbuster drugs are being replaced by personalized medicine based on real time data tracking, and instead of a "world car" we just buy mobility when we need it where we need it how we need it.

But what are the fundamental elements of a successful mass customization enterprise? Over the past decade, we have studied mass customization in more than 200 different organizations. Recently, we finalized the MC500, the world's largest benchmarking study of mass customization companies in the consumer goods industries. We found that mass customization is a strategic mechanism that is applicable to most businesses, provided that it is appropriately understood and deployed.

To do so, we have identified three core capabilities that allow companies to profit from mass customization: robust process design, choice navigation and solution space definition.  This presentation will use a mix of case studies and empirical data from the ongoing MC500 research initiative to show the relationships between these capabilities and their impact on firm performance. We will comment on implications of our research for entrepreneurs, managers in established companies, investors and VCs, and for future scholarly research.

The seminar talk is a free public event — just stop by!