Mass Customization & Open Innovation News

A Structure of Customer Co-Creation: Special Issue in Swiss Marketing Journal

In the recent issue of Marketing Review, a German-language magazine on marketing practice, a number of brief articles are addressing open innovation with customers. In the lead article, Christoph Ihl and I are presenting our structure of different approaches of customer co-creation. "Co-creation" is the term I now frequently use to address the systematic integration of customers in the innovation process of a company. Customer co-creation is

".. an active, creative and social process, based on collaboration between producers (retailers) and users, that is initiated by the firm to generate value for customers." (This definition has been inspired by this report of LSE).

In our article, we present the following structure of eight co-creation strategies. The picture is in German (as is the article), but the strategies are easy to differentiate:

The dimensions we found crucial to differentiate between co-creation methods of companies are:

• The stage in the innovation process: Are customers being integrated in the early stages like ideation and concept development ("Frühe Phase") or the later stages like product development, testing, or launching the new product ("Späte Phase").
  
• The relationship of the companies with its customers: Is the company focuing on interacting with single customers which are not connected with each others, or is the company addressing a community of users?
  
• The scope of the task that is demanded from customers: Are companies offering large degrees of freedom for customers to participate, or are they integrating them into a clearly defined, rather narrow task?

This structure is building on our earlier (much longer) report on "Open Innovation with Customers" (Download working paper version). In several workshops with companies, I found this strcuture helpful to differentiate the diverse starting points for co-creation. Here is the link to the full article. I am also happy to send you the corresponding working paper (in German) with the content of this article.

Also in the same issue, Tina Burkhart, a Ph.D. student at our department and at the same time a member of Henkel AG's innovation management team, writes with some colleagues about implementing open innovation in this company. And Katja Hutter and her co-authors have a nice article about customer idea contests as a special measure of customer co-creation.

MCP-CE 2010 Program Published - 4th International Conference on Mass Customization and Personalization in Central Europe

Robert Freund, Co-Organizer of the MCP-CE 2010 (September 22-24, 2010, Novi Sad, Serbia), just has informed me that the program of this conference has been finalized and is available at the website. And he invites you all to join the conference:

"Now taking place for the 4th time, the biannual MCP-CE Conference is the leading event in the field of Mass Customization and Open Innovation in the Central European Region. After meetings in Rzeszow/Poland (2004/2006), and Palic/Serbia in 2008 the conference is coming to Novi Sad/Serbia. The main goal of the conference is to bring the Mass Customization and Open Innovation concept closer to companies and scientists in Central Europe. This year we focus on MC&OI in the Financial Crisis – Challenges and Opportunities.

In cooperation with the regional Chamber of Commerce and with support of GTZ, the German development agency, we will have a  pre-conference workshop on September 22 focused on SME, interested in Mass Customization and Open Innovation. On Thursday and Friday (September 23-24), we will have 29 interesting presentations starting with the keynote of Prof. Cipriano Forza (Italy). So join us at MCP-CE 2010, where developers, business people and researchers intersect with entrepreneurs and corporate managers in Eastern Europe to discuss the latest best practices in mass customization. Yours, Robert Freund."

More information: http://www.ftn.uns.ac.rs/MCP-CE2010/

I am personally very happy about these regional MCP conferences ... next to the MCP-CE, the MCP-Asia Pacific is coming up later during the year, and a Dutch MCP at the beginning of next year.

Conference Report - User and Open Innovation Research at the UOI Workshop and the AOM 2010

(Modified re-post of a posting by Alex Vosson in the RWTH-TIM Blog). During the past weeks, I attended together with some colleagues from our RWTH-TIM group two major events in the conference circle: the Annual User and Open Innovation (UOI) Workshop and the Academy of Management Annual Meeting (AOM).

The UOI Workshop series has been started by Eric von Hippel and Nikolaus Franke in 2001. In the first years, we were a small group of about 5-8 professors with a few PhD students doing research on user innovation (very much lead user, communities, and open source software development in the beginning). Despite being still "by invitation only", this workshop now has grown into a major conference. This year, at MIT, we were about 200 participants, 50% profs. amd post-docs, 50% PhD students.

Visiting the UOI always is special. It is as much a family meeting as a scientific event. Every participant gets a 2-min slot to present recent research or ideas, and so one really get a very good impression about how our scientific community is evolving and see what everybody is currently working on.

My impression from this year's workshop (at MIT): User innovation research is consolidating, we know already quite a lot, and some people are replicating older research, or are really looking into small pieces. In the field of open (distributed) innovation, however, there are still many open spots! And some great high-lebel research is being conducted here. I was very pleased to learn that our own projects on "not invented here". "open innovation platforms", and "user idea contests" as well as "internal capabilities for OI" are really matching with the open research opportunities identified this year.

For more detailed information about the UOI workshop, head here: My colleaque Joel West from San Jose has repored extensively about the event in his great blog: UOI Workshop Report I and  Report II

The Academy of Management Annual Meeting on the other hand is a slightly different, yet not less valuable, event. It is the biggest management conference of teh world. And so it requires a decisive mind, with many interesting sessions just within the TIM division at the same time . For me, the variety and diversity of the Annual Meeting still makes it the best academic innovation management conference in general.

This year, we saw a lot of "open innovation" sessions. Much more research on intermediaries, a lot on absorptive capacity as a driver of open innovation, a little bit on user innovation. For more, please refer to Joel's blog above. The theme definetly is going mainstream, and I hope it will not just become a management buzzword that will be forgotten in a few years.

There also still is a lack of a common definition of open innovation. While the core community has a good understanding of the topic, many people are just exploiting the term for many traditional forms of knoweldge exchange and collaboration in the innovation process.

I believe that the AOM could be the place where a solid discussion on the term takes place, but this year, this was not happening. Still you get a great overview about research from all over the world.

Again, Joel West has a great report about Open Innovation Research at the AOM in general and a special report about a joint session we organized on "Open Innovation with Suppliers".

Spreadshirt: New online-configurator offers better user feeling and more design options

A guest posting by Stefan Thallmaier and Simon Strassburger

Leipzig-based company Spreadshirt AG is Europe’s largest producer of customized apparel. As one of the first large-scale MC companies in Europe, the company has risen steadily from its modest beginnings in 2004 to currently around 300 employees and production sites in Germany, Poland and the US. Core of the company is the configuration toolkit. Within the next weeks, Spreadshirt is launching a new edition of this configurator. Two research collaborators of my Aachen group, Stefan Thallmaier and Simon Strassburger (staff researchers at the HHL Center for Leading Innovation and Cooperation  in Leipzig) got the opportunity for a preview. Here is their report:

On August 10, Spreadshirt gave us the opportunity to a first look the beta version of its new configurator, the ‘Confomat’.  The main reasons for designing a new T-shirt configurator are the increasing user expectations and opportunities for performance optimizations.

In their presentation, Developer Frank Alic and Product Manager Robert Schulz stressed that the core element of the online user interaction system has been changed in several instances. “Usability has significantly increased, as we analyzed more than 350 suggestions from community feedback and customer reclamations over the last years and worked closely with selected operators of our partner shops.”

As a result of an improved visibility, the shirt is now centered on screen with required toolkits arranged around it. To reduce complexity of the ‘Confomat’ and to prevent the risk of size or design misinterpretations, users are now able to obtain instant feedback in case of misconfigurations.

Additionally the newly developed configurator offers a wider range of customization options. To name one example: users are now able to change colors from one letter to the other within one word. These customization opportunities are not available in older versions of the online interface. Hence the solution space is increased to a large extent.

From a research perspective it will be interesting, how users are able to handle the new customization variety. According to spreadshirt the new configurator also affects the systematization of diverse landing pages in the online shop, which support customers to get a first inspiring thought on how to design the shirt.

The new options for customizing the shirt also directly affect the average production time per shirt or accessories. This proofs once more the complexity of the development project for the new configurator, which has been undertaken by spreadshirt. All departments and production steps are directly affected by a comparable small change in the user interface – like the possibility of changing colors in the same word  (from the perspective of the customer).

The new configurator is currently in open beta status, going live within the next weeks. In order to see, feel and test the ‘Confomat’ just follow this link: http://www.spreadshirt.de/-C6221

Woonio - A German MC startup for customized furniture gets it right

Some years ago, I wanted to have a really custom work desk: very long, but quite narrow in its depth. I ended up with a Berlin-based craft shop making a wonderful table for us, at a price of almost $4000 and with a four month delivery time. I am very happy with the product, but not the price I had to pay and the time I had to wait.

The furniture industry is one of the key cases of customization -- but never made the transition to mass customization. Furniture either is purchased standardized at big box retailers like IKEA or in more traditional stores where most items can be customized, but always come with a three month delivery time. I never really understood why the car industry is able to deliver an entire configured car within a few weeks, while a sofa takes three months or more.  In my observation, most players in this industry never really have implemented mass customization thinking -- They stayed with craft customization: No stable processes, no toolkits for choice navigation.

There are exceptions of course, like bene, the Austrian office furniture manufacturer that has one of the world's best mass customization systems. But the general state of the industry really still lacks behind the technical possibilities. Which is strange, as CAD and design tools, parametric architectures, modularization, and flexible manufacturing cells are all well established in the furniture industry. However, in my opinion, very few people made the required connection between the back office and the customer frontend – and established stable processes.

In addition, furniture products have not been part of the recent wave of start-ups in mass customization. Woonio.de from Kempten, Germany, wants to change this. Here I would have been able to get my custom work desk for less than half the price, in a third of the time, and with a much larger selection of materials and styles. Also entirely "Made in Germany" in a very high quality.

Woonio Founder Roland Waedt opened his website earlier this year. Inspired by customization in the fashion industry, he wants to transfer the experience we know from customizing an individual garment to furniture. His company provides the product design, the website and 3D configurator, the brand name and customer service. Production is outsourced to cooperating manufacturers across Europe.

I really liked by the offering, as we saw so many food and t-shirt startups in the last year, but very little in other categories. The configurator is well done and allows one to easily explore the variety (even if I can imagine that some people would like to touch the real wood before buying -- for this, you can order material samples).

I am curious to see how this venture develops, and how people adopt the offering. I believe there are larger hurdles for adaptation for this category, as consumers have no experience in purchasing these products online. For me personally, Woonio came a bit late on the market (I am very happy with the table I finally got), but for our next home, this is something worth considering.

Mass Customization Friday on Facebook at August 6

20 startups in the mass customization space will advertise in a coordinated fashion on Friday (August 6) on Facebook to create awareness for design-your-own and customization.

While mass customization start-ups really are popping up all over the place, there still is rather little awareness about this new trend with the general public. 24 mass customization companies set out to change that! They have united in a great way to make August 6 "Mass Customization Friday" by all purchasing and running Facebook Ads with a "design your own" claim on that day.

The objective is to reach at least 8 Million impressions on Facebooks for the "design your own" trend. The core idea is "conversation not conversion" and to create some buzz and awareness for the customization trend.

Carmen Magar from Chorci USA describes her motivation to participate with er company in this project, "I think it's a great example of a collaboration, a "movement" if you may. Hopefully this will change the way people think about purchasing products and encourage them to co-create and actively look to have an input in the products they consume."

These are the "mass customization" companies participating -- many of these companies met on the MIT Smart Customization Seminar in May for the first time and started to cooperate!

• Blank Label- co-created dress shirts (style the collar, cuff, placket and really make it your own)
  
• chocri- co-created chocolate bars (pick your favorite chocolate base and mix in the toppings you love!)
  
• Spreadshirt- co-created t-shirts, sweaters and hoodies (add graphics or text and get it personalized for you)
  
• LaudiVidni- co-created handbags (for the woman that really knows style and is tired of the monotonous Coach and LV bags)
  
• Gemvara- co-created jewelry (one-of-a-kind gemstone jewelry with 16 different gem varieties and eight precious metal choices)
• Shoes of Prey- co-created women's shoes (style the heel (or no heel), tor, fabric, color andembellishments)
  
• Wagner Skis- co-created skis andsnowboards (uniquely suited to your style, strength, weight and mission profile)
  
• Gemkitty- co-created jewelry (customize semi-precious gemstone jewelry. Choose from seven necklace, five earring styles and hundreds of gemstones)
• Snaptotes- co-created totes (add photos to your bags to further cherish the memories)
• Element Bars- co-created nutrition bars (energy and protein bars with the ingredients you favor)
• YouBars-co-created protein bars, shakes, trail mix, cookies and cereal (mix the ingredients you love and need)
  
• Red Moon Pet Food-co-created pet food (for that particular pet with a special diet or just because your pet deserves more)
  
• Rooms By You-co-created bedding and soft goods (home décor customized on demand)
  
• Lindgolf-co-created golf clubs and bags (golf clubs for performance and looks)
• Artaic-co-created mosaics (build your own art by uploading the photos you love)
• Melboteri-co-created handbags (select the style, components, and color of each handbag)
• Indidenim-co-created jeans (jeans designed with your preferences in mind and made to measure)
• Kidlandia-co-created home decor and puzzles (from dozens of designs, your personalized creations make memorable puzzles, wall décor, and other unique, high-quality gifts)
• Maguba-co-created clogs and women's sandals (style your footwear however you want!)
  
• Personalwine-co-created wines (personalize award winning wines with your unique label)
• Proper Cloth-co-created luxury dress shirts (for the guy that loves Egyptian cashmere and is a luxury buyer)
  
• Design A Tea-co-created tea blends (blend the teas with the proper proportions you prefer and personalize the packaging)
• Selve-co-created women's shoes and boots (choose your style, color, suedes, leather and lining)
  
• Open Runway- co-created women's shoes (still to be launched)

I am curious to see how this is working and what buzz this generates --- at least it got me into blogging again after rather a long break.

Invitation: Let's Meet at Customer Co-Design Event in Munich on July 15

Are you living in the Munich, Germany, area? Then you may be interested in this event on July 15 at the BMW Corporate Headquarters:

Customers as Co-Creators: Implications for theDesign Profession

Organized by Bayern Design, an association of industrial designers in Bavaria, and Hyve AG (an OIA - Full Disclosure: I am on the board of directors of Hyve), this shall become a nice evening event that will allow a good update on co-creation and open innovation with customers, and also will offer nice networking opportunities for the Munich community.

The event is in German language, and so is the following announcement:

Der Kunde als Mitgestalter. Einfluss von Social Media und user-generated Content auf die Gestaltung - 37. Unternehmerforum Design

15. Juli 2010 -- 17 bis 21 Uhr -- BMW Welt, München

Das Web 2.0 bietet Unternehmen ganz neue Möglichkeiten, innovative Produktideen zu generieren. Durch die Zusammenarbeit mit Communities, durch Ideen- und Design-Contests im Internet oder in Workshops mit Lead Usern werden Kunden aufgefordert, sich aktiv an der Produktentwicklung und -gestaltung zu beteiligen und Produkte am Bildschirm zu kreieren, die individuell und einzigartig sind. Doch können Nutzer tatsächlich komplexe Gestaltungsaufgaben übernehmen? Welche Chancen und Risiken liegen in der frühen Kundenintegration? Wie kann effektiv und sinnvoll das große kreative Potential der globalen User genutzt werden? Steht uns ein Paradigmenwechsel in der Produktentwicklung und Kundenbindung bevor?

Antworten auf diese Fragen geben Wissenschaftler, Unternehmer und Gestalter in der BMW Welt in München. Wir laden Sie herzlich ein, aktiv an der Diskussion teilzunehmen. Es sprechen:

• Martin Ertl, Chief Innovation Officer, BOMBARDIER Transportation Deutschland GmbH, Berlin
• Dr. Johann Füller und Michael Schmidt, Vorstand, HYVE AG, München
• Dr. Gregor Matjan, Client Relationship Manager, KISKA GmbH, Salzburg
• Prof. Dr. Frank T. Piller, Direktor des Instituts für Technologie- und Innovationsmanagement an der RWTH Aachen

Teilnahmegebühren: 70 € zzgl. ges. MwSt. (50 € zzgl. MwSt für für Studenten).

Anmeldung ueber dieses Formular:  Download Anmeldung 15_07_2010

Mass Customized Art -- Can Art be Co-Created?

A long time ago, I wrote about some artists that have applied the ideas of mass customization and personalization for their works. Now, a much larger initiative has started. Called A.R.T. (for "Art-ReThought"), Donald Rattner, an artist turned architect, has created a new online shop for customizable modular art. He also recently launched a sophisticated new blog on modular design and architecture.

"Is art still art if the artist’s hand never touched it?" This somehow is the key question Rattner's site asks, and while he definitely has answered it with "Yes", I am not so sure if his offerings really meet the definition of "art" for many people who may call this more "decoration".

But the lines are blurring. And in any case, Rattner perfectly illustrates how digital innovations in manufacturing are impacting art and design. Mass customization, co-creation, modular design, production on demand, digital design, robotics, and other computer-driven technologies are changing the way things are made (and as a result, the way art is thought about).

Rattner calls this mixture “The New Industrialism". "As with so many things in our lives, a lot of the historical attitudes toward the creative disciplines are falling away under the influence of modern technology. For instance, today people are demanding more involvement in the creative experience, whether it’s collaborating in the design of their own clothes or specifying a new computer for purchase. Eventually we’ll see that sensibility infiltrate the art world, which until now has reserved the right to creation to the artist alone." Rattner recently is quoted in a press release. There is a great illustration of the "new" and the "old" art in the catalogue for his customizable items (download).

In his online shop (with a small configurator), he is selling Wall Art, a hanging modular wall sculpture system that comes in square, reticular and rhombus modules and Shelf Art, a simple, expensive but wonderful personalization option for home libraries (I love those!). Nice, fredh idea -- and a further sign of the broad appeal of mass customization.

Context: 

• Donald Rattner's site: http://www.art-rethought.com/blog/
• All previous posts on "Art Customization"

Participate in Company Survey on Mass Customization Practices

REMPLANET is a research initiative, funded by the European Commission, which focuses on achieving resilient supply networks for mass customizing companies. For more information you can visit the Project website http://www.remplanet.eu.

As part of the REMPLANET project a large-scale online-survey has been disseminated to European engineering industrial companies in the mechanical, electrical, electronic, metalworking and metal articles sectors.

The main objective of this survey is to gather information from a representative sample of capital goods manufacturing companies in order to contrast and validate the results of the research with real practices and problems of the sector.

For this reason, you are invited to participate in this survey by providing your knowledge and experience in completing a questionnaire where a set of issues related to the topics addressed in REMPLANET project are examined.

The questionnaire is divided into seven sections and its completion will take app. 20 minutes. Click here to enter to the survey! If you are an European company in the capital goods sector, please participate in the survey and support our research!

Sad News: Bill Mitchell, Co-Director of the MIT SCG, dies at age 65

Very sad news: Our friend and colleague Bill Mitchell, Professor at MIT and one of the co-founders and a very strong supporter and intellectual stimulus of the MIT Smart Customization Group, among many other initiatives, died last Friday, much to early, in the age of 65. 

Bill really influenced my thinking and work on mass customization in many respects. He was among the first to see how mass customization thinking can be applied to much larger systems like homes, infrastructures, electric cars, and especially the city itself. His work on product grammers, sustainability, and personalization extended the methods and approaches of mass customization.  Luckily, he inspired many students and colleagues, so his thoughts and ideas will live and will be used in the future.

Bill also enabled us to host the MCPC 2007 Conference at the MIT Campus and to start the MIT Smart Customization Group as a research group within the Design Lab that Bill founded in the 2000s at MIT.

My thoughts and wishes are with his family and his close colleagues and students at MIT.

Bill, we all really will miss you!

The official obituary is at the MIT Homepage. A memorial service will be held at MIT at the new Media Lab Complex, 75 Amherst Street, Cambridge, MA, on Wednesday, June 16 at 10 a.m.

MCP-AP 2010: Present your work at the MCP Regional Conference in Taipei, Taiwan

The MCPC conference series is the premier event for the international Mass Customization community. Every two years, we organize the large global MCPC conference (the previous event was in Helsinki in 2009, the next one will be in Oct. 2011 in North America). But in the last years, a number of side events has been organized with a topical or regional focus. Since several years, a MCP event is organized for Central Europe, the MCP-CE  (the next conference takes place in Serbia in Sept. 2010, see the call for papers and participation)

In Western Europe, a Dutch MC event is planned by MilkorSugar and Fronteer Strategy for Nov. 2010, and we are also thinking about a new edition of the German MCP event which started already back in 1997.

But before, MCP is getting a new Asian-Pacific outpost with the MCP-AP, MCP-Asia Pacific. The first event of this kind will take place in December 2010 in Taipei, the capital of Taiwan. As a central manufacturing and innovation hub of the world, the Taiwanese economy has been focused since many years on flexible and customer-centric manufacturing strategies. But also in other countries of Asia, the concept of mass customization has been adopted to a large extend. Japan probably is the leading MC country in the world, and also China is rapidly adopting MC methods.

So if you can make it and are interested in networking with the Asian side of mass customization, consider to participate or even present at the MCP-AP.

The event is taking place on Dec. 6 and 7 at the prestigious National Taiwan University of Science and Technology, and will be followed by a business seminar on Dec 8 in Taipei and the opportunities to participate in a study tour to Taiwanese manufacturers at Dec 9. The MCP-AP has an open call for presentations, and next to scholars, especially managers are very much invited to participate and present their MC experiences.

Topics of the Call for Papers include, but are not limited to:

    * MCP Product and Process Design
    * MCP Manufacturing and Logistics
    * MCP Information Systems
    * MCP Communities and Personalization in E-commerce
    * MCP and Services
    * MCP and CRM/Branding
    * MCP Case Studies: Industrial Goods, Consumer Goods, Services
    * MCP for Assistive Devices/Technologies
    * Technology-enabled MCP
    * Strategy-aligned MCP

To participate and present, submit an abstract until June 15, 2010 to the conference organizers.

For more information, head to the conference website: http://mcp.im.ntust.edu.tw . or download the conference flyer and CfP here as a PDF.

MC Alternatives: Hipstery adds a new twist to t-shirt personalization – and Additik pimps your IKEA furniture

I am still finalizing a report about the SCS 2010 (in one word: it was great!), but before, here a posting with some alternatives to mass customization, i.e. business strategies that also build on the fact that people are different, but follow a different model than customizing an item for an individual consumer and fulfilling it with on-demand manufacturing. I recently got notice of two good MC alternatives:

MC Alternative I: Hipstery's match-to-order system

Long-time readers of my blog will remember Adam Fletcher (and everyone interested in t-shirts will know him anyway). We had a wonderful cooperation when he was still working for Spreadshirt and directed the OpenLogo contest (and before, when he was writing his master's thesis on a very educated comparison of customization of shirts and Threadless' crowdsourcing model).

After some time travelling, Adam came back and opened Hipstery.com, a small venture that is very anti-customization in a way, but also somehow very pro-personalization in another.

His idea: Head to his nice retro-design website, answer a brief questionnaire on the net, and his magic algorithm (his stomach, I suppose) will pick exactly the graphic t-shirt that is right for you. He wants to take away the burden of choice (in a standard t-shirt shop) or the burden of co-creation (on a mass customization site) and to substitute it with a short survey on your needs.

I participated and got a really nice shirt I like. Calling this model "consumerism criticism", as the German weekly DER SPIEGEL did, is probably wrong. On the contrary, it is a very nice business model: Adam get's the overstock from nice t-shirt companies, adds the personalization magic and a very well done, very humorous and nice shopping process, and creates a great customer experience – and sells the shirts at a premium.

A similar (if more technical) personalization system (also called: "match-to-order" or "virtual build-to-order) employs Zafu (jeans). Also in the case of Dell Computers, it has been shown that such a need-based personalization is superior to parameter-based configuration: Instead of picking your hard-disk model and process speed, the system just asks you which software you want to run and what is your price range, and then automatically suggests you the best fitting product.

This kind of recommendation systems is a growing species on the internet, and when well done, it also can provide a great alternative to "hard" mass customization, i.e. mass customization that requires a flexible manufacturing system for fulfillment. In many industries, the existing assortment is large enough to fulfill each individual's need. The problem is just to find the right item – and to know on the first hand what the right item is. Here Adam comes in place!

MC Alternatives (II): Additik tunes your IKEA furniture

A long time ago, I wrote about Bemz, a Swedish shop that offers its customers to tune ("pimp") their IKEA standard sofas with customized covers. It is a great idea, using the de-facto standard of IKEA and adding some personal touch. In the meantime, an entire industry of IKEA improvements came to the market.

A new player is Additik from France who offers stickers for IKEA furniture. While the basic idea is good, the design quality (in my subjective opinion) does not matches Bemz' sophisticated Scandinavian design. Another nice alternative to traditional mass customization.More on the business model in my older posting.

So while mass customization in form of "co-creation" and "build to order" still is growing rapidly, we will see more alternative models that also want to profit from heterogeneity in the customer domain.

Lessons for Start-Ups in Mass Customization, As Told by Blank Label to The New York Times

This week, The New York Times had a very nice documentation by Amy Wallace about Fan Bi from Blank Label, a Shanghai and Boston based mass customization entrepreneur in the apparel industry. While there are so many custom men's shirts site on the web already (next to t-shirts the most crowded category, as our Customization500 study has shown), Blank Label has found a place in this category.

The article very neatly summarizes some of the motivations and key learnings I have heard often from MC Entrepreneurs:

(1) Set up operations first: Blank Label shirts are sewn to customers’ specifications and delivered anywhere in the world in about four weeks from Shanghai. Before opening the business, he really invested in setting operations up, and also travels personally to the factory to oversee manufacturing (indeed, it seems from the website that in the moment he is living in the factory). This is, in my experience, a key success factor of mass customization start-ups: Focus on getting the stuff produced, not just sold! And this also at times, when the business picks up and you have to scale it.

(2) Start very lean: "We’ve focused on being very bootstrap, very lean," says Fan Bi in the NYT article. This is important to finance a slow start: In the article, he says his business has sold about 450 shirts. Recently, it has seen a big bump in traffic, with orders of about 10 shirts a day. He says the company makes money on every shirt – but at $50 a piece, you need to sell a lot to really make a decent income.

(3) Focus on the the emotional value proposition: "how expressive something is": Fan Bi learned:
"People really like a Blank Label shirt because they can say, ‘I had a part in creating this". On the blank label website, this is called the "Co-Creation Custom Revolution" (just another fancy synonym for mass customization).

(4) Don't trust in venture capital: They first tried to get outside investments, but did not succeed. "To be honest, we couldn’t," Mr. Bi is quoted in the article "We were two very young guys who had no track record." So Fan Bi financed the site with about $10,000 in savings. But even if you have a track record, in my experience it is very difficult to attract venture capital to a manufacturing-based product business. So focus on other sources or private funds. And stay lean (see above).

(5) Be very customer centric: Communicate directly with customers is a number one goal at Blank Label. This sounds obvious, but is not: Only about 25% o all mass customization companies on the web offer direct customer support. Depending on the time of day, Fan Bi answers customers' calls himself.  And the article reveals another very good practice: "When he is awake, he also activates a feature that sends instant messages to customers who have been on the site for more than 90 seconds. Need help?, he asks. For several hours a day, he and his partners chat with customers about what they like and don’t like on the site.

Other success factors I would add which were not covered in the article:

• Get the market positioning right. What is the differentiation of your product ? (hint: just that fact that it can be customized is it not).
   .
• Make a great web-interface that is easy to use and represents your final product. We now have so much academic research about mass customization configurators. Put it in practice!
   .
• Think about a clever brand name that really sticks. While the majority of mass customization sites have a "my", "personal", or "custom" in their brand names, all category leader have not.

Read the full article here, or come to the MIT Smart Customization Seminar to meet 100 other entrepreneurs and managers doing mass customization!

Nice SIEMENS Report About Open Innovation

"Pictures of the Future" is the corporate magazine of Siemens AG, Germany's largest technology company. The magazine reports several times a year about technological advancements, publishes trend studies and outlooks, both with regard to Siemens applications and beyond. The recent issue (Spring 2010) has, among other themes, a very comprehensive special report about open innovation.

It follows a broad understanding of the term and provides an excellent overview of this field from the perspective of a large corporation.

Here is the section on open innovation as an extract. For the entire issue and a German translation, go here:

• English Siemens Pictures of the Future Spring 2010, "Open Innovation"
• Deutsch Siemens Pictures of the Future, Frühjahr 2010, "Open Innovation"

Meet 100+ CEOs of Mass Customization Companies and VPs Customization & Personalization of Global Organizations at the MIT SCS 2010

We are finalizing the preparations of the MIT Smart Customization Seminar 2010 -- only one week to go! And I am really excited -- it will become a great event. I just checked the registration database and was amazed about the prominent participant rooster we will get. Indeed – many of the participants could be keynote speakers on other conferences as they really represent the state of the art of innovative business thinking today.

Also the final speaker line-up is terrific, and I am looking forward to learn a lot from our presenters. The final agenda has been published … just the session of the MIT research briefings on Day 2 will be further fine-tuned. And Zazzle will come up with another surprise!

The deadline for online registration for the event has passed, but if you still want to participate, please send me an e-mail (piller@iimcp.org) and I will take care that all readers of my blog will get a seat at the event.