Mass Customization & Open Innovation News

Brand Value and Open Innovation: Companies open for customer input are more popular, study finds

The connection between open innovation and branding has been explored in a few studies recently. The best probably is Johann Füller and Eric von Hippel's study on brand creation by users in the outdoor community "Outdoorseiten" (see the short summary in MIT Sloan Management Review).

In their study, Johann and Eric surveyed members of Outdoorseiten.Net (ODS), a community of German, Austrian and Swiss hikers, about their brand preferences — and found that ODS members showed significant interest in buying hiking products with the community’s ODS logo. For example, when community members were asked whether they would prefer to buy a backpack from their favorite commercial manufacturer or one that was of equal quality and price but instead had the ODS logo, slightly more than one-third preferred the ODS product, and an additional 17.7% viewed the two brands as equally attractive. User communities seem to have the potential to create strong brands at low cost. Such user-generated brands, they suggest, can represent potential competition for traditional brands — but they may also present opportunities for co-branding and collaboration.

This is where a new study by Fronteer Strategy starts, a Dutch consultancy on co-creation. Together with a market research firm, they looked on the impact of openness of a company on brand value. While not a scientific study with a very sophisticated measurement instrument, the study still is interesting.

Among some big consumer brands in the Netherlands, coffee brand Douwe Egberts, supermarket chain Albert Heijn and Rabobank are considered to be the most "accessible brands."  Accessible brands are open for comment, opinion and contribution of customers. Sometimes, customers are even integrated as a partner in the innovation process.

While more a definition of "customer centricity" and not "openness", the study still is interesting. The more accessible a brand, the more it is perceived as "attractive" and "innovative".  This study shows the impact of a new significant factor: accessibility. It calls for an intelligent and relevant use of input from a firm's periphery.

The finding of this research: "openness" (horizontal axis) and "brand popularity" (vertical axis) are highly correlated.

But there is plenty of work to be done on developing better scales and research instruments. For example, according to this study, Nokia, Samsung and Apple are competing for the best position in the electronics sector. But Apple, for example, is known as a counterexample of open innovation: Apple does not connect with its customers, it is not doing any open innovation with regard to customer input, and it is just dictating consumers how to use its products.

So the real conclusion may be vice versa: The more attractive a brand, the more "open" is its appeal ... even if it is a closed shop. More research definitely is needed here.

Context:  Use Google to translate the Fronteer study into English.

"Niching the niche": Observations from my visit at Zazzle's Silicon Valley HQs

How Zazzle is still growing with mass customization despite -- or just because of -- the economic downturn … and ten other facts that make this platform special

I recently had the opportunity to pay Zazzle an extended visit at their Silicon Valley Headquarters. Here is what I learned during this day:

Zazzle was founded by Bobby and Jeff Beaver as students at Stanford University. The unfulfilled need of a user again was the mother of invention: The two brothers wanted to create a cool t-shirt to advertise a party at their fraternity (in order to "draw in plenty of nice girls"). They realized how difficult it was at that time to get high-quality custom t-shirts without having to order larger quantities at a promotions company or to rely on the low quality of heat-transfer at the local copy store. Well, it didn't work out with the girls at that party, but the rest is history:

Since Zazzle's launch in 2003, its focus always has been on technology. It started with unique digital custom printing technologies that allowed the founders to really get high quality products out at a not known quality (at this time). Today, in every presentation Zazzle stresses the fact that being leading edge in technology is what makes them special.

It may be the proximity to the many technology companies in their area that keeps them emphasizing the technology part – but I do not see Zazzle as a technology company – they are a "market maker". In my opinion, their core capability is to create new markets for products that before could not be exploited in any way.

Sheryl Graham called this "Niching the niche". Sheryl is a Zazzle Proseller, making her living by creating products on the Zazzle platform and selling them to others (http://www.zazzle.com/sagart1952) -- most of them appealing just to a very small audience that traditional companies neither can recognize nor capture.

Starting from the scratch without any ballast or old knowledge or constraints, Zazzle created a mass customization ecosystem that has a number of unique features. Here are my ten points that make Zazzle special:

1.    Niching the niches: The unique vale proposition of Zazzle comes from utilizing the broadest possible scope of needs. Each day, about 50K new products are being created, most addressing a very tiny demand – but in total, this sums up. This also allows them to operate with almost no clear definition of target groups or target customer segments: While the "soccer mom" is the single largest customer of Zazzle, it is by far not its majority. The platform is build to cater to all different groups and clients.

2.    Event driven Marketing: The broad scope of users at Zazzle drives a lot of event-driven business beyond the traditional seasons. There is not just the wedding-season, but their has been Obama-Season, Client-#9-Season, Tax-Day-Season and so on … The core business driver is to enable (local) users with some very specific domain expertise to create products immediately for/after a special event in this domain.

3.    24-hour turnaround for most orders: While most mass customizers need weeks to fulfill an order, Zazzle very early realized that being able to process an order in 24 hours opens many more markets (think of the entire last-minute gift market).

4.    Modular manufacturing system: Their manufacturing system (in San Jose, CA) is build highly automated so that it can balance large spikes in demand without accumulating too high cost. In addition, a highly flexible work force allows to cover different demand cycles.

5.    Real-time rendering and focus on user experience: Zazzle has some impressive rendering capabilities that allow the website to create any product in any specification in very high quality virtualization in real-time. While many other mass customizers still work with pre-fabricated pictures, here everything is rendered just on the spot.

This also enables another signature feature: Showcasing all products in different settings: Most products can be virtually placed on many different models. Zazzle realized that not all designs fit to same style of mannequin. This also caters to the broad scope of clients that utilize the Zazzle platform.

Or consider the "stitching simulation videos" when you choose custom embroidery. This allows the user to see how detailed the self-created pictures will be produced – also contributing to the user experience and quality perception of pro-users of the site.

6.    Allowing clients to focus: Strong focus on creating a flexible platform for different kinds of relationships with different vendors. Their theme: "How to allow our clients to specialize on what they are really good at, and still sell an integrated offering at the same time". So, a traditional company like Pittney Bowes (zazzle.pb.com) can create its own custom goods offering on the same platform as a very design-driven initiative like artsprojekt.com. Compare the sites: They look extremely different, but are based on the same platform and fulfillment system.

7.    Relationships with brands: Zazzle has build some very strong relationships with brands like Disney and the Star Wars Enterprise that allowed these companies to go beyond merchandising and offer real "fan-based content".

8.    Openness and opportunity-driven growth: Zazzle created a platform that is flexible enough (with the help of their great engineers) so that vendors can come in and get (almost) any product they would like to offer customized.  There is no general restriction for new products. New assortment creation is driven by the clients and users.

9.    Generating customer knowledge: Zazzle enables brands and established companies to use Zazzle as a platform for experimentation and testing that even makes money. Disney used Zazzle to allow customization of products with the characters of the movie "Cars", and their large retail clients used the popularity of characters selected by Zazzle users to predict the number of merchandises products in large scale. Creating these aggregated customer knowledge became a large benefit for Disney.

10.    Growing strongly despite the present economic downturn: Although Zazzle realizes the slower economy, they still grow with high double digit figures. Corporate clients use the on-demand opportunities in these times as a more efficient way to create special assortments compared to building large inventories. And consumers that postpone shopping for high-priced items still use the affordable Zazzle products to get a high-touch emotional products ("if I cannot afford the diamond ring for my girlfriend right now, I still can give her a great custom made t-shirt as an emotional gift").

But Zazzle also has to focus on a number of challenges:

• Create a site and corporate image that appeals to many different stakeholders, from brand managers at Disney to freelance independent designers in the Gothic Scene, all using the same platform to distribute their products.
• Manage client conflicts: Zazzle enables its corporate clients to extend their assortment into the custom product line, but at the same time, Zazzle also creates competing assortments by other vendors in the same category. This can lead to channel conflict.
• Educate their customers: Being ahead in technology and mass-customization-thinking, Zazzle has to educate it different kinds of users what it is able to do – and what they are able to do with Zazzle.
• To keep technology leadership, continuous investments in the technology platform is required, also including more and more complex integration of new technologies into the current platform.
• How to grow really big: While Zazzle had remarkable growth in the past, it still has to become the Google of products. What is their strategy to put all the existing amazing technologies and market knowledge together and to create really scalable growth beyond the niches?

So I think we should stay tuned what Zazzle (and their equally strong competitors like Cafepress and Spreadshirt) are turning out in the next months … these are some of the most interesting players in the mass customization market out there in the moment.

Context: Zazzle Blog

Prosumer Revisited - A Brief Conference Report and Links to Summaries of Most Talks

Update: In case you speak German, there is a great comprehensive summary of the event here: "Ich bin ein Prosumer - Brigitte Holzhauer berichtet von der Tagung "Prosumer Revisited" in the Magazin Change X."

This week, at the Goethe University in Frankfurt/M, Germany, an interesting conference took place. Organized by Birgit Blättel-Mink and Kai-Uwe Hellmann, two professors of sociology, the event wanted to review the long school of academic thought on prosumers and co-creating customers. The organizers gathered a diverse and interesting crowd of participants that provided insight from many different perspectives. Overall, it was an interesting event, even when I realized that in sociology, the majority of scholars still focused on mapping that the phenomenon of co-creation or prosuming customers exists, while in the management literature, the state of the discussion has moved one step forward in explaining the structures, methods, and contingencies of user participation in value creation.

Axel Brun, a scholar from Australia who participated in the conference, has written a very comprehensive report, summarizing all keynotes and many of the paper presentation in his blog. Axel is a Senior Lecturer in the Creative Industries Faculty at Queensland University of Technology in Brisbane. He has coined the term "produsage" to better describe the current paradigm shift towards user-led forms of collaborative content creation which are proving to have an increasing impact on media, economy, law, social practices, and democracy itself. For more information, have a look at his website, http://snurb.info.

Here are a few direct links to Axel's summaries of the conference keynote presentations:

• My opening keynote of the conference: http://snurb.info/node/970. This is a nice summary of parts of the talk and of my basic argument why user participation in the innovation process is important: to get access to sticky need information of customers.
• Holm Friebe, co-author of my favorite book "Marke Eigenbau". The book is a great summary of all topics I am writing about in this blog, and so was Holm's presentation: http://snurb.info/node/973
  
  
• Kerstin Rieder is the co-author of a rather critical book on the "working customer", that, when it appeared in 2006, seemed to me like a critical and pessimistic review of the self-service society. Missing many of the more recent developments of voluntarily co-creating customers- So I was glad to hear that in her talk, Ms. Rieder did extend the concept and also focused on the opportunities and advantages of co-creation for firms and, equally, customers: http://snurb.info/node/980
  
  
• Johann Füller from Hyve talked about the creation of brands by users. I have heard this talk before, but it again was fascinating to see how user-created brands challenge the marketing thinking of many decades: http://snurb.info/node/977
  
  
• The honorary keynote speaker of the conference was the famous sociologist and scholar of cultural studies, George Ritzer from the University of Maryland. He provided a nice historical overview of the prosuming customer, but -- as most speakers at the conference -- stopped when it got interesting, i.e. when new forms of co-creation emerge. But overall, it was a great experience to listen to Prof. Ritzer live: http://snurb.info/node/976

For summaries of many more talks, go to http://snurb.info/taxonomy/term/104

Interview: The Next Generation of Architectural Design: Daniel Smithwick from Physical Design Co on a great way to build the garden house of your dream … and much more

Daniel Smithwick is the co-founder and CEO of Physical Design Co., a Cambridge, MA, startup that wants to start a revolution in building structures. His vision: To empower every consumer to transform nearly any custom design into easily assembled physical structures delivered to your backyard! This could be your next garden house project. Before, you either had to purchase an expensive standard house at Home Depot that was not only labor intensive to assemble, but often ugly and not fitting exactly your requirements. Or you could get your hands dirty and start a complicated DIY project, constructing it with 2x4s and nails. As a last alternative, you could hire a contractor to build you your dream house … but this comes with a heavy price tag and often delays of the construction crew.

Daniel wants to offer another alternative: You design your dream in SketchUp, the free CAD software by Google, and his company will translate your uploaded design in a custom kit of interlocking CNC-cut parts that you can then easily assemble after delivery. His promise: "With Physical Design Co Web Platform anyone can design, remotely manage production, and assemble their own full-scale inhabitable creations!"

In an interview, Daniel shared more information about his project and company and what he regards as the future of mass customization.

Daniel Smithwick is an architectural designer by training and he is currently a graduate researcher at MIT where he is a member of the Smart Customization Group and the Digital Design and Fabrication Group.  Daniel co-lead the latest research project by the Digital Design and Fabrication Group called, “Digitally Fabricated Housing for New Orleans,” a project commissioned by and exhibited at the MoMA in New York for their 2008 show, Home Delivery, Fabricating the Modern Dwelling.  Before coming to MIT, Daniel worked professionally as a designer for leading architecture and design firms including: Pompei Architectural Design in NYC, Loom Architects in Minneapolis, MN, and Howeler + Yoon Architecture in Boston.

FTP: Daniel, what is the idea behind your startup, Physical Design Co?

DS: The central idea behind Physical Design Co. is to provide consumers with easy-to-use online tools that engage them in the design and manufacturing process and enables them to become the producers of their own architectural-scale designs.  Our web platform also allows consumers to utilize local manufacturing via our distributed fabrication network which not only reduces carbon emissions, but it also strengthens local economies.  Essentially, we’re re-thinking how our built environment is designed and constructed – with the Physical Design Co, online users, whether they live in rural China, or they are busy professionals interested in design, they can now play an active and participatory role in the built world around them.  

Through our web platform, anyone can upload and transform their digital design – any inhabitable accessory structure, from doghouses to backyard art studios - into a customized kit of interlocking parts that are locally manufactured and that can be easily assembled.  Consumers no longer need to rely on the traditional labor-intensive and wasteful construction process: with the Physical Design Co all you need is a rubber mallet to assemble your creation.

FTP: How is this different to existing companies in the field like Ponoko, Replicator or Shapeways?

DS: The Physical Design Co distinguishes itself in two ways. First, we provide consumers with the ability to custom design, and have fabricated, life-size and inhabitable scale structures, as opposed to only hand-held items like fashion accessories and table-top objects.  We’re interested in offering consumers more than just personalization; our web platform engages the consumer in the design, manufacturing and delivery process – giving them the tools to make smarter decisions about how they impact the built and natural environment.

Second, we have developed a patent-pending technology which automatically translates the user’s design into a unique kit of interlocking, easy-to-assemble parts.  For example, let’s say you wanted to design a backyard shed.  Instead of having to digitally model all of the individual parts, consider how they all attached together, worry about the structural integrity and verify that it is indeed possible to put it all together, with the Physical Design Co., all you have to do is model the shape of your design.  Our technology automatically and digitally translates the design shape into a kit-of-parts that can then be CNC fabricated and subsequently interlock together without the need for nails, screws or any additional hardware.  

FTP: Dan, you recently presented your company and some creations at the Maker Faire of MAKE magazine, a large gathering of hardware hackers and DIY enthusiasts in Austin, TX. Can tell us some more about this exhibition and the feedback you received?

DS: In October of 2008 the Physical Design Co., in collaboration with ShopBot Tools (an innovative manufacturer of user-friendly CNC machines) designed, fabricated and exhibited the ‘Austin Shed’ for the Maker Faire in Austin, TX.  This is the world’s first digitally fabricated shed.

The feedback we received from the Maker Faire attendees was incredible.  Most were simply amazed at how structurally strong the shed was without any nails, screws or hardware holding it together.  However, the most rewarding feedback we received was from children.  At the faire, we pulled a few of the ‘skin’ panels off to reveal the grid structure of the interlocking ribs so that visitors could understand how it was assembled.  What surprised us was that 10 year-old kids would pick up the removed parts and correctly replace them back on the shed without any knowledge of how the system worked.  We were delighted to find that our assembly process is intuitive enough that children could put it together!

FTP: How do you master the manufacturing process; who are your cooperation partners?

DS: The great thing about the Physical Design Co and our manufacturing process is that we don’t need to build any new large and energy-inefficient factories to produce our users’ designs.  In fact, the manufacturing infrastructure already exists worldwide – it’s the tens of thousands of individual CNC owners around the world whose machines are online.  These are our cooperation partners.

Through our web platform, these CNC owners become members of our distributed manufacturing network through which they can promote their existing and on-going services.  This is how we enable the users and designers on our web platform to have their structures locally manufactured - which greatly reduces delivery costs both in terms of money and energy use. 

FTP: What are the next steps for your company, and how do you expect to grow it in the coming months?

DS: This summer, in collaboration with ShopBot Tools, Make Magazine and Google SketchUp we’re hosting a competition called the Get Physical! Design Competition which will take place at the Maker Faire in San Mateo, CA.  The top 3 winners will have their designs digitally fabricated using our web platform, assembled and showcased at the upcoming Maker Faire.  Keep an eye on our blog for more details over the next couple of months.

FTP: What are other trends you see with regard to mass customization?

DS: When answering this question I like to quote Eric von Hippel from his book, Democratizing Innovation:

“When the cost of high-quality resources for design and prototyping becomes very low, these resources can be diffused widely, and the allocation problem diminishes in significance.  The net result is and will be to democratize the opportunity to create.”

I think we’ll continue to see an increase in user-engagement not only in the design process but also in the production process of our built environment as the availability of digital fabrication equipment exponentially grows.  In addition I think we’re just beginning to understand the power of online user communities and crowd-sourcing.  Rather than just offering product mass customization to isolated individual users, we are starting to see that by enabling them to interact with each other through a web platform, their collective intelligence is boundless.

For more information, contact Daniel at dan@physicaldesignco.com
http://www.physicaldesignco.com/
http://www.physicaldesignco.com/blog/

New toolkit for 3D printing: Turn digital pictures into 3D art

I previously reported several times about Shapeways, a spinn-off from the Lifestyle Incubator of Royal Philips Electronics, located in Eindhoven, Netherlands. The company provides 3D-printing capabilities to everyone.

Part of their mission is to provide users a set of toolkits that allow also the average consumer to create 3D objects without any CAD or programming skills. Today, Shapeways has introduced their so called "Photoshaper", a service that allows anyone to turn digital photographs into 3D printed objects.

Users can logon to Shapeways.com, upload any photo and order their creations directly from Shapeways. Now you not only can see your girl friend in your wallet when you are on a business trip, but touch her in 3D!

“Shapeways really makes 3D creation fun, easy and available for everyone,” commented Peter Weijmarshausen, CEO of Shapeways is quoted in a press release. “With Photoshaper we have empowered the average consumer to tap into technologies that used to be out of reach. In doing so Shapeways redefines online consumerism with direct access to unique and individually customized products that were never available before.”

Based on the contrast of the picture (light and dark) the Shapeways Photoshaper automatically creates a depth-layered 3D object that can be printed by Shapeways with the latest in 3D printing technology (I believe with a little bit of photoshopping before uploading the pictures, results can be improved a lot). The 3D photo will be produced and delivered globally within 10 days and costs between $40-50 (USD), including shipping. For best results. use a 1.5 megapixel or better picture. The size of the 3D photo is 13cm to 9cm (5.11” to 3.5”) landscape and portrait.

Context:

• Shapeways Photoshaper is available at: http://www.shapeways.com/creator/photoshaper
• Previous report about Shapeways: 3D Merchandising Platform

Angel Yourself - Print Yourself in 3D This (Well, Next) Christmas

Yes, this posting is late, too late. It may have saved your day and really provided you with the ultimate Christmas surprise. But I messed this up and posted this much too late. Sorry! However, just imagine a world (comimg soon) where everyone has a 3D printer at their home. Then you actually could DO this now in time for Christmas Eve what now you only can do for the next year ....

 Anyhow, this is what you could have done in time for this Christmas:

Tons of goods are being personalized this Christmas. While there are many companies do personalized gifts, JuJups is taking this to the extreme – a personalized gift of the person itself! JuJups, a Singapore based user manufacturing workshop, launched a new "Print your self into an angel" product. On their website, you can upload your portrait photo of your family and friends (and even yourself) which then be printed as cute figurine ornament.  JuJups' on demand figurine ornaments are made as you order with special 3D printing technology. Currently JuJups has an Angel, Santa and Elf figurine.

JuJups is a rapidly growing online co-creation platform that connects prosumers, content owners and manufacturing companies globally, to serve customers locally. JuJups is owned and operated by Genometri. Genometri is a Design Technology Company based in Singapore focusing on building tools for co-creation. It is funded by NVS and SPRING Singapore.

Context: In Germany, fabidoo is offering a similar service.

DemandMade launches YERZIES.com, extending apparel customization beyond screen printing by providing users access to advanced manufacturing methods

News from DemandMade and Scott Killian. Scott, together with his business partner Tim Brule, launched Yerzies.com, an online marketplace that "allows anyone to create, purchase or sell their own customized tee shirts, hoodies and other apparel items."  

Sounds familiar? Yes, Zazzle, Spreadshirt, Cafepress, any many more offer the same. But the differences are in the detail.  

Asked how Yerzies is different, Scott answers: "Although other Websites exist that allow you to design a tee shirt, we've dramatically expanded the variety of creative options and developed new approaches to the way users can profit from their creations."

Read an interview with Scott Killian in the next posting in this blog!

Beyond printed tee shirts, Yerzies enables the creation of stitched sweatshirts and mixed-media designs that include many advanced processes to create apparel which more closely resembles the design trends seen at retail. Yerzies' innovative product configurator allows users to access an unprecedented array of creative options including printing on dark garments, metallic foils, flocks, glitters, glow-in-the-dark materials, and stitched processes.

Buyers are also invited to "Make it Yerz", a feature that allows users to mix and match product options and in some cases, even make modifications to the content created by other users. Yerzies has also reengineered the way user-generated content is marketed.

When users are finished, they can purchase as little as one piece or sell their creations to the Yerzies community and keep the profits. All products are produced on-demand.

Yerzies thus combines advanced new manufacturing techniques with an innovative approach to crowd sourcing. It is another example of the developing trend of user manufacturing and my hypothesis that users are getting more and more advanced manufacturing technology in their hands.

In addition to providing a platform for user-generated content, Yerzies has also licensed content from third-parties including typefaces from designers such as Ray Larabie which users can incorporate into their designs.

Scott: "Helvetica and Times Roman might work nicely for writing a novel, but they don't necessarily look great on a hooded sweatshirt. We've licensed trend-right typefaces that will actually look cool on a tee shirt or hoodie."

The story behind Yerzies: An interview with Scott Killian.

Interview: Scott Killian, Co-Founder of Yerzies, DemandMade, and FanBuz

An interview with US mass customization veteran Scott Killian on what are his objectives with Yerzies (see previous posting) and what he sees next.

Scott Killian has been advising and operating successful e-commerce companies for 10 years — most notably as Chairman & CEO of FanBuzz, a leading e-commerce outsourcing and fulfillment company. Killian co-founded mass customization site FanBuzz in 1996. In 2000, Killian raised the first of two private equity rounds for the company totaling $10 million. Scott has been a long-time advocate for the use of mass customization to better understand consumer preferences, reduce inventory, improve assortment flexibility, and enhance the overall brand experience for consumer products. His insights have been featured in such national publications as USA Today, The Wall Street Journal and CBS Marketwatch.

Frank Piller: What is the idea behind your new venture, Yerzies?

Scott Killian: We began about three years ago with DemandMade, a software platform that helps manufacturers adapt their production processes to support units of one and online retailers to effectively communicate with these factories. As the network of manufacturers using our platform grew, a consumer-facing opportunity of our own began to emerge.

Retailers were taking advantage of the platform, but most of them lacked the expertise in product development they needed to really get the most out of the manufacturing options we made available to them. Yerzies effectively places the capabilities and the limitations of these factories into the hands of ordinary people. We've begun with apparel, but we will be adding more product categories soon.

Not only is Yerzies a platform for user-generated content, we're also entering into licensing relationships with a diverse group of brands that will allow us to offer a "long tail" assortment of designs and intellectual property from movies, television, lifestyle properties and consumer products companies. Customers will have the option to purchase or customize products bearing these trademarks.

Finally, we're also providing many of these same tools to other retailers and content properties who wish to offer products that are made on demand. For example, a major consumer brand is using DemandMade this holiday season to launch an entire apparel program which will be produced on demand in our factories.

FP: But your roots in mass customization are much older. You are a co- founder of FanBuzz, a large provider of customized sports apparel, started in 1996 as one of the first BtoC mass customization operations in the US. Later, you started DemandMade as a BtoB enabler of mass customization. How did you incorporate your experiences from FanBuzz and DemandMade into Yerzies?

SK: After we sold FanBuzz in 2002, I began providing advisory services to online retailers and consumer products companies, including several projects involving mass customization. DemandMade started in early 2005 and is now the parent company to Yerzies. All of these experiences required us to "get our hands dirty" along the entire length of the value chain and I think that was a tremendous advantage for us over somebody just getting into this business. We learned a great deal about licensing, how to connect the manufacturing processes with the end consumer, the danger of burdening users with too many choices, how to scale these programs, etc...

What's really interesting about Yerzies is that the entire business began with a three-year investment in the back office. When it came time for us to develop a consumer-facing application, we were able to do it on a strong foundation. Despite our interest in concepts and processes, we have strong roots in retail so we're really here to create merchandising programs that capture the hearts and minds of end consumers. This is always our first priority.

FP: What are future steps planned for Yerzies?

SK: We're just getting out of the gate right now so our immediate focus is on attracting an initial audience of users. In the coming months we'll be announcing some interesting twists to our business model which will help us draw an even larger mainstream audience, but we're satisfied for the moment to operate in beta mode while we whittle away bugs and garner feedback from early adopters. In the meantime, watch for a huge increase in the number of licensed properties. We've signed many that we haven't announced yet and we're currently in active discussions with many more. We'll also be expanding the array of embellishment options in Q1 of 2009. Despite the launch of Yerzies, DemandMade continues to support other retailers who are launching programs. We will be announcing several of these before the 2008/09 holiday season.

FP: More general, what are recent trends you see with regard to mass customization?

SK: If the first wave of innovation we saw online was about letting users create or configure a customized item, then the second wave is clearly about the intersection of social networking and mass customization. Although Etsy.com isn't a mass customizer, they have proven that users are not content to merely sell the items they've created, they want affirmation and interaction with other users. Since eBay has long dominated the online auction world, conventional wisdom would suggest that a start-up like Etsy would have no chance at success, but they provided a sense of community and a platform that respected the handmade items these folks were creating and that was perhaps more important to these users than the size of the audience.

If I've seen a trend, it's the recognition that these communities will be important to the long-term success Iof many mass customization programs. Ponoko and Red Bubble are two really interesting examples of this at work.

FP: What would be your main advice for a manager who wants to lead a mass customization implementation?

SK: In larger organizations, the development and execution of these programs often requires a diverse group of departments to coordinate their responsibilities. As you can imagine, getting folks from engineering, product development, legal, marketing, creative and operations to huddle around an entirely new concept they may not completely understand (or even believe in) is a major task. My advice to someone trying to develop a program like this within a major company is to make sure they have support at the highest level within the organization - they'll probably need it.

Regardless of the program size, unless the brand has some other strategic objective, most of these programs are still retail businesses at their core. As such, it should always start with the customer. I've been involved in the planning and execution of many mass customization programs, including some for major consumer products brands and I think it's very easy for management to project its own preferences or assumptions onto these projects without first identifying and understanding the customer. People create, modify and personalize products for many different reasons. Although it might be impossible to address all of them, I think it's critically important to understand what customers really want before investing in the idea.

Personal Fabrication for Dummies -- Teaching Videos at Replicator, Inc.

I just discovered the great new blog by Joseph Flaherty, founder of a start-up called Replicator, Inc. While the company will launch in full speed in February 2009, they already were quite successful in securing seed money and attention in a number of important start-up competitions (MIT 100K  (semi-finals), Princeton (semi-finals), and the Rhode Island Business Plan Competition (runner up prize winner)).

I hope that we can meet Joseph at the MIT Smart Customization Seminar in three weeks.

Replicator, Inc., manufactures and sells custom consumer products. Their first product is custom jewelry for tween and teenage girls, sold under the name WhirlyBelle. This is made possible by combining web-based design tools with custom manufacturing

His company blog not just has a recent posting about 47 words you can not use on custom Nike sneakers (which I do not quote here to get my blog not banned from your corporate content filter). In another posting, he has a great chart about the price premiums you can gain with mass customization:

A great number of postings covers user manufacturing and the new opportunities for users to produce anything they want. In one of my favorite posts, Joseph explains all technologies that enable personal fabrication. You probably also could Google those, but Joseph created a great posting with small videos explaining all technologies.

Many people think 3D printers are the way this will happen, but there are half a dozen other amazing technologies that allow people to make anything they can imagine.

While by no means an exhaustive list, his list is a is a very convenient overview for anyone interested in how the idea user co-design meets manufacturing. As Joseph writes:

"Combined with web-based design tools these technologies could enable a change as profound as the industrial revolution: increasing the options for customers while reducing the environmental impact."

His posting shows examples of these machines in action and provides a glimpse of what is possible already today:

1. 3D Printers (some notable examples: Z Corp., Dimension, 3d systems, Objet, Desktop Factory, Paragon Lake, Figure Prints, EOS)

2. Laser Cutters  (Notable Examples: Epilog, Trotec, Etchstar, Ponoko, VersaLaser)

3. Waterjet Cutters (Notable Examples: OMAX, Flow Corp, OCC)

4. 2D Plotter Cutters (Notable Examples: Cricut, CraftRobo, Xyron)

5. Print on Demand (Notable Companies: Blurb, Lulu, Shutterfly)

6. Direct To Garment Printing (Notable Companies: Cafe Press, Zazzle, Spreadshirt, Spoonflower)

7. CNC Milling (Notable Examples: eMachine Shop, Tech Shop, Craftsman Compucarve)

8. CNC Embroidery (Notable Examples: Singer, Brother, Toyota)

9. Cut & Sew Construction (Notable Examples: NIKEiD, Timbuk2, Freitag)

10. 3D Scanning (Notable Examples: Z Corp., Next Engine, 3D Digital Corp., Corpus-e)

Go to his web site to watch all videos

The next generation of user design: Forget about CAD, just handdraw your design, and Ponoko will make it

While this may be small step for mankind, it is a large step for user co-design and customization. Until today, users who wanted to get a custom product had to be able to use at least an online configurator, or, in case they wanted larger freedom of creation as offered by user manufacturing sites like Ponoko, eMachineshop, Shapeways, Fabidoo, or others, they had to be able to use some graphik design software.

Now Ponoko makes co-designing even more intuitive and easier. The crew today launched their service Photomake. It turns digital photos of hand drawings into real products simply by uploading them to the Ponoko website.

The company is again one step further to its mission of making "it super simple for anyone to make anything that is on their mind, at low cost."

Previously at Techcrunch40, Ponoko launched Designmake for designers to make things on demand – over 10,000 have signed up. Earlier this year, they also launched Ponoko ID for shoppers to request goods to be made just for them by these designers. Now with Photomake they're inviting creative people who don't know how to use design software to participate simply by sketching what they want on a piece of paper and uploading a photo of it to get it made.

Derek Elley from Ponoko said in an e-mail that "One of the cool things about Photomake is the quality of the result – it's truly hand drawn. Because digital making is so very precise every tiny bump in the hand drawn creation is picked up and made for real. This gives a very natural and human feel to the things you make."

The trick behind Photomake is some very clever file conversion technology that is more accurate than anything that has come before it. It is designed so that what you draw is what is made, without any touching up required in a design software program.

This is a major revolution in the democratization of design and innovation. We know from empirical research that many users innovate and have creative ideas ahead of the market. Up to today, they either needed a manufacturer listening to them and turning their ideas into products. Or they had to have specific skills to turn their ideas by themselves into a design and get it produced. The later process was made much easier in the last few years, but still required skills in using design software and how to place a design on a machine. Now, even this hurdle blurs ... driven by new technology that allows this process at rather low cost.

So, go ahead and just hand draw your next Christmas presents.

Context:
- Press release by Ponoko on their new service.
- Video showing the entire process: http://www.ponoko.com/photomake
- On the upcoming MIT Smart Customization seminar, Cathy Lewis, CEO of Desktop Factory, will present what will be next: Transfer your custom designs into products in your home as easy as today printing a document.

MIT Seminar on Mass Customization - Meet the Thoughtleaders in the Field

MIT Faculty Club, MIT Sloan School of Management, Cambridge, MA, November 10-11, 2008

Another event ... but one that we believe will matter and create value: We are inaugurating the MIT Annual Smart Customization Seminar. Its foremost idea is to connect managers in peer-to-peer interaction to foster an intense discussion, facilitated by presentations from industry leaders and the Smart Customization Group faculty. The seminar's core faculty consists of Mass Customization guru B. Joseph Pine II, MIT Design Lab Director William Mitchell, and myself (Frank Piller).

The seminar provides a unique opportunity everyone working on, implementing, or considering mass customization and personalization strategies and technologies (note: it is organized in the style of the MIT Executive Education, so there are no student discounts, etc.).

The MIT Smart Customization Seminar is the only event of its kind in North America and provides an in-depth coverage of one of today's most important business trends. The objective of the 2008 seminar is to take an intensive look on the success factors and "how to do it” aspects of mass customization and personalization.

For more information, the preliminary agenda, and registration please refer to the agenda in the attachment and our seminar web site: http://stellar.mit.edu/S/project/smartcustomization/

Space in the seminar is limited, so reserve your seat today, and also enjoy the early registration discount until October 24, 2008.

Genometri is spinning-off new user manufacturing start-up, JuJups

Customization veteran Sivam Krish (CEO of Genometri.com) is in the progress of launching a new company, JuJups. The idea of JuJups is to create a kind of Über-Personalization site combining ideas we have seen at Ponoko, Shapeways, Fabidoo ... etc.

JuJups.com shall become a new generation 3-D design creation gateway that allows consumers to create their own 3D content. Through JuJups, a worldwide community of users will come together to co-create, share, and co-produce designs - designs that can be realized as real-world products.

3D printing and Rapid Manufacturing methods are now maturing into affordable and reliable technologies which are increasingly accessible to companies. Combined with online design tools, this is opening up a whole new dimension of product possibilities where products can be designed, personalized and customized by customers themselves. Given the great capabilities Genometri has with regard to 3D design tools, this is a venture to watch!

In a new blog, he is reporting about his venture. http://genometri.com/blog/ In today's posting, he provides a nice quote by Amazon Founder Jeff Bezos (old, but not known to me before):

"Before long, “user-generated content” won’t refer only to media, but to just about anything: user-generated jeans, user-generated sports cars, user-generated breakfast meals. This is because setting up a company that designs, makes and globally sells physical products could become almost as easy as starting a blog - and the repercussions would be earthshaking."

In his blog post, Sivam summarizes neatly that this already is happening. His company, Genometri, is working on some of the technologies that will take this much further. The prosumer economy is taking shape as the result of convergence of three major developments: 1. Online Content Creation, 2. Mass Customization, 3. Social Networking.

Read his full blog post for a good summary of recent companies in the field.

Shapeways Launches Consumer-Focused Customizable 3D Merchandise Platform

Shapeways is spinning-out from the Lifestyle Incubator of Royal Philips Electronics, located in Eindhoven, The Netherlands. The site can be seen in the lines of Ponoko, Zapfab and other user manufacturing sites allowing users to create and manufacture their own design with a large freedom of design.

The site very neatly incorporates all elements of a good user manufacturing system I outlined some time ago in this blog:

- A 3D model library
- An easy-to-operate 3D-design toolkit (well, not at this stage yet)
- A flexile manufacturing system producing the users' design (more or less) rapidely

Utilizing a 3D model library, (starting with a lamp and a bowl), consumers can manipulate the structure, look and feel of their own products. Users can twist, mash, and create their own 3D objects which then are being produced within 10-days or less. Shapeways then verifies objects to ensure printability and provides a real-time cost estimate. Within 10 working days, a tangible 3D product will be produced and arrive at the consumer's home globally.

Browsing over the site, it still looks a bit beta, and their co-design toolkits is an external Java-based software that demands quite some time to download and install separately. Using it then however was easy (despite some annoying comments that I should create a profile). But it is a start ...

Anyway, Shapeways takes a major step towards the next generation of consumer co-creation and mass customization. Consumers without 3D modeling skills can shape, mash, imprint and design their own 3D products at Shapeways.com. Products are produced with a rapid manufacturing system, and in the moment they all still have this white prototyping look :-)

From lamps with a personal message to fruit bowls linking back to memorable moments, the Shapeways Creator Engine has a beta library of predesigned product templates which the company will grow rapidly over 2009.

"We recognize the desire of consumers who want to own or give something that is unique and has their special, personal touch," Peter Weijmarshausen, CEO of Shapeways, is quoted in a press release.

"With the Creator Engine, now anyone can participate in the artistic process and create something that is truly a reflection of their own needs and tastes. With the Creator Engine, we have broken the currently existingtrade-off between freedom of design and the complexity of the design process."

Shapeways can be seen as a new application of rapid manufacturing in the consumer space. I recently attended the Rapid Manufacturing Conference at Loughborough University. While a posting on this event is overdue since weeks (especially after Jochen Krisch invited one publicly), I refer you to Matt Sinclairs's great report about this conference which also provides you much more insights in the kind of products we can expect in the future on platforms of Shapeways.

Context:

- My earlier posts on Fabbing and Rapid Manufacturing.

- Matt Sinclair's report on the 3rd RM Conference

Keds & Zazzle Are Bringing Footwear Customization to a New Dimension

(updated - Aug 13, 2008) Customizing footwear has been a long theme in this blog. RYZwear recently offered a fresh approach to this (see my report), and now the evolution of custom footwear continued one more step. US shoe brand Keds just launched its new custom footwear offering, called Kedsstudio.com. While looking at the first glimpse like a copy of NikeID or Timberland's Custom, a closer look on the site convinced me that Keds went much further.

Keds is an iconic US brand that actually invented the term ‘sneaker’. Since 1916, Keds is offering its classic champion sneaker and a large variety of other styles. Keds is a subsidiary of the Stride Rite Corporation, which again is a unit of Collective Brands, Inc.. Collective Brands is the owner of Payless ShoeSource, a more than 4,500-store retail chain in footwear, and thus one of the very big guys in the international footwear market.

With kedsstudio.com, they created a mass customization offering that goes far beyond the present state of the art in this industry. Their advancements are with regard to two dimensions:

First, users can upload any design or picture on their shoe. So it is not just picking color options for pre-defined components of a shoe, but really getting what you want. Shoes are manufactured with an advanced digital printing technology that offers great variety in high quality. The customized sneakers are produced in China within 24 to 48 hours, and will be received by consumers within one to two weeks, depending upon the shipping method selected.

Secondly, and more interesting, Keds is one of the best examples of a new trend in mass customization: Keds actually did not build any mass customization operation of its own, but outsourced most of the process to mass customization intermediary Zazzle. Keds Studio is one of the finest examples for the benefits of the new MC infrastructure providers.

In an e-mail, Gregg Poulin, who initiated and implemented the Keds mass customization program as the e-commerce director at Keds, described how this collaboration worked (Gregg has left Keds to become CEO of compete.com). When Keds' management decided to profit from the mass customization trend, Gregg had to face a tough challenge:

"Essentially I had no budget and very little partnership dollars to create a custom shoe program that as you know can cost millions of dollars. In order to complete the vision I needed to be creative and find partners."

While browsing the web looking for a solution, he found my blog and a report on Confego, the company of Brennan Mulligan that later became part of Zazzle:

"One [solution] I found through your writings is Confego. They were the second key to the solution. I had the brand, they had the process/systems. Now I needed the community, which is where zazzle.com fit in."

With this partnership, Keds has beaten Adidas, Nike, Puma, Timberlands and the other large players in the industry with a very elegant solution: It truly is the first 'custom' shoe program that enables people to not only design their own shoes from the ground up but also to sell their own collection to others and make a profit. Gregg told me:

"Within 48 hours, there have been over 18,000 designs published on Zazzle. Can you imagine the dollars it would have taken an internal team to accomplish that feat? No inventory to carry, not guessing on what will sells. At $60 per pair everyone is making margins well above, including the factory!"

The configurator is executed well and has all the elements of a good mass customization configurator. It also features functionalities like sharing designs, getting inspirations, using templates, saving designs, etc. which are part of the Zazzle online experience. For Zazzle, Keds also is a large win as they now could add an entire new category to their assortment of customizable products. For Keds, mass customization is just seen as a continuity of what consumers used to be by their own:

"Since the launch of the Champion in 1916, consumers have been enhancing their Keds with their own personal style using markers, paints, pens and other creative tools," G. Ribatt, president and chief executive officer of The Stride Rite Corporation, Keds' parent company, is quoted in a press release.

"This growing form of expression was the inspiration for Keds Studio. Through our relationship with Zazzle, we can now offer Keds customers the opportunity to bring an uninhibited range of design options and a more professional design aesthetic to this classic shoe."

Keds Studio and its cooperation with Zazzle is a great case of what you can achieve in mass customization with creativity and little money by using the existing infrastructure of mass customization enablers. And, by the way, Zazzle does not care whether you are Keds or just an average consumer: They may not launch an entire new product line for you, but like every consumer, you can turn your creative ideas and market opportunities in your own offering (Spreadshirt or Cafepress are offering similar services).

Update Aug 13, 2008: In a mail from Zazzle, they told me that one week after the launch, more than 30,000 user-generated designs for custom shoes were created in the community.

Jeff Beaver, co-founder and chief product officer of Zazzle, reports:

“We have an incredibly diverse and talented community of designers, and had high hopes that the opportunity to create custom shoes would get them excited. We’ve simply been blown away by the response, both the volume and variety of user-generated designs have exceeded our expectations. 

Some of the most popular themes include art, music, animals and politics, but you can already find pretty much anything.  Developers are also taking advantage of the platform – within 48 hours after launch, one blogger created a Google Maps mashup so that you can get a map or satellite photo of your hometown on your new kicks.” 

Redesign of RedesignMe: Dutch user innovation catalyst starts new service

Everybody knows about some product he or she struggles with once in a while. Maybe you even thought of a solution. Now you can upload these solutions to a website and share them with the world.

RedesignMe is a great Dutch company focusing on open innovation and user co-design, It was founded by designer Maxim Schram who was frustrated that he had some great ideas how to improve existing products, but had not opportunity to get companies listen to his ideas.

So he started his own web site posting his ideas for improvements – and inviting others to do the same. 

His company, RedesignMe, aims to improve the products and services around us by collectively rethinking bad products into better products and good ideas into great ideas. The offering is called Design Critique. Maxim even came up with a simple toolkit so that users are able to quickly capture ideas. Actually it is not more than a simple, easy to use drawing tool that allows you to draw on a photo of a product. But is a great help to really express what you are going to say.

With Design Critique, RedesignMe collects the best product improvements based on their users input and communicates that back to the original product designers & producers.

RedesignMe contacts the companies behind the products in question to show them the feedback and encourages them to reply directly to the users and eventually fix the problems.

RedesignMe also encourages the companies to work more closely with their end-users by setting up RDM Challanges, their second product.

RDM Challenges are conceptual or design-driven challenges initiated by companies that want to involve their customers more closely into their product development process. RDM Challenges clearly describe a (design) problem and participating users are rewarded for their input through their RDM system. Feedback can be in form of a comment, sketch, set of pictures, mood-board, movie, prototype or total redesign. They just started the first RDM Challenge for the DECT Forum, for concepts based around their new CAT-iq technology: http://cat-iq.redesignme.com

As an incentive, participants can earn points (RDMs) by co-designing products with manufacturers. They can redeem these RDMs in their online shop.

In a short while, RedsignMe also plans to introduce the "RDM Challenge Pro", where they invite people to come to our office to co-design products, and discuss with manufacturers.

So another opportunity for you, the consumer, to place your creative ideas.

Threadless - the full story: Inc. Magazine Feature on Threadless

Max Chafkin, a staff writer the US Entrepreneurship journal Inc. Magazine, has written a great report on Threadless  for the June 2008 issue of the magazine. It is available in a free online pre-press version now.

Max tells the entire story of Threadless, starting with the episode of a meeting at MIT where the Threadless guys gave one of their first public presentations. I had the privilege to be part of this meeting, and it is fun to read about it in paper (especially as I am at MIT in the moment, writing these lines from the same building where we had the initial meeting with Threadless).

Max did a great job in documenting the history and genesis of Threadless, but also reflecting on its future. Here are some quotes of Max' analysis of the case, but head to the website to read the entire article:

On Threadless' Size and Development

This rapid engagement propelled the company through four years of phenomenal growth, beginning around 2004. The user base grew tenfold, from 70,000 members at the end of 2004 to more than 700,000 today. Sales in 2006 hit $18 million -- with profits of roughly $6 million. In 2007, growth continued at more than 200 percent, with similar margins. Though Nickell refuses to disclose the exact revenue number -- perhaps because he now counts Insight Venture Partners, a New York venture capital firm, as a minority shareholder -- it seems fair to assume that Threadless sold more than $30 million in T-shirts last year.

Ask Nickell what he makes of his company's whirlwind success, and he will respond rather sheepishly. "I think of it as common sense," he says. "Why wouldn't you want to make the products that people want you to make?" Indeed, the idea that the users of products are often best equipped to innovate is something many entrepreneurs know intuitively.

And it is supported by a growing body of research. A study published last year in the Strategic Entrepreneurship Journal suggested that the vast majority of companies are founded by "user-entrepreneurs" -- people who went into business to improve a product they used. Meanwhile, studies by von Hippel and others show that in industries as diverse as scientific instruments and snowboard equipment, more than half the innovations generally come from users, not from research labs.

On user innovation and the resistance of traditional companies to adopt it

Some companies actually punish these people by cracking down on unauthorized innovations. Apple has famously "bricked" -- that is, electronically disabled -- iPhones that have been enhanced by their owners. Other companies pay lip service to user innovation but have trouble following through on the concept. "Companies are very good at creating platforms for external input, but they're very bad at using this input," says Frank Piller …

Threadless is an exception to this. "You could say that what Threadless does is trivial, but it's not," says Harvard's Lakhani. In fact, the very triviality of Threadless's product -- something as low tech and as commoditized as a T-shirt -- proves that vibrant online communities can drive all sorts of nontechnical businesses. This should be encouraging news to entrepreneurs. Customer communities have become exceedingly inexpensive to build and manage; blogging software and social network platforms, for example, are now available for free from a handful of start-ups. "We thought that open source could only work in software, and now it's being successfully applied to a product as mundane as a T-shirt," Lakhani says.

On Threadless' Corporate Culture and Work Style

[Today], the company is suspiciously companylike. The go-carts generally stay parked, the buck stays mute, and the Ping-Pong table serves as a gathering place for impromptu meetings. "When I started, we spent half the day playing," says Lance Curran, a bearded 29-year-old wearing a beanie, jeans, and a flannel shirt. "That doesn't happen anymore." This is not to say Curran doesn't like his job. On the contrary, he nearly glows when he talks about his rise from a temporary warehouse worker in 2005 to the warehouse manager in charge of a staff of 18 today. ...

Like Curran, most of Threadless's employees come with no obvious qualifications for their jobs. The oldest staff member is 33, and many are under 25. The employees do, however, arrive with a deep and abiding love of Threadless, having joined the community long before they entered the work force.

Joe Van Wetering, a 21-year-old illustrator who works in the production department, was a frequent visitor to Threadless's offices as a teenager before taking a job in the warehouse in 2006. Ross Zietz had won seven competitions while studying art at Louisiana State University before he took a job as the company's janitor in 2004. He has since been promoted to art director, charged with helping the winning designers get their entries ready for printing. In fact, 75 percent of the company's 50 employees were community members before they were hired.

On other product categories Threadless is exploring

Now, Nickell is set to let his club loose on other businesses. In addition to expanding to children's clothing and retail, Threadless will begin selling prints and posters online. And later this year, the company will add a range of products, including handbags, wallets, and dinnerware, under the brand Naked & Angry. Each item will be adorned with patterns submitted by users, with a new product launched each month. "I think Naked & Angry, if handled properly, has the potential to be way bigger than Threadless, because we have the flexibility to do everything," says Kalmikoff, who envisions moving into high-end clothing as well as housewares. Jeff Lieberman, managing director of Insight Venture Partners and a board member, is even more bullish. "To say it's just a T-shirt company is absurd," he says. "I look at it as a community company that happens to use T-shirts as a canvas."

 
And Max' final evaluation of Threadless' Business Model: A fundamental economic shift

The way Eric von Hippel sees it, Threadless has tapped into a fundamental economic shift, a movement away from passive consumerism. One day in the not-too-distant future, he says, citizen inventors using computer design programs and three-dimensional printers will exchange physical prototypes in much the same way Nickell and cohorts played Photoshop tennis.

Eventually, Threadless-like communities could form around industries as diverse as semiconductors, auto parts, and toys. "Threadless is one of the first firms to systematically mine a community for designs, but everything is moving in this direction," says von Hippel. He foresees research labs and product-design divisions at manufacturing companies being outstripped by an "innovation commons" made up of tinkerers, hackers, and other devout customers freely sharing their ideas. The companies that win will be the ones that listen.

This may or may not come to pass, but the lesson of Threadless is more basic. Its success demonstrates what happens when you allow your company to become what your customers want it to be, when you make something as basic and quaint as "trust" a core competency. Threadless succeeds by asking more than any modern retail company has ever asked of its customers -- to design the products, to serve as the sales force, to become the employees. Nickell has pioneered a new kind of innovation. It doesn't require huge research budgets or creative brilliance -- just a willingness to keep looking outward.

Context:
- My earlier reports on Threadless are here and here.
- The full Inc. Magazin article

Spreadshirt Reveals New Crowdsourced Logo

Remember the Spreadshirt Crowdsourcing contest to get a new logo from its community, the Open Logo Project 1.6 (OLP) ? I was part of the judging panel, and it was a fun activity to do. "We wanted to take this to the community who use, create and live our product, rather than to an agency", Jana Eggers, Spreadshirt CEO, is quoted in a press release.

The results were in at the end of the year, and now finally the winning logo has been placed on the site and all CI materials. Kim Larsen’s ‘Love Tab’ was the winning design, chosen from 2,800 submissions (from 45 countries). Kim is a 23 year old graphic and interactive media designer from Sweden.

"I wanted to make personal branding visually simple and to embed a symbol everyone can relate to.", he says, "The heart resonates with the feeling of love you have for something you’ve created and the stitching with the hand-crafted nature of the product."

Context:
- My previous report about the contest.
- The official contest site
- Press release at Spreadshirt (and I do not know whether being a web 2.0 guru is a good thing or not today).

New Blog on Mass Customization and Rapid Ranufacturing and how this will influence the design profession

We dont do retro is the personal blog of Matt Sinclair, a designer based in Helsinki. I first met Matt on the MCPC 2007 conference and then again last week on a workshop in Helsinki, and he does REALLY interesting work on user co-design.

His blog mainly concerned with mass customization and rapid manufacturing, which are the areas he researching for his PhD at Loughborough University in the UK. But you’ll also find information about other subjects that interest him - lead user innovation, open source design and industrial design in general (Matt also wrote one of the most extensive MCPC 2007 reviews)!

His Ph.D. is titled "An investigation of the feasibility of product architectures to facilitate consumer-created designs in the consumer electronics industry, using rapid manufacturing technologies as an enabler"

While he expects not to be ready before Summer 2010, his early thoughts already are quite interesting:

"Rapid Manufacturing (RM) is defined as the direct production of finished parts or products, most often utilising one of a number of 3D printing technologies. ... The most important difference between rapid manufacturing technologies and traditional mass manufacturing technologies such as injection moulding is the absence of tooling. This has a number of important implications. One of the common features of mass manufacturing processes is that the means of production require substantial initial investment, however once in place the cost of manufacturing a single part or product (relative to the initial investment) is negligible. It is therefore a basic principle of mass manufacturing that as the number of parts produced increases, the cost of production of each individual part decreases. This inevitably leads to uniformity, since even small design changes require significant reinvestment in tooling.
...

Mass customisation offers the possibility of designing for niche markets, in small production runs, but it will be impossible for a designer, or even a design team, to be an expert in all these niches. Designers will therefore need to accept the necessity of inviting consumers to take part in the design process, even to design their own products. Furthermore, rapid manufacturing reduces the level of technological expertise required to design functioning parts. It is therefore likely that consumers will begin to design and produce their own products whether officially sanctioned by a brand or not.

The purpose of the traditional design process is not just to impose a uniform aesthetic however, it also refines and rejects on the basis of ergonomics, durability, integration with other products and systems, cost etc. These are all areas in which the designer’s expertise is the best tool to resolve the conflicting demands of a product brief. To make sense of the potential for multiple product variants which mass customisation offers, my hypothesis is therefore that the task of the industrial designer will in future be to create modular product architectures which define and limit the parameters of any possible design."

Go to Matt's blog here: We dont do retro

Un-Readymades: From Object to Experience. A study of mass customization from the perspective of industrial design

Interview with Martin Konrad Gloeckle, NYC, on consumer co-design and his series of "un-readymade" designs, a great interpretation of the customization trend

When I saw these pictures, I was fascinated immediately ... Martin Konrad Gloeckle, an Industrial Designer currently based in New York City, created some wonderful designs that are one of the best interpretations of the customization trend I ever saw. His designs are part of a study where he discusses the customization trend from the perspective of industrial design.

Born and raised in Germany, Martin relocated to the US in 1996, and recently finished his Master’s Degree in Industrial Design at the Pratt Institute in New York. Martin has additional degrees in Computer Science and Business Administration, and before returning to school had a successful career working for leading web and interactive advertising agencies both in Germany and the US. Martin’s design work has been featured in exhibitions, design blogs and magazines including New York Magazine, his award-winning Bendino lamp is currently produced and distributed in Europe.

Martin is the author of "Un-Readymades: From object to experience" – a study of mass customization from the perspective of industrial design. In this work, Martin has analyzed how consumers are moving away from being passive consumers to actively influencing and shaping their world. Parallel to this, consumers are increasingly looking for improved experiences, involvement, and personal expression. In return, user-generated content or the Do-It-Yourself movement are booming.

But how should product design react on this? Martin finds that up to today, most designers have not reacted on this trend and still are just focusing on providing ready-made, fixed and stable products. He also finds that conventional mass customization systems still do not provide a full user experience or often require advanced knowledge or tools.

In his study, he explores the next levels in this field. Based on research and design explorations, it proposes a framework for product design that engages the user and allows for deeper experience and involvement. It provokes a rethinking of the products we use and interact with on a daily basis, and presents several designs based on this.

In a recent interview, we spoke about his work and how he developed his design.

Martin, what is the key element of the design framework you propose to engage consumers deeper into experiences?

Well, the proposed framework actually has six major principles. However, these are based on two key points: A) Create design opportunities for the user, and B) Use a low-tech approach.

Let me start with the first point: What we can observe today in the online or two-dimensional world are increasingly active, involved, and creative consumers. This includes things like the so-called ‘user generated content’ of blogs, YouTube, Wikipedia and so on, as well as the whole field of desktop publishing, desktop video, desktop music etc. However, when it comes to the world of three-dimensional products, there is very little happening at this point. There are simply very limited opportunities available to the consumer.
The series of products I created tries to address this. Called ‘Un-readymades’ to express the involvement of the end-users, they provide consumers with opportunities to design, create, and express themselves.

Of course, there are other developments related to this trend. Things like the many online customization tools, the fabber and prototyping tools, and the increasingly available D.I.Y. services like Ponoko or Buglags to name a few. These however generally are very technology driven. And this is where the second point comes in. Technology has opened many areas to the average consumer. But at the same time there still often is the need for certain knowledge and tools, be it of hard- or software. Therefore, this is not accessible to everyone. In addition, the user is physically removed from these products during the design process. Rarely is there any direct interaction between the product and consumer. By using a rather low-tech approach, I am trying to address some of these issues.

Browsing over your web site, I was fascinated by the originality of your designs that incorporate your ideas. Can you illustrate your framework with one of your own designs?

One of my goals was to create a multitude of designs, to explore different areas and address different users as well as to show the flexibility of the framework. To pick one piece out, the ‘drawn’ vase is probably a good example. It is essentially a combination of a dry-erase board with an opening for a flower and a water container mounted behind it. You can use it on the wall or on the table. What the dry-erase board does is to allow the user to redesign its surface and thereby the vase.

So lets go through the six framework principles:

Enable user involvement: The vase is somewhere between an off-the-shelf product and a D.I.Y. project. While it provides the users with a starting point in form of the vase functionality, it allows them add to this.

Make it interactive: By drawing on the dry-erase board, the user directly and physically interacts with the vase, and thereby develops a closer relationship with it.

Provide room for play: While the vase offers a starting point in terms of functionaly, it otherwise literally provides an empty canvas. Not everything is predetermined, but is left open for playful exploration. Watching people creating all different kinds of designs with this was definitely one of the highlights of this project for me.

Keep it simple: I wanted these pieces to be approachable for everyone, meaning not requiring any extensive tools or knowledge. Everyone knows how to hold a pencil, so everyone can use this product. Of course, people‘s drawing skills differ, but that is were the erasable and forgiving nature of the dry-erase board comes in.

Make it personal: As the vase provides for more than just pick&choose within a predetermined selection, it really allows people to create very personal and unique pieces. No vase will ever look the same as any other.

Small Steps: The piece doesn’t require anybody to suddenly draw like an artist. Rather, the user can start with a very simple drawing. But as his confidence and capabilities grow, so can his created product.

What is the role of companies in your concept? What would you recommend a manager that wants to place your ideas into practice?

In terms of manufacturing, the beauty of these designs is that they do not require any major changes in the manufacturing infrastructure as is usually associated with mass customization. As the customization happens at the end user and not in the factory, the company still only needs to create one fixed product.

In terms of management, it probably more comes down to being open-minded and believing in the creativity of end-users. Basically giving the consumer more credit than most companies currently do.

At the same time, we of course need to realize that while customization is a major trend, it is still to be seen how much of the mainstream it will become. While especially Generations X and Y are increasingly interested in self-expression and involvement, the majority of consumers still prefers buying non-customizable products and maybe express themselves solely through selected purchases.

What did originally motivate your research? How did you choose this topic?

As I was researching potential thesis topics, certain personal interests of mine came up repeatedly. These are areas that I have always been fascinated by, like peoples desire to express themselves, peoples urge to create, the growing D.I.Y. movement, and finally new and evolving production methods. At one point, I realized that there might be a way to bring these different areas together, and to use this combination to enable and encourage creativity and self-expression for the consumer. And to simply provide for more joy and fun as part of a product experience.

Why do most industrial designers neglect the customization and self-impression trend? Do design schools educate your designers in these new topics?

First off, there are of course certain products where customization is not applicable, for example for safety reasons. Besides that, a couple of things come to mind.

For one, designing a product that is customizable means giving away some control of the final product. As a designer, you put a lot of time and thought into determining a very particular look, feel, and functionality to create something that addresses a specific need. While most products usually stay as intended when they leave your hands, with customizable pieces you control them only up to a certain degree. This is something not everyone is comfortable with, especially with more visually driven pieces.

In addition, there is also a school of thought with some designers that only they should be the ones ‘designing’. After all, that is what they went to school for and spent a lot of time on, learning how to do it right. According to them, the general consumer does not know about designing, and should not be allowed to do so.

This whole issue of ‘professional’ versus ‘amateur’ designer, across all areas from web over graphic to industrial design, is something we could easily talk about for hours. I personally do not subscribe to this rather elitist thinking, and believe that there is and always will be a place for both. However, and as in every other profession, we designers need to rethink our roles periodically, and adjust to a changing environment.

In terms of design school education, there is obviously an inherent delay of current trends manifesting themselves in the education curriculum. Which is not necessarily a bad thing. I believe the value of design school, besides teaching basics like form and color, is rather in teaching creative thinking. This together with providing the appropriate environment for exploration is the starting point. The rest is really up to the individual student, to investigate and explore different areas, and push his own limits as well as that of design in general.

What’s next for you now that you have finished this project?

In terms of the ‘Un-readymades’, I am starting to look into potential options of moving some of them out of the prototype stage and into production. Besides that, as I am done with my Industrial Design degree, I am also currently interviewing for a job. Things are still open though, so I guess I should use this opportunity to invite anybody looking for an Industrial Designer to take a look at my resume and portfolio on my website.

To conclude: What is, in general and beyond your industry, the greatest mass customization offering ever – either one that is already existing or that you would like to get in the future?

Well, this is a pretty grand and open question. Maybe to answer it in a similar open way, I would pick the human mind? It probably does not get much more mass-customized than that. And thinking of it, it actually fits pretty well in my framework. :-)

Contact Martin at martin@martin-konrad.com or http://martin-konrad.com
You can view an illustrated abstract of his work at http://martin-konrad.com/unreadymades

Zapfab: User-generated content meets 3D Printing

A new Ponoko-alike company is coming from Manchester in the UK! Zapfab Ltd is a user manufacturing start up that offers a new way of delivering individualized, customized products. As other companies in this field, they are combining the creativity of user-generated content with the power of 3D Printing (fabbing).

In a press release I got today, the company is described as follows:

"User-generated content is ubiquitous throughout the internet, from weblogs to YouTube videos. Zapfab builds on this trend, by providing a website where users can easily generate unique designs for 3D objects.

3D Printing is rapidly gaining ground as a way of creating real, physical objects from 3D design data. Zapfab provides an easy way to access this technology: Once you have generated a 3D design you can choose to have it 3D printed: Zapfab will 3D print the design and deliver the finished object to you.

The Zapfab website has two main areas: the Design Catalog and the 3D Customizer. The Design Catalog contains all the designs on the site and is a repository like Google's 3D warehouse. The 3D Customizer is where the customizing takes place: Each design can be customized in different ways: color, size, pattern, etc. and the 3D Customizer contains simple controls for each of the options. So, once a user has customized a design, she can save it back into the catalog for other people to see. And then they in turn can customize and build on her design.

“We see three main groups of users for Zapfab.com,” said Julie Wood, Zapfab Director, in the press release “First, we have made the 3D Customizer really easy to use, so that anyone can create a unique, customized design in just a few minutes.

Second, there are a range of users with 3D modelling skills, who will be able to upload their designs to the site; and we aim to make it easy for them to add customizations to those designs.

Third, users with programming or scripting skill will be able to create new, highly-customizable designs. And all the designs, from the simplest to the most complex, are customizable through the same easy-to-use 3D Customizer.”

At the moment, Zapfab’s Design Catalog contains over 100 customized designs, ranging from bowls to boxes and bangles. All of the designs can be 3D printed “as is”, or freely customized. It is a nice, but at this stage not too creative collection of things. But I hope to see much more activity on their side, and given that they are located in Europe, I also will try this service by myself in the next weeks and let you know about my experiences.

Great Report on User Manufacturing, Mass Customization, and How a New Infrastructure is Providing New Opportunities for SMEs

Last week, I got a note by Steve King, a research affiliate with the Institute for the Future. This is a non-profit research group based in Silicon Valley. Founded in 1968 by a group of former RAND Corporation researchers with a grant from the Ford Foundation to take leading-edge research methodologies into the public and business sectors, the IFTF today publishes reports to help people and companies to understand what is coming next.

They recently released a forecast report that is part of a series on the future of small business. In this report, they stress that small businesses will actively take advantage and use new manufacturing methods to create mass customized goods.

The report was sponsored by Intuit and can be downloaded on their website: http://www.intuit.com/futureofsmallbusiness/ (download Report #3)

In the report, IFTF writes about a new artisan economy that is the result of new manufacturing technologies, enabling individuals to access similar production technologies as large corporations (crafters using Ponoko, see previous posting, are a perfect example). It is a very nice summary of many of the recent trends that I have discussed here. Fabbing, blogging, user manufacturing, customization, open innovation -- it's all there and brought into a nice and coherent framework.

I especially liked the part about the new infrastructure that is enabling these developments:

"Plug-and-play infrastructures will make small businesses more competitive and successful. The ability of small businesses to take advantage of large-scale infrastructures and leverage new technologies will allow them to enter and compete in industries formerly served only by big business."

As an example, they refer to a great service that is enabling moms to become entrepreneurs, Mom Inventors, Inc.:

"For those who want to avoid teh hassle of assembling these services, firms are available to do everything for an entrepreneur. Mom Inventors Ic., for example, weill develop, manufacture, and sell quality Mom invented products throughout the United States and Europe. The mom (entrepreneur) only needs to come up with the idea, Mom Inventors will do the rest."

So I am expecting to these many more knitted marvels and clever kitchen aids on the shelves, invented by "Lead Moms".

In an e-mail exchange, Steve told me more about the background of the report, and stressed another implication from their research:

"A major issue we are trying to figure out is how small business relates to mass customization and user innovation. This was originally prompted by our work looking at consumer generated media - specifically blogs.

We found that the blogs with the most traffic were not authored by consumers, but by professionals. The professionals tended to fall into two categories: (1) small or independent businesses trying to build a small publishing business; or (2) professionals using blogs to promote either themselves or the goods and services of their company. Looking deeper at the second group, we found that most of them worked for small businesses.

Based on this work (which we did several years ago), we started looking at other categories. We quickly found a similar pattern of small business participation across a broad range of categories, including media (YouTube videos, etc.), open source software, crafts and small scale manufacturing (a lot of Makers at Maker Faire are small businesses, for example), financial services, etc.

Basically, we saw small businesses playing a role in almost every category where niche products and/or services were being built or highly customized. We also found a pattern of category "power users" moving from being hobbyists to starting their own small businesses. We kept seeing "prosumers" turning into small businesses, and we kept seeing small businesses somewhere in the customization value chain."

Accordingly, another area indicated in the report where small businesses will grow in the future is to serve as an innovation lab for larger corporations. Platforms like Innocentive or P&G's connect and develop program will help small businesses to sell their creativity to larger corporations in an efficient way. This may be the next wave of contract research.

Overall, a nice summary of recent trends that is worthwhile reading due its focus on small businesses.

Context: Get the full report here. http://www.intuit.com/futureofsmallbusiness/ (download Report #3)

Ponoko: Design Contest and Latest Press on User Manufacturing Enabler Ponoko

Ponoko (see earlier report) gave one of the favorite presentations at the MCPC 2007 in Boston. The company is a perfect example of user manufacturing. Nic from Ponoko just informed me about their 10-day design challenge series, running from today until March 10. Each day, they ask for designs within a special category.

Being a small company, prices are not that big, but it will be lots of fun and it seems to be an easy way to test Ponoko. The Ponoko crew also can fill its assortment of user design with this project -- and thus, even if you do not win, chances are that other people like your design and you can sell it though their on-demand manufacturing system. The winner gets $1,000. 10 get $300. 25 get their designs made for free ...

For more details on the contest, go here.

Ponoko also got plenty of press in the last weeks, here is a review:

The New York Times – Tinkering at Home, Selling on the Web

The Economist – Bespoke Manufacturing – I made it my way

BBC News – The shape of things to come

Wired – (multiple articles)

MIT Technology Review – Automated Custom Manufacturing

TechCrunch – (multiple articles)

Engadget – Ponoko now live to make, market your gizmo

TrendWatching – 8 important consumer trends for 2008

Treehugger – (multiple articles)

User-led innovation: New report suggests a framework to structure forms of interactive value creation

strong>"User-led Innovation: A New Framework for Understanding Business and Social Value" is a new report published by the Smart Internet Technology Research Group in Australia.

The report reveals some of the major drivers of user-led innovation and explores how it is affecting organizations' relationships with key stakeholders. It investigates how user-led practices generate business and social value through a major case study of the virtual world Second Life.

A first part by Darren Sharp presents a comprehensive analysis of the structural changes behind the rise of user-led innovation, and develops a model of an emerging ‘User-led Services Ecology’. The second part by Mandy Salomon presents a practical case study of the 3D virtual world Second Life, an important site from which to explore advanced user-led practices, business strategies, and new forms of social engagement.

A nice feature of the report are extensive quotes from interviews with some of the key persons in the user innovation world, including: Eric von Hippel (MIT), Yochai Benkler (Harvard), Jimmy Wales (Wikipedia), Siva Vaidhyanathan (Virginia), John Howkins (Adelphi Charter), Michel Bauwens (P2P Alternatives) and Mitch Kapor (Linden Lab).

The report distinguished between four different fields where user-generated value creation unfolds:

"Widespread convergence of participatory culture, DIY media, collaboration and open exchange, along with decreasing processor, bandwidth and storage costs, have all driven the development of user-led practices across a range of disparate fields. This is leading to the emergence of a post-industrial innovation system that brings with it new production processes, content models, service platforms and licensing agreements.

In contrast to various forms of market-based transactions, user-led practices encompass their own distinctive value systems, motivations and principles governing cooperative forms of social exchange.

This report identifies four ‘user-led niches’ which have become sophisticated enough in their own right to warrant further investigation. Each niche embodies a major driver of the new post-industrial innovation system in the present era of distributed capitalism. These drivers play an important role in shaping the future development of user-led services, and comprise their own unique internal logic, economic model, source of value and objective."

The four user-led niches identified are:
- Social Currency Niche
- Collaborative Niche
- Extractive Niche
- Hybrid Niche

For a summary of the characteristics of these niches, see the picture or read the entire report. I enjoyed the structure and think it provide a nice way to evaluate current developments in the field of interactive value creation. The report is available for download here.

Crowd F(o)unding an Eco-Clothing Label: nvohk explores the collective customer commitment method to create a new fashion line

In a press release today, nvohk (pronounced ‘invoke’) announced that it has signed up over 1,250 future members for its crowdsourcing-based business model. Its founders, Brendan T. Lynch and Sergio Salas, claim that it is the "first community-managed, eco-friendly, surf-inspired clothing company."

Their idea places our "collective customer commitment" model into action: Get 5000 members who pay 50$ each of funding, use the money to create an eco-friendly line of clothes, and then sell the clothes to a wider public and share the profits with the original members. Members, as part of their pre-payment, get the right to vote on new designs and co-manage some of nvohk's business decisions. Members, for example, can decide about the logo design, web design, product design, advertising, etc. In addition, nvohk will donate 10% of net profits to environmental organizations selected by its members. In the mid-term, the company wants to recruit up to 40,000 members.

The idea has some appeal. It indeed "fills a gap in the lifestyle brand arena," as the press release says. Nvohk enables consumers to get involved and participate in business decision-making and environmental causes. It also provides consumers with an entertaining platform for making a perceived positive impact on the environment.

But it also is a clever business model building on customer integration. For the 50$, customers will get a special t-shirt and 25% off all nvohk products. They also get kind of a dividend: 35% of nvohk’s net profits will be transferred into reward points that can be redeemed by members to purchase products. This all sounds like a slef-sustaining business cycle.

If you want to invest 50$ as well, go here: www.projectnvohk.com.

Crowdsourcing methods are McKinsey's Prime Business Technology Trends to Watch In 2008

In the recent issue of McKinsey Quarterly, the business journal of strategy consultants McKinsey & Co, James Manyika, Roger Roberts and Kara Sprague discuss Eight Business Technology Trends to Watch In 2008. Five of those eight relate directly to the topics of this blog:

Four trends, Distributing Cocreation, Using consumers as innovators, Tapping into a world of talent, and Extracting more value from interactions are sub-sets of the larger Crowdsourcing idea.

(1) Distributing co-creation is just another term for our own "interactive value creation" or Benkler's "commons-based peer production" or Don Tapscott's "Wikinomics". No doubt that this is a mega-trend which has been described widely in the last years but which practical implementation just has started. In consequence, McKinsey estimates that 12% of all labor activity could be transformed by more distributed and networked innovation:

"Outsiders offer insights that help shape product development, but companies typically control the innovation process. Technology now allows companies to delegate substantial control to outsiders -- co-creation -- in essence by outsourcing innovation to business partners that work together in networks. By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control."

Interestingly, however, in the entire McKinsey article is no word on open source or open licensing models ("commons-based") which are a main driver for the efficiency of distributed open systems of value co-creation. This may be perhaps too much for the typical reader of McKinsey Quarterly.

(2) Using consumers as innovators: Well, not really a new trend, Eric von Hippel is saying this since the 1970s, and since the beginning of industrial production consumers are inventing new products. The new trend, however, is that firms are seeing this potential and they increasingly are utilizing the capabilities for innovation. They are not just asking for feedback on their own creations, but they are integrating consumers actively in the creation of something new. MyKinsey is quoting Threadless here, but this is not a correct example for this trend as most the creators at Threadless are no consumers but experts!

A better example, quoted by the iRise Blog in a posting on the McKinsey article, is Dell's IdeaStorm, and, on the B2B front, Salesforce.com. This software company is using an application for users to make suggestions to improve their CRM software. The top ideas from this contest is receiving executive-level visibility.

(3) Tapping into a world of talent is the consequence of opening your innovation and value creation process:. The people reacting on an open call for participation in the " Distributing co-creation" idea are those who are the most talented to do this work (as they have relatively lower cost to fulfill the job):

"As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence. Much as technology permits them to decentralize innovation through networks or customers, it also allows them to parcel out more work to specialists, free agents, and talent networks."

This leads to a further consequence, and their next trend: (4) Extracting more value from interactions. The more a company is relying for value creation in its periphery, the higher is its costs for coordination compared to production cost.

"As a result, a growing proportion of the labor force in developed economies engages primarily in work that involves negotiations and conversations, knowledge, judgment, and ad hoc collaboration—tacit interactions, as we call them. By 2015 we expect employment in jobs primarily involving such interactions to account for about 44 percent of total US employment, up from 40 percent today. Europe and Japan will experience similar changes in the composition of their workforces."

This is nothing new at all, the fact, that the so-called transaction cost are dominating the overall cost in a modern economy is known since several decades. But it is good that McKinsey are stressing this relationship again – as mastering these cost will become a major capability for firms which want to profit from crowdsourcing. Technology is leading this path:

"Technology tools that promote tacit interactions, such as wikis, virtual team environments, and videoconferencing, may become no less ubiquitous than computers are now. As companies learn to use these tools, they will develop managerial innovations—smarter and faster ways for individuals and teams to create value through interactions—that will be difficult for their rivals to replicate. Companies in sectors such as health care and banking are already moving down this road. […] But: Creating the business case for investing in interactions will be challenging—but critical—for managers."

(5) A last trend from their report is "Putting more science into management". Technology is continuously helping managers exploit ever-greater amounts of data in real-time to make smarter decisions. One of the business models which are enabled by this data-driven management is mass customization, named by McKinsey as "the holy grail of deep customer insight":

"The amount of information and a manager’s ability to use it have increased explosively not only for internal processes but also for the engagement of customers. The more a company knows about them, the better able it is to create offerings they want, to target them with messages that get a response, and to extract the value that an offering gives them. The holy grail of deep customer insight—more granular segmentation, low-cost experimentation, and mass customization—becomes increasingly accessible through technological innovations in data collection and processing and in manufacturing."

Go to the original article which has plenty of good references for further reading (requires registration, for a version of the full text of this paper, go to ZDnet).

Trendcamp Open Innovation by Net Culture Lab Austria

Net Culture Lab Austria is an initiative that wants to explore what "internet culture is" and how a large corporation, Telekom Austria, its main sponsor, can learn from it. The project was initiated in May 2007. It supports small projects of innovative people all around Austria who want to build, experiment, create, or craft in the broad area of "net culture" (remember that Austria is one of the world's leading countries with regard to multimedia and electronic arts).

Recently, I was invited to one of their regular "trend camp" gatherings, and it was a great experience for me. The topic of my 1.5 day workshop was open innovation, and we were a mixed crowd of managers of Telekom Austria (a typical former monopolist in the telecommunication industry, now under pressure in a deregulated market) and young artists, web programmers, lecturers in the area, and consultants. Organizer was Thomas Fundneider from a small innovation consultancy in Vienna.

The day was a great surprise for me: I frequently do this kind of workshops with companies, and regularly the reaction is one of fascination for the opportunities of open innovation, but always paired with a very strong resistance towards change and how this could work in their own corporation.

Not this time, however. The Telekom managers seemed to be even more open on the topic then the "net people", and thus it was a very refreshing experience, one that really filled me with hope that Crowdsourcing and open innovation really can change large corporations fundamentally.

In many small presentations by everyone from the group, and two large structures open table discussions, we generated lots of ideas and great input. I also learned a lot – and mow I am curious to see what Telekom Austria will do with our results.

More reports on this Trendcamp can be found (all in GERMAN language) at Polymatic, digitalks.at, the Telekom Austria Blog and at Thomas Fundneider's Blog

User Manufacturing Trendwatching Report

Trendwatching, a large trend research network, has recently published its annual briefing on the main trends for 2008. Among them is my favorite new topic, user manufacturing (other terms for the same idea are desktop manufacturing, manufacturing as a service, fabbing, ...). Named "MIY – Make it Myself" the Trendwatching crew is naming user manufacturing as the next big thing in user-created content.

"[user generated content]" is a mainstream trend now, one that keeps giving, with millions of consumers uploading their creative endeavors online, and tens of millions of others enjoying the fruits of their creativity. User-generated content, at least in the online world, has grown from a teenage hobby to an almost equal contender to established entities in news, media, entertainment and craft."

These consumers expect to be able to create anything they want as long as it is digital, and to customize and personalize many physical goods with traditional mass customization offerings. The next step in this evolution will be their desire to transfer digitally designed products into real physical goods as well.

Trendwatching is expecting that "MIY | MAKE IT YOURSELF (and then SIY | SELL IT YOURSELF) becomes increasingly sophisticated in the next 12 months".

As references, they refer to old friends which have been covered in this blog before:

# New Zealand-based Ponoko (which works like a Zazzle for 3D objects, see my original article on them here)

# Fab Lab Bcn (Barcelona) is part of the worldwide network of Fab Labs, an initiative of MIT Center for Bits and Atoms, and provides a laser-cutter, water jet, 3D printer, mini-mill and other machines for participants to use. One of Fab Lab's initiators is Neil Gershenfeld, professor at MIT and author of FAB: The Coming Revolution on Your Desktop.

# The Desktop Factory 3D printer, with a list price of USD 4,995, uses an inexpensive halogen light source and drum printing technology to build robust parts from composite plastic powder, layer by layer. Desktop Factory envisages that within three years, Desktop Factory's 3D printers will be affordable for home use.

# They also mention the Swedish design group FRONT and their Sketch Furniture project. This trio materializes freehand sketches of furniture into real options. Very nice, very expensive with a chair starting at USD 10,500 per piece.

The last section of their trend report is very important to read, something that I always mention in my presentations on the limitations of user manufacturing:

"Now, we're not saying every consumer is going to design and manufacture his or her own furniture or appliances. Rather, MIY is yet another piece of the participation puzzle: enabling those consumers who feel like it to call the shots, bypassing traditional players. In future briefings we’ll address the implications of what this choice – being able to consume ready-made or create their own versions of anything and everything – will mean for the behavior and expectations of younger generations."

Context:
- The orginal Trendwatching report

- My original report about user manufacturing and my definition of this idea

- My earlier report about Ponoko (more here).

- My earlier report about the low cost 3D printers

- If you can read German, Jochen Krisch had many excellent postings on user manufacturing in the last months, a very good staring point is his recent listing of all 3D printing services on the web.

- A very good starting point also is press reports of Z-Printer, a manufacturer of 3D printers used to make custom objects.

Video interview on mass customization and open innovation

In case you understand German and prefer to watch a video instead of reading a paper or book, this video is for you: Förderland, a large German Blog on Entrepreneurship, has conducted a nice video interview where I explain the basic concepts of mass customization, user innovation, co-creation and how this all belongs to each other (for a more detailed version of this, read our book).

In the video, I define the the basic concepts, give some examples, talk about the challenges, discuss, how entrepreneurs and start-ups can profit from these concepts, and name my personal best practice of a company in this area. And: The video also offers a view into my not really tidy and organized university office (note: I recently have ordered nice new office furniture, but as this industry is not doing any mass customization at all, delivery times for this are more than two months ...)

Here is the video (or go here to the full link and summary):
Thanks to the Exciting Commerce Blog where I noticed that my interview has been published first!

Create the Shoe of you Dreams - Participate in the CEC Shoe Design Contest

Open Innovation and crowdsourcing finally is arriving in the footwear industry

Crowdsourced logos were yesterday, now it is all about shoes. The CEC project is a large European research project dedicated to nothing smaller than reinventing the footwear industry. My old research group at TUM is a major partner in the project, and as part of the work, they are now running the first European Consumer Shoe Design Contest where everyone can become a shoe designer.

Your task is to design a shoe model along a theme called “Original Origin”. This category of aesthetic trends expresses cultural values, regional roots and techniques and at the same time uses authentic materials and innovative shapes. The contest asks everyone to play with the theme and interpret it in the most creative, but still feasible way.

More details on the contest can be found in the CEC Contest briefing which also has the exact rules of the design contest.

Submissions are evaluated by a top-class jury consisting of international shoe and design experts from companies like Hugo Boss, CallagHan, Liitto, Future Concept Lab, and Frau. The jury's criteria for the assessment will be design, innovativeness, feasibility, task alignment, and an overall score for excellence. In addition, also the public can vote on their favorite design and nominate a public winner.

Awards are a bit technical but provide a nice opportunity for everyone interested in footwear:

The first price is a site visit with Hugo Boss in Morrovalle/Italy to get a prototype of your design as well as to gain insight into prototyping process.

The second price is a real working prototype of your design, manufactured according to your design and mailed to you

The third price is a free participation at the “Future Vision Workshops” dedicated to the aesthetic trends in Milan (also, winners of the first and second price are invited to participate).

How to participate:

Register on cec-designcontest.net and enter the “Design Studio” to upload your design. All what you have to do is to provide a sketch or rendering of your design (and a short description). All further information can be found in the design briefing.

Submissions are accepted until December 31st, 2007. Winners will be announced on February 29th, 2008.

Now, start designing!

A personal comment at the end: The footwear industry is an extremely conservative industry far behind many other industries with regard to open innovation and customer driven value creation. So it is a real revolution that they now start such a competition. I am curious to see how this contest may change their attitude and expectations – and if the wining design ever will be produced. However, the rather long contest rules and the not too fancy prices already show how difficult it is to get their commitment. But it is a great start – and hopefully more initiatives like this will follow!)

Context information:

- The contest web site: http://www.cec-designcontest.net
- Earlier post on the CEC-made Shoe Research Project
- Similar ongoing competition (open source footwear)

MIT Technology Review on Ponoko: "Ponoko wants to give customers the tools to design and sell whatever they want."

Last week, Michael Gibson published a very nice analysis on Ponoko in the MIT Technology Review. I wrote about this company before, and the article has a nice summary of the recent developments of this user manufacturing start up.

Gibson writes:

"For most companies, product design and development is a long process of trial and error, involving, among other things, in-house designers, committees, timed product releases, and, ultimately, customer feedback. Until a product sells, or if it doesn't sell, it takes up costly shelf space in either stores or warehouses.

But by letting individuals dream up, make, and then sell unique products on demand, Ponoko is attempting to eliminate the product-development wing. Ultimately, it hopes to eliminate the need for a centralized manufacturing plant as well, by recruiting a large enough community of digital manufacturers--people scattered around the world who have 3-D printers, CNC routers, and laser cutters. Moving the site of production as close as possible to the point of purchase will reduce the need for long-distance shipping.

"Just as personal computing went from the mainframe to the desktop, and the result was distributed desktop computing, we see the same trend occurring with digital manufacturing, as it moves from the warehouse to the desktop," says Derek Elley, the chief strategy officer for Ponoko."

At the end of the article, Gibson quotes Phillip Torrone, a senior editor at Make magazine, who tried Ponoko to create a custom stand for his iPhone:

"They did everything that was required for me to get my product," Torrone says. "Their tutorials are fine; the templates were good examples. Pretty much, they did everything right. Now the question is, is there a demand? How much money does a company like this need to make to stay afloat?"

Ellery's answer is that, eventually, Ponoko's revenue will come entirely from digital services, not from manufacturing fees. The company intends to develop six revenue streams, including ad sales and commissions on design purchases."

For more analysis, head to the full article.

Ponoko and related services, and the corresponding business model, are the theme of my upcoming webinar with Pure Inisghts. More information here!

Webinar: The Next Gen of Mass Customization: User Manufacturing, Instant Companies, and Customer Co-Creation (Nov 29, 2007 on your desktop)

How a new infrastructure is enabling consumers to become instant manufacturers – and your future competitor -- 10% discount for MC&OI Blog readers

I am coming back to your desktop. After the large success of an earlier webinar on mass customization, London based Pure Inisghts is organizing a second webinar on the theme, this time around my new favorite topic of user manufacturing.

The topic: We are used to have a networked laser printer on every desk in our office and in every home, enabling us to print documents on the spot which a few decades ago demanded a specialized manufacturer. The same may be happening with the production of many other goods. Today new production technologies ("fabbing") and advanced design software allow average users to produce almost everything – on their own desk. Welcome to the factory in your kitchen.

This session will discuss the upcoming user manufacturing trend, a development that recently is taking shape in larger scope and scale: User manufacturing refers to a public available software, manufacturing, and distribution infrastructure that enables creative users and customers to design, build, and sell own creations to a larger public – without the traditional investments in setting up a business. User manufacturing supplements – or substitutes – mass customization strategies which many companies have implemented. It also may become the most efficient strategy to serve the long tail of variants in many industries.

Consider Spreadshirt, one of the world's largest producers of graphic t-shirts. This company just allows everyone to create an own assortment of designs, and then sell this assortments in highly targeted retail outlets, online and offline, to a small market segment the user knows best. Thus, Spreadshirt does not have to predict the long tail of heterogeneity of fashion products, but just focuses on allowing users to create and sell this assortment by their own.

User manufacturing is enabled by three main technologies: (1) Easy-to-operate design software that allows users to transfer their ideas into a design. (2) Design repositories where users upload, search, and share designs with other users. This allows a community of loosely connected users to develop a large range of applications. (3) Easy-to-access flexible manufacturing technology. New rapid manufacturing technologies ("fabbing") finally deliver the dream of translating any 3-D data files into physical products -- even in you living room. Combining this technology with recent web technologies can open a radical new way to provide custom products along the entire "long tail" of demand.

User manufacturing builds on the notion that users are not just able to configure a good within the given solution space (mass customization), but also to develop such a solution space by their own and utilize it by producing custom products. As a result, customers are becoming not only co-designers, but also manufacturers, using an infrastructure provided by some specialized companies.

The webinar will discuss recent trends and case examples of the user manufacturing trend. We also will compare the business models of companies which are building on the user manufacturing trend and which implement and operate the underlying infrastructure ´for creative users to become manufacturers.

Planned session outline:

- A short review of conventional mass customization thinking

- Which recent trends and developments enhance these strategies and how mass customization is related to “The Long Tail” phenomena

- What is user manufacturing, and which trends does this strategy support?

- What are the components of an infrastructure that supports user manufacturing?

- A review of business models of established companies and recent startups which already successfully benefit from the opportunities of user manufacturing

- A discussion of the major challenges and open issues in this domain

- Session wrap-up: Idea for further action

To register, please go to http://www.pure-insight.com/webinars/mass-customization-next-generation and use promotional code aix (case sensitive!) wenn registering for a 10% discount.

Note: You also can download the webinar after its initial live broadcast – but only when joining live, you can interact and ask direct questions.

All further information can be found here.

Context information

- If you prefer to see the content of this webinar in action, a seminar on Fabbing and User generated Manufacturing in Essen, Germany, provides a great opportunity on Nov 22.

- My earlier posts on user manufacturing

- Article in CNN online on the fabbing trend

- Article in New Scientist on the fabbing trend

- Article in Make magazine on how to use a fabbing device

Public Lecture: Open Innovation and User Innovation (RWTH Aachen, 4. Dec 2007)

What is open innovation? What is user innovation, and what is the real idea behind the 'lead user' concept? What are tools and methods companies can employ to profit from these buzzwords? Why does it make economic sense? When does it make no sense at all? What have we learned from case studies and pilot studies in this field? And how is Webasto, a leading German automotive supplier, profiting from creative users & customers?

These are some of the questions Alexander Lang and I will address in a public evening lecture at RWTH Aachen on Tue, Dec. 4. The event is hosted by the German Association of 'Wirtschaftsingenieure' (industrial engineers)..

Alex Lang and I will also talk about our experiences from a joint research project on user innovation which is co-sponsored by "Stiftung Industrieforschung", a large grant giving institution on Germany.

This is the first public event I am organizing in Aachen at my new university. So a special invitation to come and discuss with us. The regular language for this event is German, but if we will have international guests, we will talk in English.

All information (in German language) and an abstract of our talks can be found in this PDF.

The event takes place on 4. Dec 2007, 7:15 - 9pm, followed by a network reception. Place: RWTH Aachen, Karmann-Auditorium, Room FO 5, at Templergraben 62 (opposite of the RWTH Main Building).

The lecture is free of charge, and no registration is necessary. Just come to the room!

Here is some more information for all of our German speaking readers.

Open Innovation: Neue Ansätze zur Steigerung von Effizienz und Qualität der Produktentwicklung

Eine öffentliche Veranstaltung (Eintritt frei!) in Zusammenarbeit des Verbands Deutscher Wirtschaftsingenieure (Hochschulgruppe Aachen), des Lehrstuhls für Technologie- und Innovationsmanagement an der RWTH, der Stiftung Industrieforschung und der Webasto AG

Vorträge:

Prof. Frank Piller, RWTH-TIM: Open Innovation und Interaktive Wertschöpfung: Prinzipien und Erfolgsfaktoren

Alexander Lang, Webasto AG: "Ideen aus der zweiten Reihe" - Strategien für kundenorientierte Innovationen in der Automobilindustrie

4. Dezember 2007, 19:15 – 21:00 und anschließender Network-Empfang
RWTH Aachen, Karmann-Auditorium, Raum FO 5 (Templergraben 62 gegenüber RWTH Hauptgebäude, 1. Stock

Abstract:
Open-Source-Software ist nicht nur ein technisches oder gesellschaftliches Phänomen, sondern das dahinter stehende Wertschöpfungsprinzip erweitert herrschende Prinzipien im Innovationsmanagement zum Teil völlig – auch in anderen Bereichen jenseits der Software-Entwicklung. Auf dieser Veranstaltung soll anhand aktueller Fallbeispiele diskutiert werden, wie durch eine solche Open Innovation Effizienz und Effektivität der Neuproduktentwicklung gesteigert werden können.

Kernidee von Open Innovation ist, eine Aufgabe nicht an den "besten" bekannten internen oder externen Entwickler zu vergeben, sondern das Problem in einem offenen Netzwerk in Form eines breiten Aufrufs zur Mitwirkung auszuschreiben. Potentielle externe Problemlöser entscheiden dann durch Selbstselektion, ob sie mitwirken oder nicht.

Im Mittelpunkt stehen dabei Strategien von Unternehmen, die ihre Kunden bzw. Nutzer nicht mehr als nur passive Empfänger und Konsumenten einer von Herstellern autonom geleisteten Wertschöpfung sehen. Vielmehr treten Nutzer als Wertschöpfungspartner von Unternehmen oder anderen Nutzern auf, indem sie Produkte oder Dienstleistungen mitgestalten und teilweise sogar deren Entwicklung und Herstellung bestimmen oder übernehmen.

Bei allen Potentialen von Open Innovation zur Effizienzverbesserung in der Entwicklung stellen sich jedoch auch neue Herausforderungen. Open Innovation ist nicht einfach ein "Outsourcing" interner Entwicklungsaufgaben an die Peripherie, sondern verlangt eine aktive Beteiligung durch den Anbieter, der hierfür bestimmte Ressourcen und Fähigkeiten besitzen muss.

Dies zeigt eindrucksvoll das Beispiel der Webasto AG, einen führenden deutschen Automobilzulieferer. Eine Neuausrichtung des Webasto-Innovationsmanagements betont entscheidend das Potential von durch Endkunden generierte Produktideen im Entwicklungsprozess. Die so entstehenden Produkte verfügen über einen echten Mehrwert, worauf Webasto als Automobilzulieferer mit überwiegend Sonderausstattungsprodukten eminent angewiesen ist. Generell wird es bei der Vermarktung von Sonderausstattungen zukünftig noch wichtiger werden, einen echten Endkundenmehrwert klar vermitteln zu können.

Dazu entwickelte Webasto zum einen eine umfangreiche Workshop-Methodik, mit der Kunden und potentielle Nutzer in die ersten Phasen der Produktentwicklung einbezogen werden. Zum anderen nutzt das Unternehmen ein interaktives, webbasiertes Tool, mit dem die Bewertung und Speicherung von Ideen vereinfacht und standardisiert wird.

Neben den Ideen, die aus den firmeninternen Quellen sprudeln, ist es hier nun auch möglich, systematisch „Endkundenideen“ mit in die Bewertung aufzunehmen. Dies ist der letzte Baustein, der die Lücke zwischen Zulieferer und Endkunde schließt. Im Vorfeld wurde eine Methode entwickelt, die es ermöglicht, aus einer beliebigen Gruppe von Endkunden mit Hilfe eines eigenen Testverfahrens so genannte "Lead User" zu identifizieren, die dann in mehrtägigen Workshops gemeinsam mit professionellen Moderatoren völlig neuartige Ideen generieren. Der Unterschied zur Gewinnung von Ideen durch die hauseigene Entwicklung besteht in der strukturierten Vorgehensweise, die immer zuerst ein Endkunden-Bedürfnis identifiziert, bevor Funktionen daraus definiert und schließlich in Produkte überführt werden.

Die Veranstaltung basiert auf gemeinsamen Forschungsarbeiten der Referenten, die durch die Stiftung Industrieforschung im Rahmen eines aktuellen Projekts unterstützt werden.

Udate: Crowdlogoing the New Spreadshirt Tagline: New Design Competition Launched -- and finalized

(Update of the original posting from Sept 2007 -- now with the project's final result at the end of this post!).

Hey, you designers of the world. Treat me nice: I am on the panel of the new Spreadshirt Open Logo competition :-). Coined the Open Logo Project (OLP) 1.6, this is the second time that the company has started a crowdsourcing contest for its new logo. Anyone can submit a draft logo for comment and evaluation by an expert panel, other designers and the Spreadshirt community. Each week during the contest, the top entries will win awards and a place in the overall grand final.

The last contest (hosted 1.6 years ago) received over 1000 submissions from more than 600 designers mainly in Germany and France. This time, the entire world shall participate. The contest will run from the 27th August - 14th October. To take part in the contest - with submissions, comments, voting or just lurking - head to http://olp.spreadshirt.net.

Every branding textbook, however, will tell you not to change your logo every two (or even 1.6) years. But “…this is not a publicity stunt," said Jana Eggers, Spreadshirt’s new CEO. "We found a tagline that better represents what we do, and now is the right time to change our current logo to support it".

The new tagline, resulting from working with an international branding firm: "Your own label" shall reflect Spreadshirt's mission to be "the world's creative apparel platform". After deciding on the new tagline, the natural step for Spreadshirt was to turn to its community again for a logo that better supports the new tagline.

The cool thing: Adam Fletcher, who is coordinating the competition at Spreadshirt, even allowed me to pick my own prize. So: I will award a first price for the most innovative design, one, that really demonstrates uniqueness and out of the box thinking. And this price will be truly innovative and unique as well: You can win an entire mass customized outfit. More on the website!

But beyond the innovative prices, also the OLP idea competition itself has some nice features which make it a great example of open innovation and sets it ahead to other design contests on the web:

They have ten different awards and prizes for different categories which also honor not only WHAT, but HOW you design, awarding good competition citizenship. There are prices for community involvement, memorability, branding excellence, etc …

This also allows Spreadshirt to think of those that offer input but can't design (I would be a perfect candidate for this). Anyone who actively contributes to the OLP community by ratings, commenting, offering feedback, starting discussions etc can win one of every shirt that Spreadshirt’s “La Fraise” prints for the next year (should be around 100 shirts – so if you win, buy a new closet).

"We [want] to recognize out-of-the-box thinking, collaboration, community favorites and more," adds Adam Fletcher. "Even if you're not the winning designer, you can scoop a number of other prizes, or just waste a lot of your time, learn a lot from looking at the work of the other designers."

For real winning designers, they also provide more than cash, but help with the most valuable good for artists, recognition. Along with a MacBook pro and €3,000 cash, the winner will be featured with a photo and an interview in he “Computer Arts” magazine, an interview on “Computerlove” and a permanent “thank-you-page” at Spreadshirt.com

So, now get your creative fluids working … and submit a nice logo so that I have something to judge next week !!

------------

UPDATE: The project is over -- and it was an interesting experience for me to be on the panel of such an open innovation competition. Here some observations:

First: The winner: While Spreadshirt selected two first prices for their new logo (see the designs here) and is now working with the community on improving the designs. My personal short list looked a bit different, see it here.

Second: My winner: As written above, I could award my very special price for the most innovative design. My clear favorite was Labelhead, not just a logo but an entire logo configurator. Here is my long description why this is the most innovative (and in any case customizable) logo! (and this posting also gives you a rare view of my living room :-)

Third: Participants of an open innovation project get engaged and personal: The entire competition drew more than 2800 entires, generated millions of hits and views, a lot of postings and good press for Spreadshirt -- and did not cost really too much compared to the cost of getting a professional new logo (and PR campaign) from a regular agency (cost were about 10 K Euro for prices, Adam Fletcher's salary of running the contest, and some web site programming etc ..). The best insight into the enthusiasm and engagement of the participants can be found in the comments to the posts, just browse through some of the winning designs or see the comment on the selection of the winners (example).

For me, it was was interesting to read what people really thought about my selections (more comments here). I think I really do not look like a designer or pretend to know much about graphic design -- my task was to provide a business and customization perspective for the panel. But participants expected my real feedback on their designs ... learning_ pick panelists that really know what they are writing about.

Fourth: I learned a lot about customized toilets :) See comments in the middle of this stream.

Open Innovation Widget -- Fellowforce creates open line between users and companies

As of today organizations can integrate an widget into their websites to enable consumer-generated innovation, a solution to solicit ideas, suggestions and innovation proposals.

The widget has been developed by FellowForce. Their founder and Head of Marketing, Ruben Robert, will be a presenter at the MCPC 2007 conference.

In a press announcement, Jeff Crites from Fellowforce North America explains:

"We started our platform for Open Innovation two months ago, and since then we've received ideas and suggestions for leading brands worldwide. The idea for this new service is due in large part to a submission in our own innovation box. A Fellowforce 'Fellow', Marcel Heinkens of the Netherlands, suggested we offer an Open Innovation widget for websites. Today, four weeks later, we're introducing the 'Innovate Us' button, enabling any business to welcome ideas from a global force of innovators".

The 'Innovate Us' button is like a 'Digg-this' application for innovation, empowering and encouraging consumers to submit ideas to company controlled (Fellowforce enabled) innovation boxes. "We prefer to call them Innovation Boxes because consumer participation is more than just a feedback tool", adds Crites, "it's a driver for innovation. And for companies, this is like having a souped-up RSS aggregator to manage idea feeds."

What is the effect of such a widget?

Well, I think it is not largest innovation of innovation. But it is a great signal that companies are taking their users more and more seriously. Companies are making a statement that they believe in open innovation and value ideas from the outside. And I am curious to hear on Ruben's MCPC 2007 presentation how this will
work out.

Context: Have a look in the updated MCPC 2007 program to find more then 20 other presentations on open innovation: http://www.mcpc07.com/draft_program_MCPC2007.pdf

Threadless in Numbers

Rob Walker finally reports in his ‘Consumed’ column in the New York Times Magazine on Threadless, and finally I recognize (thanks to Exciting Commerce) this article that already was published on July 8. Rob’s column is one of my favorite pieces of journalism, but since I returned to Germany, I do not find the time to read it every week.

While in an e-mail conversation Rob told me about 1.5 years ago that he does not consider Threadless as a unique phenomenon, he – luckily – changed his mind and brings a nice analysis of the company and shares with us a number of interesting numbers on Threadless. So here is Threadless in numbers (all quotes from Rob's article)

2000: Year of founding Threadless.

125: Number of submissions received by Threadless each day.

“Millions”: Dollars earned by selling T-shirts” not by hiring star designers but by asking anybody to design them.

Hundreds of thousands: Number of user voting each day.

6: Number of new T-shirt offerings per week.

1,500: Typical size of a batch of each new design.

2,000: Dollars paid to winning designers.

“Almost everything”: Number of items that sell out.

1: Number of Threadless stores, the first opened in the Lakeview neighborhood of Chicago in July 2007.

2.6 or higher: Score of most winning designs (on the rating scale from 0 to 5).

2.0: Lowest rank of a winning design.

x*n/z: “The final decision about which T’s actually get made and sold has always involved a bit of nonpublic number crunching. For example, Threadless looks at how many 0s and 5s a design gets; designs that inspire passionate disagreement often get printed because they tend to sell”.

1: There is a surprising degree of consistency — maybe even similarity — in the designs. “It’s a barometer of what’s going on in art and design right now,” Threadless director Kalmikoff suggests.

17: Number of winning designs submitted by Glenn Jones, a New Zealand designer.

Context:
- Rob Walker’s NYT Magazine article on Threadless.
- My original report on Threadless (includes many more links with reports).

Assignment Zero Interview on Mass Customization, Crowdsourcing, and the Demand for Change Management

Dave Butler and I talk about the latest trends in mass customization, crowdsourcing, and why this all depends from the ability of firms to master change

Assignment Zero is a large project on crowdsourcing journalism. Inspired by the open-source movement, Assignment Zero is an attempt to bring journalists together with people in the public who can help cover a story. It's a collaboration among NewAssignment.Net, Wired, and those who choose to participate. Facilitated by Jeff Howe, the Wired reporter who coined the phrase crowdsourcing, and coordinated by editor David Cohn the project wants to create a repository of the state of the art of the crowdsourcing movement.

This is how Assignment Zero works:

“The investigation takes place in the open, not behind newsroom walls. Participation is voluntary; contributors are welcome from across the Web. The people getting, telling and vetting the story are a mix of professional journalists and members of the public -- also known as citizen journalists. This is a model I describe as "pro-am."

The "ams" are simply people getting together on their own time to contribute to a project in journalism that for their own reasons they support. The "pros" are journalists guiding and editing the story, setting standards, overseeing fact-checking, and publishing a final version.

In this project, we're trying to crowdsource a single story, and debut a site that makes other such reports possible down the road. But we don't know yet how well our site and our methods work. Our ideas are crude because they are untested. By participating, you can help us figure this puzzle out.

… Assignment Zero is a starting point, a base line. Who knows where we will end up. But if reporting in the open style ever comes into its own -- at our site or someone else's -- that might very well change journalism and expand what's humanly possible with the instrument of a free press.”

The project’s web site is a huge, although sometimes confusing to navigate, collection of links, definitions, articles, and interviews on crowdsourcing.

The interviews form the core of this project. The community identified a few tens of people worldwide who contributed to crowdsourcing by either starting one of the projects or businesses utilizing this concept, or by thinking and writing about it. I am very proud that I was identified by this community as one of those 50 persons who matter most in crowdsourcing.

Now, this interview with me on crowdsourcing has been published in full length online. An abbreviated version may also end up in an upcoming Wired magazine article on the topic. In this long interview, we talked about a number of exciting topics, including:

- What is crowdsourcing 2.0?
- How do business-to-business (B2B) relationships change as a result of crowdsourcing?
- What is the major roadblock to crowdsourcing? What is the largest hurdle?
- What is the new function of a company when its core activities can be crowdsourced to its periphery?
- Why does crowdsourcing demand change management?
- What is the connection between crowdsourcing and instant companies?
- In an interview with mass customization pioneer Joseph Pine, Joe noted that Henry Ford was the father of mass production, but Michael Dell is the Henry Ford of mass customization. So who’s the Henry Ford of crowdsourcing?

As described before, interview assignments are crowdsourced. Contributors select their favorite subject from the list of interview partners, and contact the person to be interviewed. In my case, I had the pleasure to speak with Dave Butler of WorkLife, a consultancy that has a great twist on customer integration: Integrating employees in corporate change processes by theater and cultural experiences.

This is a less covered application of applying the principles of integrating the periphery in value creation. Don Tapscott has a very good chapter about this mode in his book Wikinomics, and David Butler is living this in his consultancy. He combines his initial career as a professional actor and stage director with his extensive experience in personal and corporate transformation initiatives.

So if you want to read extensively what David and my thoughts are about the recent state of mass customization, crowdsourcing, open innovation, and customer integration, read the full interview here.

Context: Other great Assignment Zero Interviews on Crowdsourcing with:
- Lawrence Lessing on Creative Commons
- Howard Rheingold on virtual communities,
- Sydney Poore aka FloNight, a Wikipedia super-contributor, and Jimmy Wales, WikiPedia founder
- NYTimes.com Design Director Khoi Vinh on MicroStock Photography
- Alpheus Bingham, co-founder of Innocentive
- David Lionel, founder of Crowdspirit
- Eric von Hippel and Karim Lakhani on User Innovation

All interviews are published under a Creative Commons license, and are available for re-use in your own texts, as editor David Cohn writes:

"The reporting found in this blog can be mixed and mashed to write your own story on crowdsourcing. Perhaps you want to write about a specific topic -- there are plenty of interviews that cover microstock photography, open source movies, conferences, etc. Or for a real challenge, try to write a big feature that encompasses all the different aspects of crowdsourcing."

User Manufacturing and Crowdsourcing in New Zealand: How Ponoko enables creative users to create, manufacture, and sell digital products online

Ponoko is a user manufacturing platform based in Wellington, New Zealand, where anyone can click to make, buy and sell digital products. Users upload designs, Ponoko manufactures them for them using rapid manufacturing technology, and send the result to users. If they like and approve the result, users then can start to sell their designs (and products) to others using Ponoko’s online shop and distribution system. And as in many ventures, the initiator of the business was a frustrated user who could not buy what he wanted to fulfill his needs. After reading about the idea of personal fabrication by Neil Gershenfield at MIT, a business was born.

I asked Dave ten Have, Ponoko's founder and CEO, to describe how the company was founded and what the team wants to achieve. With the help of Steven Kempton , Ponoko’s chief blogging officer, the following guest article came in:

Ponoko was founded on the idea that making or buying individualized products shouldn't be so complex, time-consuming and at a high cost, both financially and environmentally. It should be an enjoyable experience, where you can focus on the design and not be overly limited to what resources, materials or tools you may or may not have or know about.

The idea for Ponoko came from software entrepreneurs Dave ten Have and Derek Elley, both of whom have made a number of things where each experience left a sour taste. A particularly disappointing project was Dave's experience in designing some wall art - a skateboard shape made of dark rich wood with mother of pearl inset designs. This small project took way too much time than Dave had anticipated – two years in fact. It took an incredible amount of phone calls and emails to multiple parties (mostly engineers who didn't have an interest in creativity/art). In the end, it cost a huge amount for an unpleasant making / buying experience – and when it turned up, it was wrong and had to be sent back. The worst part was having to go through the horrid process all over again. (You can see Dave's personal blog for pictures). After this and other disappointing experiences in making individualized projects, they founded Ponoko.

Encouraged by the rise of the Internet connected 'creative-class' along with smarter, faster, smaller and cheaper digital manufacturing hardware (laser cutters, CNC routers and 3D printers that connect to your everyday PC), Dave and Derek formed a plan to solve these problems. They started with the premise that the personal computing and the personal manufacturing industries have strong parallels, realizing that one day everyone will be able to create and make any product from their own home. This led to the idea of mass-individualized products created by the Web community and made on a globally distributed network of manufacturing hardware controlled from any PC.

Today's product making and distribution model is financially and environmentally unsustainable. It's also under pressure to digitize like the music and video industries have. Because today's 100-year old product making and distribution system is so ingrained into our every day lives and delivers so much benefit, problems are not so obvious. But when was the last time you made something?

Making products today does not come easy – some major problems exist:

* Making and delivering (individualized) products is a time consuming, complex and expensive process. This pain does not fit well in a world that is increasingly in demand for instant satisfaction from mass personalized and customized products at low cost.

* Product making and distribution is cost prohibitive for new entrants without relatively deep financial reserves. This is stifling mass creativity of real products and the progress of humanity on unimaginable fronts.

* Low cost mass production and global distribution relies upon using lots of cheap energy and labor. But these two resources are running out.

* Product making and distribution is a major contributor to the global warming problem (according to the WRI, perhaps 20% of the problem). Being environmentally unsustainable, the increasing 'carbon currency' costs also make the current model financially unsustainable.

* Finding individualized products is very difficult and buying such products is a time consuming, relatively complex and expensive burden. Why is there no easy to find supplier of low cost personalized products?

These pressing problems illustrate that a new product making and distribution process is required. Our solution is made possible given the rise of the Internet connected 'creative class' along with digital manufacturing hardware (laser cutters, CNC routers and 3D printers that connect to your everyday PC), and production materials.

The idea of Ponoko is to address these challenges and to deliver the future of product making and distribution to the mass market, today. Ponoko shall deliver the following benefits:

Less risk. On-demand design and manufacture is made possible, so work does not need to be commenced until a consumer makes a purchase. And because product designs can be sold to a large global audience from day one, pay back periods can be shortened.

Lower costs. With Ponoko, creators can now ship digital product designs with the click of a mouse, not physical products requiring a pocket full of cash. This is Apple iTunes for products, but with YouTube style user-generated content.

Instant scalability without cost. Ponoko's distributed manufacturing model means the creator's cost and time frame to manufacture a product for 1 customer is the same as for 1 million customers. Creators can sell millions of products on-demand at 'no' extra cost.

Increased control. Ponoko is specifically designed to provide end-to-end visibility & control over the entire product making and distribution process.

Less complexity. By connecting creators direct with consumers, the traditional supply chain complexity involving a manufacturer, distributor, wholesaler and retailer is eliminated.

But also for consumers, the system has a number of benefits. The main advantage are low cost individualized products. Because no physical product exists until purchase, product design collaboration makes it possible for everyone to co-create and personalize 'almost anything' they need & want. As adoption increases, prices for Ponoko's design-to-order and made-to-order commodity type products will become unrecognizably low.

We are in beta phase at the moment, so if you're interested to find out how this all works and to help us make it the best making/buying experience you've had, please sign up.

Context:
- Ponoko Blog
- Previous posts on the user manufacturing trend
- Neil Gershenfield on personal fabrication

Nike is Trying Threadless' Crowdsourcing Model

More Co-Creation at Nike

Coolhunting has an interesting small report on an upcoming NikeID project: They are offering their top-end (fashion) shoe, Nike Air Force 1, in a special co-design version. Starting 6 March 2007, users can design a custom Nike Air Force 1 using the NikeID configurator (how it works in detail). Designs are exhibited on the web, other users vote on the winning designs, and the winning design will then be specially made only for the winner, complete with bling sneaker jewelry.

For this project, Nike is collaborating with Sneakerplay, a social networking site of sneaker enthusiasts (only Sneakerplay members can particpate). While this sounds a bit like Threadless' collective customer commitment (crowdsourcing) model, it is different:

Nike takes the community, co-creation, and community evaluation idea, adds an easy-to-use toolkit to enable easier co-design (at Threadless, you have to know Photoshop), but then produces the winning design in a custom manufacturing step just for the winner.

[UPDATE: Just after I wrote this post, Bill commented on this post, saying that this is a good old design contest and not a new crowdsourcing model. And I agree! ]

Why not for everyone? Don't ask me ... it seems to be more like a clever PR pilot then a new business model. But at least it is a start and great idea to live their new "The consumer decides" philosophy with a different twist.

The next customization trend: Gadget Tattoos -- and how you easily can participate

I was pretty busy with my university job in the last weeks, and so I missed this really interesting story that Springwise reported last week, but that has been around some weeks longer. It is a nice example for this blog as it perfectly mixes its two main trends: mass customization and open (source) innovation:

Adafruit offers custom laser etching of laptops, iPods, phones, cameras and more. Among the hip tech set, laser etching is a next step--somewhere after stickers and custom Timbuk2 laptop messenger bags—focusing on personal flair on top of a laptop, not just it screen (how cool is that: synchronize your desktop image with your laptop case).

Adafruit currently operates in New York and is planning to set up a location in San Francisco early this year. Customers can have a small gadget etched for USD 30, and a laptop for USD 100. Bulk rates and services are available to businesses. To open such a business, is not too difficult: Just get an etching machine, some training and let the crowd come. And it is even easier.

Adafruit is a company with an open source business model: It freely shares its business model with other entrepreneurs interested in setting up a customization shop. The company was launched by Phillip Torrone, senior editor of Make magazine, and Limor Fried. The laser etching machine used by Adafruit is an Epilog, priced at around USD 20,000 and capable of doing highly detailed etching (1200 dpi). If a group of interested etchers organizes in a group to buy the machines in a larger batch, they should be able to make a head start by getting the machine's price down.

So f you're interested in setting up your own laser etching business, contact Adafruit at laser@adafruit.com.

More information:
Video: one.revver.com/watch/122276
http://news.com.com/2100-1041_3-6143072.html
http://www.techmeme.com/061212/p70#a061212p70

InnoCentive launches nonprofit unit: Crowdsourcing solutions for the world's problems

Now this is a good idea: Innocentive, one of the major examples of crowdsourcing innovation using the principles of "interactive value creation", today announced that it has teamed-up with The Rockefeller Foundation to launch a "nonprofit" application of its distributed innovation tool.

InnoCentive should be known to most readers of my blog, even if I never reported extensively about them (as they are not based on the input of customers or users): In brief: Innocentive is a company based here in the neighborhood of MIT that specializes in matching scientists with corporate clients to solve research and development problems.

It has been shown that this "broadcasting" of problems instead of seeking for a problem internally is a highly efficient mechanism. So using it not only for commercial firms, but to generate science and technology solutions to pressing development problems, is a great idea.

The non-profit Rockefeller Foundation area on InnoCentive's scientific platform will bring to bear the talent of thousands of world-class scientists, innovators and entrepreneurs in solving the most pressing and complex humanitarian challenges posed by non-profit entities selected by the Foundation.

Under the agreement announced today, The Rockefeller Foundation will select non-profit entities and others with charitable intent eligible to use the InnoCentive platform under preferred conditions, and will pay access, posting and service fees on their behalf to InnoCentive, as well as challenge awards to those researchers solving the technology problems the non-profits pose. The Foundation will launch a new area on its own Web site, www.rockfound.org, to recruit and screen organizations seeking this subsidy to use the InnoCentive platform.

The new agreement is the first step in a larger Rockefeller Foundation initiative aimed at promoting innovation in a manner that spurs development, and that specifically increases access to proven innovation models for work on behalf of poor or vulnerable populations around the world. In some cases, the initiative will also help to advance access to, or distribution of, specific innovations that can be of important benefit to poor or vulnerable people.

The foundation will screen the problem seeker and pay for that company to register on the Web site. If a problem solver is matched with the seeker, Peter Costiglio, director of communications for foundation said. The foundation would then fund the award for the problem that's solved, provided that it is solved satisfactorily.

"It is difficult for us to give a specific dollar amount in terms of what type of funding we're talking about," said Peter Costiglio. "What we want to do is have problem seekers matched with problem solvers. This is a platform to enable that to happen."

I think this is a very promising new approach for solving social problems. It has been shown that many solvers at Innocentive are motivated by the spirit of solving the problem as much as by the cash reward. Working on a social problem may spur this behavior. This seems a much better model to find answers for fields where commercial solutions will not come up easily (as the market potential is too small, as, e.g., in the field of Malaria treatment) then the usual direct funding structure.

Finally TIME got it: YOU are the person of the year -- and why Chrysler did not get it

Time Magazine annually claims a "person of the year", and this year it is not Bill Gates or Stalin, but YOU – the creative consumer. While the statement of this claim is more than true and indeed one of the main trends in 2006 (and the topic of this blog and newsletter since 1997), it is not too original.

Business 2.0 run a very similar cover story half a year ago, and before, the Economist and Business Week had similar covers stories in 2005. The article in Time about the story has nothing new, so no further quotes required (even if it really generated a lot of excitement in the blog world, and also many other papers reported about it, like this report in the Spiegel).

But what is much more interesting is this side story. If you want to read the Time article online, you can do so for free, but there in an advertising page first. It features a spot by Chrysler that is supposed to be humorous. It's tag line is "You might be not the person of the year, but you still can drive like one with the Chrysler XYZ". So much about fast response and the need for a new kind of advertising ... Very 1990s.

Context:

Exciting Commerce Blog says User Manufacturing is one of the top topics for 2007

Communities Dominate Brand Blog report about the Time story

And this is a great TIME cover creator – show it your grand ma, she will be impressed!

Buzzword Collection: Wikinomics Is the New Crowdsourcing

Don Tapscott has been one of my favorite authors for a long time with regard to everything on the digital economy. Finally, he is also jumping on the co-creation and crowdsourcing trend and comes up with a new book on the topic with the wonderful title 'Wikinomics: How Mass Collaboration Changes Everything'. Together with co-author Anthony Williams from New Paradigm, a think tank focused on business innovation, the book promises to provide an easy-to-read discussion along the line of Benkler's Wealth of Networks thinking.

The book will be published at the end of the month, and once I have it, I will post a review. But I already wanted to provide you today one more buzzword to impress your colleagues at the next holiday party: The next trend in business is Wikinomics.

From the announcement of Wikinomics:

"Smart firms can harness collective capability and genius to spur innovation, growth, and success. ... Wikinomics builds on this research elucidating a new age where thanks to the Web 2.0 masses of people can participate in the economy like never before—creating a TV news story, sequencing the human genome, remixing their favorite music, designing software, finding a cure for disease, editing a school text, inventing a new cosmetic, or even building a motorcycle."

Along the promised case studies, only the first in this list is new to me, but sounds very interesting:

• Rob McEwen, the Goldcorp, Inc. CEO, former investment banker, and gold mining newbie, who used open source tactics and an online competition to breathe new life into a struggling business cobbled by the rules of an old-fashioned industry.

• Flickr, Second Life, YouTube, and other thriving online communities that transcend social networking to pioneer a new form of collaborative production that will revolutionize markets and firms.

• Smart, multibillion dollar companies like Procter & Gamble that cultivate nimble, trust-based relationships with external collaborators to form vibrant business ecosystems that create value more effectively than hierarchically organized businesses.

There is also a web site with some more information. And Dan Farber of ZDnet has a video interview with Don Tapscott.

User Manufacturing: Amazon's Next Twist: Will the Online Retailer Become a Key Enabler of User Manufacturing?

User manufacturing as an alternative model to mass customization – and how this can become the next big trend of user-driven value creation

User manufacturing is an alternative (or supplemental) idea to mass customization, building on the notion that (some!) users are able not only to configure a good within the given solution space of a manufacturer, but also (at least partly) to develop such a solution space by their own. And then transfer their individual creations in a product.

Consider a PC: Most of us are now used to the idea to mass-customize a PC using an online configuration toolkit as, e.g., Dell offers it. Here you can just select what the manufacturer has already provided. Indeed, a main task of a configuration toolkit is to exactly ensure that a custom configuration meets the pre-developed manufacturing specs and design of the producer.

But there are also some more extreme users that really build their own, very custom PCs. They do not just configure what a manufacturer has done, but really craft very individual PCs (see the projects at pimprig.com to see what I mean). In this industry, the actual manufacturing is not too difficult, as PC architectures are modular and build to be interchangeable. But you still need some skills and dedications to do so.

Here now the idea of user manufacturing starts: I have included this within the last year or so frequently in my talks and lectures, but have not blogged too much about it yet. But this posting is the start of a series of articles to formulate this idea better:

User manufacturing (perhaps there is a better term?) is a business model were users (customers) are becoming not only co-designers, but also manufacturers, using an infrastructure provided by some specialized companies.

[Update] User manufacturing is enabled by two main technologies:

(1) Easy-to-operate design software that allows users to transfer their ideas into a design without much experience in how to operate a CAD software. eMachineshop's software is a good example for this (see below). Eric von Hippel called this tools "toolkits for user innovation": Think of mass customization configurators with a much broader solution space.

(2) Easy-to-access flexible manufacturing technology. New manufacturing technologies, first of all rapid manufacturing (e.g., laser sintering or 3D printing) enable users to transfer their ideas into concrete objects -- even of they are no pure digital products. Laser printers made publishing possible for anyone (combined with DTP software to design the stuff). Similarly, future manufacturing technology will make the manufacturing of physical goods possible for everyone.

Well, perhaps not everyone but everyone interested and involved enough with the product to invest the time in the design and manufacturing. At the beginning, user manufacturers will show lead user characteristics, i.e. users that really are ahead of a trend with regard to an application and who really hope to benefit from getting a specific product design. With a continuous improvement of tools and manufaturers, however, user manufacturing will turn mainstream.

This also allows (expert) users to set up an instant company that designs, makes and globally sells physical products could become almost as easy as starting a blog or creating an eBay store — and the repercussions would really change the way we still think about manufacturing today.

In such a world, "user-generated content" would not solely refer to media (blogs, citizen reporters, YouTube movies etc.) but to just about anything: user-generated jeans, user-generated sports cars, user-generated candy bars.

Some examples:

In the world of printed goods, user manufacturing is pretty much established: Companies like Lulu.com enable everyone to become their own publisher and provide publishing and fulfillment infrastructure that up to a few years was only of the hand of a few specialized, huge publishing houses.

eMachineshop.com is a great venture that provides full-scale manufacturing capacity to everyone. Over the internet, users can here access the entire infrastructure that before was only available for "real" manufacturwrs, or demanded complicated and transaction-cost intensive search process for local job shops. But with a very flexible toolkit at eMaschineShop, users now can design their own components and place them on diverse manufacturing outlets.

A similar idea has Big Blue Saw. The company was founded by Simon Arthur, who, as a hobby and later job, build fighting robots for Battlebots, the Robot Fighting League and other robotic sporting events. Doing this, he thought about ways to make it easier for inventors, artists, and hobbyists to create anything using modern machining technology. Big Blue Saw is the result. Its customers can upload their designs to their website. We then make these designs come to life in metal and plastic through the use of advanced robotic machining technology like waterjet cutters.

These companies are doing something really new: They provide technology that before demanded high investments and operating skills not to everyone. Well, everyone that really knows to design and assemble.

To increase the potential of user manufacturing, some other companies come in. They offer not only manufacturing, but also some supporting services. And actually provide a product, but not only components. Consider Crowdspirit. This company tries to provide everyone the capability to become the make of next ipod. Their focus is electronic manufacturing. Springwise recently reported about this idea :

What blogs, citizen journalism and YouTube have done for media, CrowdSpirit hopes to do for product development. ... How it works: Inventors submit ideas for innovative new products and contributors submit problems for inventors to work on. Members vote, define a product's specifications, and can invest money to finance development. After a first prototype has been created, selected members test and help fine-tune in cooperation with manufacturers. Once the stage of product development has been completed, contributors continue to be involved, for example by acting as a product's ambassador and promoting it to retailers, or by providing product support, like translating instruction manuals.

CrowdSpirit's primary focal point is electronics with a market price below USD 190. If all goes well, this will be followed by more expensive electronics, and other sectors as the concept develops. A selection of inventions will be launched in parallel, so that the community can work on several projects at the same time.

And now Amazon:

In an interesting article (thanks to MIT colleague Ethan Mollik for this link!), USA Today technology reporter Kevin Maney places the known activities of Amazon to let others use their infrastructure in the new light of user manufacturing:

"Point, click, make a product to sell to the world ... That's the future Amazon.com CEO Jeff Bezos hopes to set in motion with the company's new direction. If you tease out Bezos' plan, you get to a point where a high school cheerleader sitting at home with a laptop could theoretically harness computing power, design capabilities, manufacturing and distribution from around the world, and make and market a cute little pink hot rod that would compete against General Motors.

... You can rent space on Amazon's computers to run a business, or rent out its transaction capabilities to sell things and collect money, or rent pieces of its warehouses and distribution system to store and ship items — or all of the above. So, with almost no start-up costs, anyone anywhere could become a retailer. It's not just contracting with Amazon to sell your stuff, the way Target does. It's leasing pieces of Amazon to create something totally unrelated to Amazon. ...

What's new about Amazon is the leap to physical products. This might be one of those evolutionary milestones, like when the first fish crawled up on land, or Jimi Hendrix discovered feedback on his electric guitar and altered the path of rock music.

Amazon's platform will be the first to include physical distribution. "You could notify us to expect inventory from you, tell us when to pick it (from warehouse shelves), and we'll send it to any address," Bezos says. "We've spent 12 years getting good at these things, so why should somebody else have to start from scratch?"

Bezos' idea cracks open an intriguing can of worms. Why shouldn't an established manufacturer do the same, leasing out factory space and industrial design teams and its expertise the same way? Sure, there are limitations. Factories aren't as flexible as warehouses or data centers, which can handle business from just about any industry. So a manufacturer's markets would be narrower. ...

Maybe this trend would not be such bad news for GM. It has excess capacity and nearly 100 years of manufacturing expertise. If it created a carmaking platform, GM could enable the creation of dozens of new niche-market car companies, all using GM to make and distribute their designs."

As Kevin Maney observes, this model is not far afield from today's contract manufacturers in Asia, which make batches of cellphones or toys or shoes on demand for Western brands. User manufacturing would transfer this model to everyone in much smaller batches, using rapid manufacturing technologies and easy, but flexible design tools.

Just imagine what would be possible if Amazon would add to its shared online-selling and distribution capabilities some physical manufacturing capacity as, e.g., offered by e-machineshop (they do this already in the context of book printing with print-on-demand). Then we all could design, click and manufacture a product to sell to the world. Welcome to the world of user manufacturing.

Context information:

- The Elite Vintners wine customization toolkit can be interoreted in this way: This is not a real configurator (as much too complex), but more the provision of the infrastructure of a professional vinery to everyone.

- Spreadshirt, Cafepress and Zazzle enable user manufacturing within a bit more constrained solution space in the fashion industry. They allow much more than the usual t-shirt configurations.

- Tim O'Reilly characterized recently Threadless as a model of user manufacturing, but I disagree. This is crowdsourcing of design, but otherwise a more traditional (if revolutionary) business model. But Tim has a number or other good examples in his post.

- The review of the history of mass customization by Donal Reddingtion also makes this bridge from mass customization to more active users.

- And researchers of user innovation like Eric von Hippel have always noted that innovative (lead) users, who find no manufacturer that would produce their idea, turn themselves into manufacturers. Lead users, however, had to build their own manufacturing capabilities. Here is a great study by Eric with Christoph Hienerth and Clariss Baldwin about this area.

- Books: Neil A. Gershenfeld: FAB: The Coming Revolution on Your Desktop--From Personal Computers to Personal Fabrication. And in GERMAN: Andreas Neef: Vom Personal Computer zum Personal Fabricator, a book on fabbing, rapid manufacturing and new flexible manufacturing technologies.

UPDATES:

- If you live in Singapore, joint this workshop exactly to the topic on Feb. 27, 2007: http://genometri.com/DIY/

- Paul Krush reports his story of opening a user manufacturing service bureau in his new blg.

Donal Reddington on Customerism: Great Analysis of Recent Developments Along the Active Customer

Many of you will know the great blog of Donal Reddington, who regularly reports about developments, company announcements, and new technologies in the mass customization and personalization domain.

Recently, he posted a great feature on "Customerism", explaining different recent trends in business and technology seem to be converging into a new business model, that includes mass customization but also user innovation, crowdsourcing, and other developments.

His main arguments in brief (but read the entire post – there is also a great picture summarizing his thoughts):

Customer Empowerment: "The idea of empowering customers with a higher degree of control over their relationship with business has gained widespread acceptance. Various terms have been devised to describe different approaches or strategies that empower the customer."

The Rise of Mass Customization & History of Product Configuration: "The major impediment to wide adoption of mass customization in the early 1990's was the absence of an efficient communication channel for customers to describe their requirements. But than, the right tools cane up: The Product Configurator. My research suggests that the earliest work on what would be considered a product configurator was carried out by Ron Brachman at Harvard University in 1977. ... In the mid-1980's, Brachman worked at the Artificial Intelligence Principles Research Department at American Telephone and Telegraph (ATT) which developed the PROSE product configuration system for use in the telecoms industry. A few years later, unrelated research by Tim Berners-Lee would produce the first web-browser. By 1996, Dell had combined these two technological innovations into the first web-based product configuration system, that would allow anyone to specify their requirements when purchasing a computer."

Micro-Manufacturing: "The first examples of how mass customization could be the catalyst for new business models came about at the turn of the Century, with the launch of two companies: Zazzle and CafePress. Both of these companies offered conventional personalization of everyday products ... However, the most important aspect of their business was that they were also 'micro-manufacturers'" – allowing creative users to sell their creations to others.

User Innovation: "Ideas about involving the customer in the innovation process had been around since the late 1980's, … devised by Eric Von Hippel at the MIT. Von Hippel discovered that most products and services are actually developed by users, who then give ideas to manufacturers. This is because products are developed to meet the widest possible need; when individual users face problems that the majority of consumers do not, they have no choice but to develop their own modifications to existing products, or entirely new products, to solve their issues."

Crowdsouring as an alternative model of MC: After discussing Threadless etc., Donal concludes: "While to date crowdsourcing has been used mostly in the area of visual design, it could easily be adapted to issues of technical design also. Who is to say that an electronic equipment company could not use crowdsourcing to develop new products? There could be thousands of engineers itching to submit designs for new devices or contribute to the design of a new product. ...

Customerism: This is where we are now then: "A collection of separate business concepts and enabling technologies, that encourage user/customer participation, whose attributes overlap with one another to a significant extent. ... While there is no single word that can take in all of them ('masspeercustomizationcommonsmarketplace' doesn't roll off the tongue!), my personal opinion is that the term 'Customerism' is probably the most suitable word to describe a series of ideas that empower the customer ... "

Great observations and conclusions, again: read his entire post! I asked Donal what motivates him to spend so much time and effort to documenting mass customization and Customerism with this dedication. And his answer was a typical example for the motivation of empowered users in the new market space:

"As regards motivation, I guess you could say it is mainly interest in the topic. I researched MC as part of a master's degree a few years ago. I couldn't use my MC knowledge in my 'day job' (working for the Irish Government), so I set up the website as an outlet to pursue these ideas further. My view at the time was that if I did nothing, my work on the topic would 'go to waste'."

It is only through the great contributions of people like Donal that mass customization is really catching up. There are very few consultants or people who do mass customization professionally that have contributed so much back to the community – and doing this with so much modesty and intellectual generosity. Thank you, Donal!

Why do people want to co-create and to customize?

A new book by Lisa Johnson provides some good answers -- and some great new case studies, too.

Yes, we know today that modern consumers not just want to solely consume, but are active and co-creating and (a few of them) co-innovating – and want just what they want.
But why is this so? This still is one of the fundamental questions – also for companies that want to benefit from “crowdsourcing” or interactive value creation.

To answer it, you either have to rely on heavy sociological texts or studies from anthropologists, or on pretty weak trend assumptions by marketing consultants (I have summarized both discussions in my German MC books).

One of the few exceptions is the great book by Harvard Prof Shoshana Zuboff and her manager husband James Maxmin, “The support economy: why corporations are failing individuals and the next episode of capitalism” (London: Viking Penguin 2002), which contains a great analysis why the (US American) consumer wants more personal service and customized offerings.

The focus of Zuboff and Maxmin are baby boomers, the post-war generation now in its best living and spending age. However, most co-creation activities that are cool in the moment come from younger generations, today 14-to-40-year olds. Also these consumers are savvy, sophisticated, and particular – and they are becoming more and more immune to traditional advertising, while exploring the huge choice of “long tail” markets.

Divided by marketers in the Generation X (30+) and Generation Y (teens and twentysomethings), these groups shape today’s pattern of consumption and value creation. And Lisa Johnson, a marketing consultant, does a great job in her book “Mind your X's and Y's: Satisfying the 10 carvings of a new generation of consumers” (New York: The Free Press 2006) to describe why and how.

What I really liked about this book is that it is all about Web 2.0 and Social Commerce without even mentioning these terms, but bringing them into a more general, better founded and buzzword-free framework.

Her starting point:

“Whether we like it or not, recent technologies have changed how our brains operate. They have altered the way today’s consumers think – not just what they but, but how they buy, how they act and react, and which products and services they find compelling.”

Resulting form this is a different mindset that Johnson calls “the five essential criteria” which describe qualities consumers expect from all kind of products:

- Experience: The desire to get out and try new activities, to explore, text, and see what is possible.

- Transparency: The market as an antispin zone. Full disclosure for companies and consumers alike with accountable choices and decisions.

- Reinvention: Due to fast adaptation of new technologies that allow to do old things differently, markets are a place of constant change.

- Connection: Cooperation of people blending their talents and perspectives to improve the experience for everyone.

- Expression: Anything is possible. The desire to express the layered facets of ones personality and individuality by customization and personalization.

These five criteria inform how consumers operate in the market. And Johnson uses them to describe ten consumer cravings that cross industries and age brackets as they drive – in her opinion – every decision made by members of the Generation X and Y. Let me introduce five of them which seem more relevant for the themes of my blog. While the following quotes describing these trends are pretty much marketing-jargon, their description in the book is actually more profound:

Shine the Spotlight: Extreme personalization gives marketing a new face: "Clamoring for personal recognition. They’re itching to stand out, stand up, and be celebrated with their names in lights (or print or pixels). Brands that tap into this powerful need with highly creative efforts will get not only great buzz, but a whole new level of loyalty and brand ownership to match."

Make Loose Connections: The new shape of “families” and social networks. "This generation is rejecting traditional associations and club-style memberships in favor of loose connections that more accurately reflect their interests, lifestyles and busy days."

Filter Out the Clutter: Editors and filters step into a new role of prominence. "In a world that’s inundated with choices, editing is a critical market phenomenon and an important process in our daily lives. Consumers rely on editors to sift through the raw data and identify the top picks. As a result, many savvy brands are learning to build editing mechanisms into their brands, products, and websites.

Keep it Underground. The rejection of push advertising and the rising influence of peer-to-peer networks. "A select group of people discovers something new, from shoes to bands to politics to neighborhoods, and translates it to satisfy a much wider audience. This is the way of the underground."

Build it Together. Connected citizens explore their creative power and influence change. ".. we’ve only just begun to tap into the power of web-based networks. The Connected Generation is becoming intoxicated by their growing ability to spark change – both as consumer groups and end users. This awareness is spurring mass creativity and launching a power shift away from companies and into the hands of consumers."

And, just for record, the remaining five carvings are:

- Raise My Pulse. Adventure takes its place as the new social currency.
- Give Me Brand Candy. Everyday objects get sharp, delicious, intuitive design.
- Bring it to Life. Everyday activities are orchestrated to deliver a dramatic sense of theater.
- Go Inward. Spiritual hunger and modern media find common ground.
- Give Back. Redefining volunteerism and the meaning of contribution.

Regarding her first trend, Shine the Spotlight and Extreme Customization, she provides a number of good arguments why consumers want this kind of customization and expression of their personality – regarding the need for (mass) customization especially for product offerings that address aesthetic design and personalization:

- People are burned out. “Consumers are cynical and extremely educated about the entire marketing process. Add in a collective obsessions with celebrities, and people everywhere are longing to experience the insider treatment. They want to feel like someone really cares about their dreams and desires.”

- People have seen what is possible. New tools and websites allow consumers to share their unique personalities.

- There’s a sense of entitlement. “I deserve it and I am ready for it now, is the common attitude.

- People want profile in familiar formats.

- People want promotion without the appearance of self-promotion.

To illustrate this trend, Ms. Johnson uses a number of case studies which I personally find not too extreme or convincing, there are much better examples out there (like the new Adidas Pars Innovation Lab, DNA Style Lab’s idea or Build-a-Bear): Jones Soda that allows you to place personal labels on standard soda, Iamtoy.com, who create handcrafted superhero alter egos of your loved ones, DNA Artwork that uses your DNA for a custom picture. But you ge the point.

Among the many other, much better case studies in the remaining chapters of the book, is the venture of an active member of our mass customization community: Andreas Schuwirth (http://www.xxpo.de), who developed a body measurement solution for the bike market that allows a totally new sales experience there. The book describes in large detail the application of this system in a new chain of bike stores in the US, "roll:bike". These stores are envisioned by an industry outside, Stuart Hunter, who wants to provide customers a custom shopping experience with a highly edited and customer-centric store. The book describes here a great case study of an offline-customization (matching) system that really provides customer value.

What the book is missing, however, are all forms of co-creation that go beyond operational marketing or improvements of merit, but which do address topics like lead users or other forms of user innovation (Patty Seybold’s book does a better job here). Ms. Johnson stays in the traditional regime of thinking – but this is also where most co-creation activities do take place anyway.

I could go on with quoting from this book, but just recommend that you get a copy and read it for your self.

Outside Innovation: New book by Patricia Seybold builds a bridge between open innovation & mass customization

Outside Innovation: How Your Customers Will Co-Design Your Company's Future, by Patricia B. Seybold. New York: Collins, October 2006. ISBN: 0061135909, about 26$.

This book review has been overdue for more than two months when I got the pre-version of Patricia Seybold's new book, "Outside Innovation". I immediately read it with very large interest, as Seybold is one of the authors I have quoted often in my own books. In her bestselling title 'Customer.com', she provided a great analysis of how the internet is changing consumer markets. So meeting her here in Boston for several occasions in the past year and discussing with her some ideas of her new book was a great opportunity. Here is the result of her recent research: In "Outside Innovation", Patricia Seybold provides one of the first general-management books on co-creation of value between firms and customers.

Well, there have been other books on this topic before (starting with the great, but today almost forgotten book by Rafael Ramirez and Richard Norman on Value Co-Creation [1994: 'Designing Interactive Strategy'], Prahald & Ramaswamy's [2003] highly abstract book on customer co-creation, and of course Eric von Hippel's [2005] fantastic review of three decades of academic research on user innovation in 'Democratizing Innovation'.

But Patricia Seybold's book is full of great and very up-to-date case studies that make the idea of value co-creation really lively and accessible. She describes (in great detail and with plenty of background information) many classic examples like Lego's co-development of the new Mindstorm toy, Threadless, Flickr, BBC Backstage or National Semiconductor, but has also some great new (at least for me) examples of customer-centric innovation like the development of a new fitness machine (Koko Fitness – great story and concept) or SEI Wealth Networks.

And her pitch line why her book is important tackles one of the main problems of integrating customer and users in a firm's innovation process:

"The good news is that customer-led innovation is one of the most predictably successful innovation processes. The bad news is that many managers and executives don’t yet believe in it. Today, that’s their loss. Ultimately, it may be their downfall."

I hope that her books can support more mangers to consider customer/user integration not only as a nice add-on pilot initiative, but to make it a crucial part of the company's core strategy. The book, however, offers no recipes or frameworks how a manager could do so. Its core contribution is to document and describe what is happening in a world that is not any longer dominated by companies creating things FOR users. And as Seybold does this in great detail and style, this record of promising practices may convince managers to turn away from old prejudices.

Patricia Seybold bridges in her book between innovation and operation, between users and customers, between leading edge contributors and average customers. Eric von Hippel strongly differentiates between these levels. He argues that for functional novel innovation, firms have not to listen to their present customers but to search for "lead users" who face a specific need ahead of the market and have turned this need already into a solution for themselves. In many cases, these lead users are in a different domain than the manufacturer and are not its present customers. Gathering input from lead users thus is totally different to market research methods of any kind.

Seybold uses the term "lead customer" to describe a group of a firm's current customers who are truly innovative: "These may not be your most vocal customers, your most profitable customers, or your largest customers. But they are the customers who care deeply about the way in which your products or services could help them achieve something they care about." Getting their input may also be the result of a more conventional market research approach.

This distinction is worthwhile to note when you read the book. Otherwise, without previous knowledge, you may get a bit confused where in her cases real innovation starts and more general customer-focused business strategies end. But as she argues, this is exactly the beauty of co-designing with customers: You start with some small steps, perhaps within the context of a mass-customization-toolkit, and suddenly your customers want more and get motivated to innovate on their own.

My conclusion: A book very worthwhile to buy and read. Its great collection of case studies will inspire you to look for more and deeper information on this topic – or to start to brainstorm immediately how you can benefit from the creative potential of your customers.

For abstracts from the book and an insight into the cases, have a look in Patricia Seybold's blog, http://outsideinnovation.blogs.com.

SAP Info on Open Innovation & Innocentive

While this is an audacious act of self promotion, I still want to guide you to a nice interview I did with SAP Info, the global customer magazine of Software Company SAP. The topic was the U.S. company Innocentive that specializes in Open Innovation. Karim Lakhani, who worked as a Ph.D. researcher in the same group at MIT that I am visiting, got some fascinating performance data on Innocentive, on which I comment in this interview.

The interview answers questions like:

From Open Innovation, it is only a small step to companies developing products with the help of their own customers. Does this mean that manufacturers and customers are once again communicating directly with each other about the products, like in the good old days of the corner shop? Is it possible to prevent submitted entries, even those that haven't won, from being used commercially, patented as someone's own idea or sold on?

Isn't it still more lucrative for someone with good ideas to secure themselves a patent rather than accepting a comparatively small amount of money anonymously from Innocentive?

Does Innocentive have a monopoly at the moment or are other companies already copying its business idea?

How could external and internal innovation specialists usefully share out the work in future?

Open Innovation has been called the "Ebay of ideas". Do you see a danger of people's gift for invention being sold off cheap?

Read the answers and the full interview in English here (the translation from German is not always very good). There is also a version in German language.

Printing T-Shirts and Money – Inside Story in the Chicago Tribune on Threadless

The Magazine of the Chicago Tribune, one of the large US quality newspapers, recently featured a LARGE (7 page) cover story on Threadless and their user-design t-shirt business. I talked extensively with Steve Johnson, the article's author, some weeks ago about the business idea behind Threadless. He did a great job in documenting the past, present, and future of Threadless. Read the entire story here.

Here are some interesting quotes from this article:

The Art-Gallery Model.

"They [Threadless] have this innate understanding that what they are really selling isn't a T-shirt so much as the tale of how it came to be, a narrative that involves an artist, a community and a company that sets itself among, rather than above, that community.

"I always compare it to an art gallery," says Nickell, who's 26 and holds the title of president because, in addition to programming the site … and doing designs of his own, he deals with the lawyers and accountants and landlords. "You have people who come in and look at the art, people who made the art, people who are buying the art."

User manufacturing. In the article, Jim Coudal, a Chicago based consultant, summarizes the Threadless model with the great phrase "If they come, we will build it." And indeed, that is some of the quintessence of the Threadshirt business model -- and of other businesses which focus on providing manufacturing capabilities to users:

Threadless is "not building something and selling it to an audience. They're building an audience and selling them what they say they want. .. The Internet has also helped Threadless find and take advantage of the world's "distributed creativity." Just as there are great writers who now have an outlet via blogging, there are great designers who have an outlet via things like the Threadless competition."

Interactive value creation. Steve Johnson then quoted me very neatly, summarizing why Threadless is a perfect example of "interactive value creation":

Distributed creativity "is a very difficult thing to get. In a normal company, you identify the coolest artist and commission him or hire him. What they do is they broadcast their problem: Who makes me the best T-shirt? From an economic point of view, you don't have to know who is the best person. You let them self select. Of course, it only worked because, in their case, they have a lot of desperate artists out there. You have a lot of unemployed graphic design graduates. And they somehow exploited this, but to mutual benefit."

Fashion as Pop-Songs. Patric King, a prominent Chicago designer, compares in the article the Threadless model with a pop song:

"What [Threadless is] doing is just sort of building the wearable equivalent of the pop song," King says. "They throw it up and see what climbs up the Top 40. I've run across a couple of other companies trying to do the same thing, but the work's just not as good. For some reason they just get prettier stuff. Their community has just sort of trained themselves that that's their standard."

A new support industry. Share of labor is the oldest economic principle. And it also helps at Threadless. The article reports about Cody Petruk, a graphic designer for a Canadian software company who owns "about 60" Threadless tees and has seen three of the 13 designs he's submitted get printed. But Petruk also runs a web-site, threadies.org, which supports user designers to participate and win in the Threadless contests. A consultancy for t-shirt designer (McKinsey and BCG, listen!).

The limits of the Threadless model.

"But there are also questions about how much growth a community can endure before it stops feeling like a community. Right now the site is a free-flowing and very entertaining mix of design submissions, which registered users grade on a scale of one to five, blog postings about the designs, links back to other projects and, of course, the store. In a recent week, Nickell says, they had almost 10 million page views from just 500,000 unique visitors.

But already, some longtime site users grumble that as the group has grown, the designs have moved away from their artsy roots and become too cutesy, too clever or too pop. The all-time best-selling Threadless shirt certainly isn't cute. Called "Flowers in the Attic," it depicts a svelte young woman shooting herself in the head, causing birds to fly out. The company has sold 30,000 already, compared to a typical first printing of 1,200 shirts, and is printing another 10,000 for the holiday sales rush."

And the article finishes with a job offer: The Threadless founders are currently considering to hire a COO to run the daily business of the company. Condition: a suit and no t-shirts.

After the article has been published, the Threadless users commented quite enthusiastically. One comment, posted by Radioactivejosh a few hours after the article was published, provides a great perspective why users love Threadless:

"The article hit it right on point; we don't just buy the shirts for the design, but for the story, the meaning, the explanation and the excitement of new prints. It all plays a factor. If I didn't read the explanation of Poet-Trees and I just saw it in Target, it would mean nothing to me. ...

I LOVE when i see people with Threadless tees, because i feel like I know them. They understand the shirts, they visited the site and browsed and saw something they liked. They weren't just trying to be trendy and went into Urban Outfitters ad bought a tee shirt they saw. Threadless tees have a lot more going into them than just buying them."

More information:
- The entire Chicago Tribune article in full text.
- The article with all pictures as an user scan.
- Discussion about the article at Threadless with more customer voices.
- My report on Threadless in this blog
- How Look-Zippy developed the Threadless model further

PS: If you want to know EVERYTHING about the upcoming T-Shirt-Economy: Adam Fletcher, who wrote his master thesis about Threadless and is now working for Spreadshirt, maintains a great blog about t-shirts, with plenty of references to mass customization and user co-design: www.hiphipuk.co.uk

Consumer Created Branding: Rob Walker on Minibrand Entrepreneurs, The T-Shirt Economy and Why This Is an Alternative to Mass Customization

The NYT Magazine (July 30, 2006 issue) has an interesting cover story on ("The Brand Underground"). It provides a great insight study in the world of consumer created branding, the minibrand entrepreneurs. In great detail, NYT columnists Rob Walker draws the picture of leading-edge consumers who turn their lifestyle into business.

Trendwatching.com called these consumers minipreneurs. Their scope of activity is broad, "Some design furniture and housewares or leverage do-it-yourself-craft skills into businesses or simply convert their consumer taste into blog-enabled trend-spotting careers." Walker writes. "Some make toys, paint sneakers or open gallery like boutiques that specialize in the offerings of product-artists." All of them produce products which are a perfect illustration of the Long Tail.

Most of them also serve the need for uniqueness for the people buying them. You don't purchase (often for a large amount of money) a product from a small sub-brand because you want to look like every teenager in Urban-Outfitter clothing. This makes these minibrand entrepreneurs an interesting alternative model to mass customization: Instead of co-designing an own product, a consumer may turn to one of the minibrands to feel individual. Interestingly, the categories where minibrand entrepreneurs are most active, t-shirts and sneakers, are also two of the largest categories of mass customization in the consumer good field.

Rob Walker's main theme in the article is how corporate or anti-corporate these consumer-generated brands are. On the one hand, their founders see their brands as a "cool" way to earn a decent living. But still:

"Many of them clearly see what they are doing as not only noncorporate but also somehow anticorporate: making statements against the materialistic mainstream — but doing it with different forms of materialism. In other words, they see products and brands as viable forms of creative expression."

To look into this paradox and generate a better understanding of the minipreneurs, Walker focuses on the t-shirt economy. He quotes three trends or enabling factors that helped small t-shirt labels, which pop up in an enormous variety, to become one of the largest categories of consumer-generated brands:

"One thing that has changed since the days when they [the first sub-culture t-shirt labels of the 1980s] scrambled to make a living is that Japanese consumers have embraced certain small New York brands as something culturally significant and worth a price premium. Nigo, a Japanese designer, built a fanatical following for his A Bathing Ape brand partly because he collaborated with so many graffiti writers and others who had an aura of authenticity that impressed young, hip Japanese consumers.

The second change is technology, which has allowed production to become more accessible. (It is easier than you think for a two-person brand to work with factories overseas, using computer files and the occasional package.) The technology of the Internet has also acted as an amplifier. … There are blogs like Hypebeast and Slam X Hype dedicated to this practice, reporting dozens of new products or design collaborations from the brand underground every day.

There is a third factor: manufactured commodities have in fact become accepted as quasi art objects, and there is no more stark example than the sneaker. Hunting for unusual sneakers and modifying them with markers or different laces has been cool for decades, a phenomenon defined in Harlem and the Bronx."

While other minipreneurs may not build on the willingness-to-pay of Japanese teenagers, the two other factors are main enablers of many co-creation products as well. After reviewing the story of several user-created t-shirt labels (an world that sometimes even Walker as an expert admints not to understand totally), Walker comes to his conclusion -- and provides a great insight into the motivation of consumers to become active producers:

"If the dance between subculture and mainstream has always been more compromised than it appears and if every iteration of the bohemian idea is steadily more entrepreneurial than the last, then maybe a product-based counterculture is inevitable. Maybe subcultures are always about turning lifestyles into business — or the very similar goal of never having to grow up.

And I have to admit, the more time I spent with the minibrand entrepreneurs, the more I had to concede that what they have been up to is more complicated than simply imitating the culture they claim to be rebelling against. They believe what they are doing has meaning beyond simple commercial success. For them, there is something fully legitimate about taking the traditional sense of branding and reversing it: instead of dreaming up ideas to attach to products, they are starting with ideas and then dreaming up the products to express them."

Site note: Rob Walker has a regular column in the NY Times Magazine, where he often writes about a other great minipreneur, mass customization and customer co-creation businesses. He also has a great new blog site that should be worthwhile reading for you. This blog regularly links to his latest column, follows up on issues and ideas raised there, and "wants to advance the conversation about matters relating to what we buy and who we are": http://www.murketing.com/journal.

Collective Customer Commitment and Crowdsourcing: How Look-Zippy is bringing the Threadless model to the next level

A recent report in Business Week about our SMR paper on Threadless and Muji's strategy to use early customer commitment to reduce the new product development risk brought us some good feedback and comments on the concept (see the updated original post ). [And of course we are just proud that after The New York Times and Der Spiegel another major publication refers to our work :-)]

Threadless uses crowdsourcing in three ways: (1) To generate new designs, (2) to evaluate submitted designs, and (3) to sell its products via an affiliate marketing system and social network.

But the market is already progressing faster. As you may already have read in other blogs, Spreadshirt, the German T-Shirt Customizer working like Zazzle or Cafepress, just announced a take-over of LaFraise, the French Threadless clone. This will provide Spreadshirt the ability to integrate its users even further in the design process and to supplement its highly flexible, but expensive on-demand printing concept with the business model of screening demand before (mass) production. I am curious to see which innovative business models will be resulting from this merger.

Another company however has already brought the Threadless concept to the next level: Look-Zippy, a Sénergues, France, based t-shirt seller (thanks to Jochen Krisch for the link).

Remember that the key aspect of Threadless' model is the aggregation of commitment of its customers. Threadless does not face the conventional risk of a fashion company whether new design variants will become a hit or miss. This risk is reduced tremendously by the participation of its customer community in the assortment planning process.

The evaluation of new designs by its customers helps Threadless to pick exactly those new designs which find the highest appeal in its community. On top, customers express their informal commitment to purchase a design variant in case it would be selected and printed by ticking a small box. While this works very well, some uncertainty remains for Threadless: Exactly how many t-shirts they shall print, and in which size dispersion. This decision can be only based on forecasting and rule-of-thumb guessing.

Even if t-shirts are a product with high margins and low inventory-cost, the "special sales" periods at Threadless indicate that there are some overstocks of t-shirts which do not sell as well as the customer evaluation predicted, or where Threadless' management ordered too many of the wrong sizes.

This is where Look-Zippy has perfectioned the Threadless business model. At the beginning of the process, these French entrepreneurs crowdsource everything like Threadless: An open design competition captures the distributed creativity of creative users, and the selection of the best designs builds on the evaluation capability of the entire community.

But then the process differs: Instead of scheduling the winning designs immediately for production, Look-Zippy starts selling first by taking binding orders. Selected new designs are listed for exactly two weeks on the web site (a ticker prominently shows the remaining time – Woot.com pioneered this strategy online). Customers can place an order only during this period, once the time is up, no more orders are possible -- and only then production starts.

The result: The shirts are produced in exactly the right volume and size dispersion. This binding commitment of customers allows Look-Zippy to mass produce only the products that really fit their customers' needs – a marketer's dream. This model is much closer to the original model of collective customer commitment which was developed by Elephant Design and Muji in Japan at the end of the 1990s (more info on Muji): The risk of new product development and planning is outsourced to the customers.

The disadvantage for customers of this model however is a slightly longer waiting time/ But this may be counterbalanced by the "limited edition" feeling of the shirts. Also prices should remain low on the long run, as an successful product has not to cover the wrong forecasting of other variants.

Combining the creative talents of the crowd (open innovation), the commitment of a community for a new product (collective customer commitment method), and the limited edition approach of consumer markteters seems like a winning strategy for other industries as well. I am curious to see in which other consumer good industries this model will catch up first. Please leave a comment or e-mail me if you have any candidates or examples!