Mass Customization & Open Innovation News

Personal Mobility by Daimler: New moovel platform wants to make travel more efficient

During his presentation at the MC2012 conference, Wolfgang Gruel from NBD at Daimler already indicated a major new offering that shall move Daimler into the nexat area of automotive transportation. Last week, this service was finally announced: MOOVEL 

It shal provide a more comnpelling answer on teh question: Why is it necessary that privately owned cars are often used in a really inefficient way, by either standing around most of the time or being driven by only one person where four or more passengers could be transported. 

One solution to this could be more car pooling. The idea is not new at all and i being offered in most (if not all) major cities over here in Germany. However, it is kind of revolutionary that a major car company like Daimler starts a project aiming at getting people to do what is, by traditional means, not in a car manufacturer's interest in the slightest: Buy less "useless" automobiles by using an improved, automated car pooling model. 

Daimler, though, aware of their social and ecological responsibility, has just launched a platform that does exactly that: moovel. 

The concept is really simple. Moovel is availible either as a (free) iPhone app or via their website. Users can easily offer unused seat capacity availible during a car ride they are going to take, at a certain time and from one destination to another.

Likewise, travelers in need of transportation can enter the time and places they want to go to and are instantly shown information about not only availible seats in privately offered car pool vehicles but also details on commercial rides by buy or tram offered by local companies. 

The best about it (especailly if you are used to the often tiresome information-websites of railway companies) is its ease of use. You literally do not have to invest more effort than it takes to alter one short sentense to your needs, by specifying when and where you want to go. The software does the rest, and beutifully so.

Since this is a pilot project by Daimler, the service is in German language and limited to the city of Stuttgart, Germany, for now. If it proves to be successful, though, it might be adopted and coming to a place near you sooner than you think.

So if you understand any German at all, I really recommend taking a quick look, its a concept that will be really interesting to watch evolve. More about moovel on their website.

Market Watch: New MC Platform by RPI Helps Stationery Retailers to Jump onto Personalization Business

Personalized stationery like paper, photobooks, greeting cards etc. with your individual text or design printed on them are not exactly a new idea. They are, however, a widely popular product for those who wish to express themselves with something more individual than what your average mall has to offer. Hence, selling personalized stationery is an interesting market model.

Unfortunately it comes with the usual issues of offering individualized products: You need a well-working, easy to operate configurator that lets your customers design their goods. You also need to have them printed and shipped within a relatively short amount of time. This as well as all the complementary logistics can be a severe obstacle on the path to the personlization market place.

If you are on the fence about offering individual stationery of any kind - may it be as a sole business model or to complement your already existing brand - you might be interested in investigating RPI's new storefront solution, specifically designed for stationery products. RPI hence is following the course of Zazzle, Cafepress, or other companies that successfully have established a MC platform.

I met the company on the last MCPC conference and was impressed from the general MC knowhow in their field. According to the company's latest press release their new can be "seamlessly embedded into any retailer's existing website" and let your customers choose from "hundreds of personalized products". RPI will take care of all the printing and delivery work so you can focus on your core business.

With the same press release we also learned about RPI's  new special product line for retailers in the  growing market of the pet industry. This might be a promissing approach, seeing how, according to Mintel, 76% of cat or dog owners consider their pets to be family members. If products like the "Woof Card" and the "Furfolio" (pet-) photo book sound appealing to you or if RPI's special cards for "fur-nouncements" to family and fellow pet owners are just what you need, you might want to check out their respective website for this product line, www.woofcards.com.

 

The $1 Million Zazzle Innovation Challenge: What is your great idea for the next in mass customization?

Here is your perfect thing to do over the Christmas holidays:

Zazzle, a leading platform for quality custom products, is hosting their first "One Million-Dollar Innovation Challenge" to launch the development of the next, most innovative customization product or company.

This can be an idea for a new consumer product, but also one for an innovative service, health, business to business or whatever offering ... Feel free to bring mass customization to a new level!

The contest had been announced during the MCPC 2011 conference dinner. It is hosted in association with MIT's Smart Customization Group and UC Berkeley's Center for Corporate Innovation,

The Million-Dollar Innovation Challenge and prize is open to any person or company with an idea for a customizable product. Applicants must create a one-minute video, describing their product and explaining why their innovative concept is special and will contribute to the growing movement of mass customization. Applicants will be judged on innovation and economic viability.

The winner will gain access to Zazzle's world-class engineering team, which will support the winning project with software development, exclusive proprietary design tools and 3-D product visualization technologies. Additionally, Zazzle will fund the project with resources to develop a global product-marketing plan and launch the product to a worldwide audience of tens of millions of potential consumers. The winner will also receive mentorship from a veteran panel of potential investors and industry leaders, in addition to introductions to Zazzle's many brands and partners.

Zazzle will announce five semi-finalists on February 24, 2012. Academic experts, industry executives and active investors will help refine the concepts and plans for final evaluation and judge the presentations.

For more information, including objectives, application, rules and prize details, visit www.Zazzle.com/challenge.

Quirky in Numbers: Entrepreneur Magazine shares new data on Quirky's social product development business model

In the August issue of Entrepreneur, Jennifer Wang has a great story on Quirky, featuring the person of founder Ben Kaufman (everyone attending the MIT SCG Seminar in 2010 still remembers his presentation), but also sharing some great info on the company.

Read the full article here, but here are some of the facts I found most interesting:

Old world: If you have an idea and want to turn it into a product "Kaufman puts the upfront costs of building a company around a single product at about $200,000--just to get the paperwork done and the first prototype out." Combined with the risk, most people never get their product idea anywhere near retail shelves.

Quirky's approach:

Create an online community of 65,000 members (growing by 20 percent every month).

Have "every week hundreds of inventor hopefuls, or "ideators," submit their concepts online".

So called "influencers" than vote on the ideas and develop them further, together with Quirky's inhouse design team.

Requirement: Product ideas must retail for less than $150 and should not require integrated software.

Examples of products in the making and development: "an auto-stirring microwavable bowl with steam-release function; a modular tent-making kit for use with couch cushions and throw quilts; a yoga mat with magnetic or Velcro closures."

30% payoff: "Thirty cents of every revenue dollar goes back to ideators, and a number of them have already earned tens of thousands of dollars."

Typical income of inventors:

Michael McCoy, inventor of Cloak, a two-in-one iPad stand and case, that retails for $29.99. This item generated total sales of $100,128, and Michael got a share of $38,007 for this.

Jake Zien, inventor of the Pivot Power, an adjustable power strip with six outlets, that retails for $29.99. This item generated total sales: $13,021, and Jake got a share of $4,919.

Quirky's take: "The company retains the rights to all the cool ideas that are voted into the development process, and because the company gets validation from thousands of potential customers before making a move, Kaufman avoids all the costs associated with early design phases." => our idea of collective customer commitment at its best!

2011 revenue: Expected "to be between $6 million and $10 million"

Financing: Quirky has raised $12.6 million in funding.

Staff: Today 40, planned are about 80 by the end of this year.

Media: Ben is a master in self promotion and announcing his company, and so the Sundance Channel's will have a reality TV show featuring Kaufman, Quirky employees, the inventors and their stories, premiering in August.

Ben's core learning in running an online community:

"Face-time is important, transparency is important!" There's a whole department dedicated to "inventor services," and the company regularly holds virtual town hall meetings with the whole staff, inviting community members to log on and ask anyone on the team questions."

 For me, Quirky still is one of the best ideas of co-creation. Here is my earlier more extended analysis of their business model.

 

CYO 2011: Final Agenda - European BtC Customization & Personalization Entrepreneurs meet in Berlin

The "Create Your Own" event on May 30-31, 2011 in Berlin at Theater Aufbau Kreuzberg, Moritzplatz 1, 10969 Berlin.

The CYO 2011 is a unique opportunity to explore the reality and future behind individualisation, co-creation, and personalisation -- mega trends that are shaping the European consumption landscape. The event is co-organized by a consortium of European companies and research institutes in the field of mass customization. Here is the semi-final agenda. Participation is 200,- Euro only -- but register until May 1.

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Monday, 30th of May 2011: CREATE YOUR OWN 2011 Company Showcase & Evening

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The opening event will feature over fifty co-creation entrepreneurs, makers, researchers, technology experts, policy maker, and investors from around Europe. A press conference and special exhibition will present the makers and shapers of personalisation and customisation in Europe to a wider audience.

16:00 Registration starts

17:00 Opening Talk: Greetings & Event Overview

17:30 Showcase Exhibition Opening: Experience some of the best European CYO consumer good companies

19:00 Press event, film screening and recpetion: Create Your Own -- The Official Movie, produced and directed by the London College of Fashion
 

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Tuesday, 31st of May 2011: CREATE YOUR OWN 2011 Business Conference and Workshop

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  The business conference will provide a detailed look at innovative European start-ups that are quite literally giving the people what they want. At the seminar, plenary presentations and panels will look into the market for mass customisation, new business models connected with the trend, and the latest technologies that make it happen.

8.00 Registration starts

9:00 Welcome Addresss: John Cleuren, DG Research, European Commission

9:30 CYO Opening Presentation: The Mass Customization 500 – A Benchmarking Report of 500 CYO Offerings, Frank Piller (RWTH Aachen) & Dominik Walcher (Salzburg University of Applied Sciences)

10:00 Best Practice: How to sell dreams – The Success Story of Personal Novel, Jan-Christoph Goetze (Personal Novel)

10:30 Coffee & Networking Break

11:00 Best Practice: To be announced

11:30 Panel I: The market for customization & personalization – where will we go?

Moderator: Prof. Frank Piller, RWTH Aachen

• Thorsten Harzer, Boston Consulting Group/RWTH: “What about the MC market today?”
• Tom de Bruyne, Boondoggle: “How to sell your innovativeness”
• Michael Bruck, Chocri: “How to take the plunge to the US”
• Oliver Hickfang, Juuway: “Perspectives for European Companies to Sell Custom Goods to the Chinese Consumer”
• Rolf-Christian Wentz, Business Angel: “When are MC start-ups promising?”
• Paul Blazek, CyLEDGE: “Mass Customization at the Edge: the most curious CYO businesses”

12:30 Lunch

13:30 Panel 2: The power of communities - Qualified open innovation and mass customization
Moderator: Prof. Thomas Fischer, ITV Denkendorf

Panel Keynote: How to realize the ideas of consumers, Hervé Francois (Color Textil) & Niels Hendriks (KH Limburg)

• Hervé Francois, Color Textil: “Designers as professional customers”
• Niels Hendriks, KHLim: “How to satisfy customer’s needs”
• Ellen Mutchler, Color Textil/ Digifabrix: “How to develop professional exchange platforms”
• Sue Jenkyn-Jones, London College of Fashion: “How to support the customer by Style Advice“
• Michiel Willemse, TNO: “3D printing of jewellery”

15:00 Coffee Break

15:30 Panel 3: Business models and platforms to run a successful mass customization business
Moderator: Sergio Dulio, Milano

Joint Panel Keynote: Platforms as collaborative business models for the future of mass customization: The cases of BivolinoServices and Customax, Bas Possen, Customax, and Michel Byvoet, Bivolino

• Andreas Kortmann. Matteo Dosso: “Being successful in a BtoBtoC market within 12 countries”
• Carine Moitier, Bivolino: “Bringing art into the customized apparel market”
• Philip Rooke, Spreadshirt: “How to let customers make money with their designs“
• Martin Meuser, Customate: ”How to collaborate with big players“
• Lotta Nordin, Adidas: ”Aligning mass production and mass customiaztion“

17:15 Wrap up and results of the the “Makers Incubator” (workshop)

17:30 Reception and Exhibition

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Participation at the CYO 2011 is 200,- Euro only -- but register until May 1.

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SPECIAL OFFER: If your company is offering mass customization products or services, participate at the CYO 2011 showcase exhibition. This will be a great opportunity to showcase your offerings to a wider public, the CYO 2011 participants, and a large group of invited journalists and multiplicators. Participation at the exhibition is only 250,- Euro (including the 200,- Euro participation fee at the business seminar), but place is limited. For any exhibition requests, just check the CYO website.

The Ponoko-Google Challenge: Show the World How Easy It Is to Manufacture What You Like

If have written several times about Ponoko here, a platform where designers, users, and manufacturers meet and enable to production of cool items in a very democratic way. It allows you to turn the stuff you dream up into physical objects that you can hold in your hands.  "User manufactuing" at its best!

Ponoko now has teamed up with Google in a user contest to get people educated about the opportunities available for anyone to design things and turn them into real products -- without the help of any "large" company! With Ponoko's new "Personal Factory 4", the process got even easier.

The Google-Ponoko challenge is to produce a piece of instructional content that’s equal parts enlightening and entertaining. Each entry must be titled “How to use Google SketchUp for Ponoko 3D printing,” but aside from that, the format is pretty open. Text, images and video (or some combination of the three) are all fair game.

The competition deadline is four weeks from now; all entries are due December 17, 2010. Visit the official announcement page for all the details, and have fun making the world a more interesting place to be.

Zazzle Launches in Germany to Continue European Rollout

Yesterday at around midnight, Zazzle.de went online, the Zazzle platform in German language. Being German, I of course were especially appealed (even if the translation at some places still is bumpy, it is difficult to translate the American startup slang in German, I suppose).

In addition to supporting the German market with full German-language translation, www.Zazzle.de will base its transactions in Euros and buyers will not need to pay additional taxes or customs duties beyond the product price. Customers on the www.Zazzle.de website will enjoy fast delivery of their order to any address in Germany at competitive prices. But the zazzle.de website will be a virtual front end, with all information being managed from the US.

But an interesting feature, and one that make's a lot of sense, is the promise of Zazzle to offer localized merchandising featuring German Sellers and content relevant to the German market. In the moment, this is Oktoberfest beerfest stuff.

The also promise a standard delivery across Germany at competitive prices with delivery typically in 5-7 days, with Express delivery in about three days (hence just a bit slower than Spreadshirt or other Germany-based companies).

I am curious to see how zazzle.de will develop and are happy about another strong case close to my home.

In the press release, Zazzle offers some more information about their business development. Zazzle's recent statistics include:

--  Monthly unique visitors to the Zazzle websites now exceed 12 million;
--  140+ percent year-over-year traffic growth;
--  Total number of members is 5 million+;
--  Total items shipped is more than 11 million;
--  Leading on-demand custom products marketplace in terms of traffic
    rank, page views, and other key metrics, according to alexa.com

PS: Zazzle will present at the MCPC 2009 conference in Helsinki about their recent achievements and future plans!

Custom Jewelry: FORBES Video report about Paragon Lake

I wrote earlier that one of the large trends in mass customization is the creation of a network structure where an intermediary brokers between diverse retailers and manufacturers for custom products. Customax.com or Bivolino Services are good examples for this trend in the fashion industry.

As reported before, Paragon Lake wants to bring this model to the retail world. Forbes just published a nice Video report about them (you have to watch a short commercial before it starts!), with interviews with the key persons behind the concept.

Paragon Lake was founded in 2006 by Matt Lauzon while he and fellow students were at Babson College. They were exploring personalization and other new ways that people shop. They soon realized there was an opportunity to drastically improve the way fine jewelry is bought and sold. Their vision led to the creation of Paragon Lake. On a presentation at the Smart Customization Seminar at MIT in November 2008, Matt introduced his company to a larger audience.

The group's focus on fine jewelry was inspired by a friend's search for a present for his girlfriend. The friend thought that jewelry would be the perfect gift, but considered jewelry shopping experience to be intimidating and overwhelming. After visiting a few local jewelers, he was unable to find a piece that was just right. Hearing his story, Matt realized that technology could not only help fix this problem, but also revolutionize an industry.

Paragon Lake joins consumers, retailers and designers together to create one of a kind jewelry using a special sales application tool with really cool rendering capabilities. The video explains the concept quite neatly.

A good background report about the company is here.

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

Personalization in Retail: How RFID tags are helping a German retailer to provide customization of the retail experience

Roland Piquepaille wrote in a ZD-Net Blog about RFID tags that help you to choose your clothes at a German retailer close to my home.

This application fits perfectly to the discussion we had at the MCPC 2007 Business Seminar a month ago in Montreal on "A total makeover of retail". Here are some quotes from the posting:

"A German department store, the Galeria Kaufhof in Essen, part of the Metro retailing group, is using RFID technology in a new way. … Men buying clothes in this store will get automatic suggestions. For example, when you go to a dressing room to try a suit, a ’smart mirror’ will tell you what kind of shirt or tie you need to buy with it. Will this technology be deployed elsewhere? Time will tell.

… An RFID reader on a “smart mirror” in the change room determines which clothing has been brought into the room from the RFID tag attached to the apparel, then displays complementary clothing choices or accessories. The system is used in combination with ’smart shelves,’ which can read what merchandise is currently in stock, so that customers can be shown choices in sizes that are available, and in various styles and colors.

… RFID readers are installed in walls, tables, and clothing racks of the men’s department. In addition to providing METRO with data on store floor inventory in real-time, the readers enable a number of consumer-facing applications that METRO hopes will both wow customers and make their buying experience richer and more convenient. The RFID tables are hooked up to an accompanying flat screen, which displays what sizes and styles are immediately available on that table. The RFID mirrors detect which garment the customer is wearing or holding and offer recommendations for complementary items.”

And of course, all this information is extremely valuable to the retail chain. Let’s return to the Baseline article for its conclusion. “Bill Colleran, chief executive of Seattle-based Impinj, says the exciting thing about the Kaufhof deployment is that it demonstrates that RFID can be used in retail for much more than to wring out cost savings in the supply chain. With the use of business intelligence systems like smart mirrors and smart shelves, it can be a new sales driver. ‘People joke that this is the ideal place to start because men need more help” in making choices,’ he says.”

Context information:
- The full blog posting of Roland Piquepaille.
- Report in Baseline Magazine which was the source of Roland's article
- Metro press announcement
- Press release by the technology providers

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

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 !!

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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.

BMW’s Mini Brand Launches Custom Roof Designer Online

Evaluation of the new roof design toolkit and some ideas for improvements and additions

Driving a BMW-Mini often is seen as the ultimate expression of individualism. People paying the extra premium for a small, but fun car often select a Mini to express their individual lifestyle and to set themselves ahead from the crowd. For me, this always seemed to be a bit a contradiction, as I have seen very few really “cool” people driving a Mini, and at least in Germany, Mini drivers seem to follow a general pattern of belonging to a conservative upper middle-class medium aged segment living in larger cities. (I have, however, to admit that driving a Mini really is fun and a very nice experience).

Also, from a mass customization point of view, a Mini has rather limited customization offerings. While the configurator suggests plenty of choice options, they are rather limited, especially with regard to style customization like color combinations between body, roof, and interior. All choices seem to be perfectly balanced to deliver neatly tuned combinations fitting the Mini brand image as seen by its corporate parents.

But now, there is ultimate choice. Customers now can freely design the Mini’s roof with their very own design. The roof is one of the signature design features of the Mini. It is often selected in a different color than the body. And now you not only can select from 15 or so standard colors, but really design your own, as the German weekly Der Spiegel reports in its online edition.

Enter the Mini Roof Designer, a very well done playful online design toolkit that allows you to generate your own roof design. The configurator is full of nice gimmicks providing a great experience, but not really helping you to come up with a better design. As far as I could evaluate this configuration toolkit, this – in the moment – is a pure marketing gimmick. You can design your roof and save it, but that’s it.

According to the regularly well informed Der Spiegel, however, you also can order very soon your individual design in form a custom-made foil with your individual pattern that your Mini dealer will fix on your roof. (and in the Carscoop blog I read that the orders are available only in Italy for the time being, Germany will follow in June, Austria in the third quarter, with further countries being added later).

Given the high prices for extras for the Mini, 400 Euros for this service seem to be not too expensive. I bet there even will be fans ordering their custom roof stickers without even owning a Mini. And I am looking forward to see all the really custom designs printed on Mini cars and how they match the look of their owners. Have a look in the gallery of the Roof Configurator to see what I mean.

Nice idea. Some thoughts I had while playing around with the configurator how to improve this offering :

(1) It will be interesting to see if and how Mini approves all designs and whether there will be limits of what people can print. For the online gallery publicly showing your saved design, a manual approval process takes place. After I saved my Mini, the system told me that it will take ONE WEEK to approve my design before it is online. Hey, we are in an online, real-time, instant gratification world and the automotive industry is talking about the Three-Day-Car http://www.3daycar.com/!!

(2) It is rather difficult to come up with a nice design. The system offers many tools, but as an average user without design skills, it is difficult to come up with something creative. Easy-to-modify starting designs are missing. Also, I would have loved to get some more inspirations, perhaps by famous designers sharing their own Mini roof. And if I would be a professional designer, I would love to be able to upload a design made in Photoshop or any other professional design program using a template provided by BMW.

(3) The custom Mini roof sounds like a perfect idea for a new Threadless clone . Let the best in the world design roofs in form of an open (ongoing) competition, and let the community of Mini fans and owners evaluate the designs and vote on the winners. Then produce these designs in limited editions and sell them within days.

(4) Or a modification of the Spreadshirt idea: Let users design roofs, and sell their individual designs to others. Designs are then individually printed, and designers get a share of the proceeds. Perhaps this also is a great after-sales tuning idea. Think of transferring the BEMZ idea of tuning IKEA sofas onto Mini roofs: Create custom Mini roof covers and sell them independently for 200 Euros. Given that about 1 Mio. New Minis have been sold, this sounds like a nice market opportunity.

So many opportunities for mass customization in the automotive industry. Let’s see what is happening next.

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

(Update) MyMuesli launched -- Create custom cereal online

(Update of posting from April 30). Whenever I am asked what the next big trend in customization is, one of my answers always is food. And one example that I am always referring to is custom cereal. While the cereal shelf space is pretty impressive in many supermarkets, there still is demand for more choice.

Consider food allergies in line with personal taste preferences, and add the wellness and functional food trend – as a result, you easily find many reasons why we want custom cereal. But to get custom cereal -- or any other custom food item -- we had to go the conventional way of craft customization, i.e. prepare our food from basic ingredients from the scratch.

Or select the artificial option: Nutrition supplements have been available in custom varieties since years. But now, one of my basic foot items can be conveniently mass customized, too: Muesli.

I just placed my order for a custom box of muesli. No raisins, but plenty of mango and apricots. No hazelnuts, but cashews and pine. And some magic Alfalfa (what ever this is, but is seems to be good). By doing so, I stepped into the typical MC consumer trap: Motivated by a cheap basic price and rather small additional premiums for additional items, I ended up with a Muesli that will cost about 4 times more per pound compared to my standard organic muesli mix. But it is custom, comes in a nice box, and has my name on it. So who cares?!

MC veterans will remember General Mills’ pilot in the same area, mycereal.com, but this venture never went online in full scale (a review of the old site is here).

Today, three business school graduates from Germany have launched Mymuesli (of course in beta). Max Wittrock, Hubertus Bessau and Philipp Kraiss offer customers on their rather simple site a simple, but working configurator to create complex custom mixes from more than 75 ingredients. While the site is not the latest in web design, I like the idea – and I am curious to see how the site develops!

Update: After about two weeks, I got my custom muesli mix. It was packed in a special tube box (which, however, did not survive the treatment in the German postal service). The muesli is great, really delicious mix, very good ingredients. But I am not sure yet f it is worth the high premium compared to my regular stuff.

And I am curious to see how the company follows up. In the end, custom food items are a perfect example for building loyal customers:
- Get your first order.
- Provide feedback if you like the customization (in my case, I would add more apricots, as they are so delicious).
- Send a reminder after the average consumption period for a reorder of the modified mix.
- If a customer reacts, this process will result in a subscription cycle of the custom good: I will never run out of muesli, and MyMuesli never will loose me as their customer. This a least is the theory.

After I posted about MyMuesli in the original posting here in this blog on April 30, several other reports on MyMuesli have been published. A good comment comes from Rad Tollett:

I think this web-based system of customizing the ingredients of food will have profound effects on major brands in the next twenty years. If the system is in place to customize cereal there is no reason why I, as a consumer, cannot go to a major soda manufacturer and ask for the same levels of control. The only thing preventing me is the fear inside the walls of major soda manufactuerers. The question they likely have but fear to ask is what would happen to Coke if it were opened? Would people choose the special sauce over making their own? Cane or corn? Heavy or light carbonation? More prune or less? Vanilla, cherry, orange, or what? What role does Coke play when I’m making “my” Coke? Scary, but freeing.

And trend-spotting Springwise knows that MyMuesli has had a great start -- and they have another great idea for using this toolkit:

Nice example of mass-customization, and one that's quickly catching on: Mymuesli started two weeks ago, but has already run out of packaging (which they'd estimated would last at least 8 weeks). ... One to adapt to local breakfast preferences? Could be a fun gimmick for hotels, too: during the booking process, let guests order their own breakfast and have it delivered to their room in a personalized box.

Context:
- In case you are able to understand German, you can read the founders' story in their blog.
- Stefan Jäger, a former Ph.D. student of my Munich group, wrote his thesis on mass customization of food. More information on his German book here.
- Here is an interview with the founders of MyMuesli.

Interview: Detlef Schoder on the future of the newspaper, personalized printing, and how we can get our daily blog feed into the morning paper

Professor Detlef Schoder is known to me since years as one of the most active German researchers on mass customization. But he also is an entrepreneur and one of the driving forces behind the idea of a mass customized newspaper – a newspaper that is daily personalized according to each individual reader's personal taste and preferences. His company Medieninnovation.com provides technology and consultancy for custom publishing solutions. In this interview, he reflects about today’s state and the future of custom printing.

Prof. Schoder studied business administration in Germany at the universities of Munich and Passau. He obtained both his PhD and Habilitation (Higher Doctorate) from the University of Freiburg, Germany. Professor Schoder has worked not only in Germany, but also in the U.S.A., Republic of Kazakhstan, and Japan. He was an invited visiting scholar at Stanford University, MIT, and the University of California, Berkeley. In 2003 he became Head of the Department of Information Systems and Information Management at the University of Cologne, Germany.

His teaching, research, and project management focus on the economics and management of telecommunications in organizations, especially electronic commerce/electronic business, mass customization, peer-to-peer, ubiquitous computing, and new media management. In the mid 1990’s, he conducted one of Europe’s largest empirical studies on web-based electronic commerce. In addition, he in an adviser for electronic commerce to the German Parliament and consults the European Commission on research projects conducted under Information Society Technologies Framework Programme. Detlef Schoder holds a patent for “an individualized printed newspaper” (WO03052648).

Detlef, can you share a bit about your activities in this custom publishing business?

Our new cross-media product improo provides a synthesis between online and offline world. improo contains articles from high-quality newspapers, which are purchased for reuse, notifications from agencies and contents from our own editorial staff. Furthermore it includes internet elements, e.g. newsgroup messages, RSS feeds and blogs. New qualities are generated through calendar, forecasts and other information, which the reader can customize and add to his newspaper.

How is this idea different to the customized online versions of, for example, The Wall Street Journal?

First of all, improo is not restricted to an online version, but it is delivered as a real printed newspaper (which customers can take everywhere they want). improo provides information taken from many different sources, e.g. high-quality newspapers (like Financial Times, Wall Street Journal), Weblogs, professional journals, or information service providers (like market letter, newsgroups or notifications from eBay or Amazon). At the same time, a customized edition contains only information which meets each individual reader’s demands.

But why do customers want a personalized newspaper? Is not the element of surprise a major part of the enjoyment of reading the morning paper?

Most people are reading always the same sections of their usual newspaper. Day by day, they are overstrained by information overloads and spend a lot of time for filtering and seeking for the right information. Therefore improo saves time and fits the more individualized lifestyle of today’s modern society where people have several very special interests and hobbies. Furthermore improo still contains “surprising” breaking news and some kind of serendipity for this reason. And imagine, if you have much more news likely closer to your interests, or to the interest of your peer group, than -- I believe -- you will have much more surprising news and effects than a general newspaper can usually provide.

Who could benefit from your innovation improo besides the reader?

There is a clear business case. Not only our own studies, but other studies as well predict a market size of several hundred million Euros just in the German-language region. So anyone interested in becoming part of this great venture is invited to approach me for a joint realization :-)

This sounds like a perfect long-tail-application. Given these advantages, why do we not all read a custom paper already? I believe the technology is not the main hurdle anymore.

Technology is only one hurdle besides consumer acceptance and investment barriers. The improo system is a complex one which has to be developed especially for this purpose. Yet there is no product or system comparable to this. Although consumer demand has been approved by a representative survey, such an innovative product requires rethinking and open mindedness. But since people are getting used to customization through customizable internet online portals and news aggregation services, there is already a lot of acceptance. Actually many people already read customized news and retrieve specialty information via internet. A printed individualized newspaper is just the next evident step.

How do media companies and publishing houses react if you discuss your ideas with them?

In several discussions we discovered a wide interest in our individualized news paper. Especially traditional publishing houses suffer from shrinking markets and competition with e-medias. For them improo offers a chance to modernize their business and revive the media industry. However, it is a risky step to try this innovation and – so far- they do not want to take the risk. Others will…

Are there any other good examples of mass customization in the publishing industry?

First approaches to mass customization can be seen in regional/local editions and in books printed on demand. Also, direct mailings often include customized brochures or booklets. Customization in the internet (electronic editions of newspapers) is also common. But there is no publisher who customizes a printed newspaper for individual readers and delivers it to their homes.

Do you see any upcoming trends with regard to new players, technologies, markets, etc. of mass customization in the publishing industry?

As mass customization becomes more popular, new forms emerge, building especially on customer integrated innovation like user generated content. There is a strong demand for localized, specialized and individualized content with high editorial quality and augmented information with additional value like personal market letters or shopping assistants. There is also a new need for intelligent news aggregation. Just think of several millions of blogs out there. Even if only a fraction has high quality content, you still need filtering and customization to read the best and create a high quality of time spent with news.

Your role in the mass customization community is unique as your main job is that of a professor at one of Germany's leading business schools. So how can you connect your professional activities with your academic research? Can you share any recent results of your academic studies?

Yes, of course. The idea to create such a media innovation resulted from my academic research. Also many students and university staff members contributed to the project. Academic and business contacts combine well and I was able to build up a wide network in the areas of publishing, media and mass customization. The research primarily focuses on the acceptance and explanation of mass customized goods. It is evident that users have to invest time, money, and cognitive efforts.

On the other hand there are clear advantages of mass customized products over standard products. We develop integrated models which explain customer behavior and allow for extrapolation of usage patterns. All this is based on large scale empirical surveys and latest multivariate statistical procedures. Thus, academic insight as well as our market research not only advances science but also help to shape market communications and the effective introduction of such a disruptive innovation in the mass market of printed media.

In general, based on your experience both in practice and research, what questions should managers ask themselves when considering to enter the mass customization market?

Is the product suitable for mass customization? Do customers want and understand the value of mass customization? Is the market ready for such an innovation?

Is there a clear benefit of customization which is more than worth the effort? I think this is a crucial question managers should have an answer. Usually, only a market test campaign (piloting) can reveal the answer!

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

This should come at no surprise: A mass customized newspaper. As we hold a bunch of patents in this field, we are at the heart of mass customized printed news. I am very optimistic to hold this innovation one day in my hands!

Contact: Universität zu Köln, Seminar für Wirtschaftsinformatik, insbesondere Informationsmanagement, Pohligstr. 1, 50969 Köln, Germany. Tel.: +49 (0)221-470-5325. E-Mail: [email protected]

Information on the mass customized newspaper is available at www.medieninnovation.com

Update on Music Personalization: Bas Reus analyzes Last.fm and Pandora Media

Some time ago, I wrote about different sites where you can personalize your music. Bas Reus, a student of information sciences at the University of Amsterdam, recently finished his master's thesis on customization in the internet economy, comparing different custom music services.

Now, Bas posted his entire thesis online. It is a great study on a good methodological and scientific level. His main research question is the relation between digital products, mass customization and variety. Building on earlier literature, Bas formulates a number of hypotheses on the relation between variety, the level of customization, the consumer search costs.

The case studies on Last.fm and Pandora show that variety does not necessarily leads to more complexity and higher search costs. On the contrary, Last.fm and Pandora try to increase the interaction between the site and the user to consumers to discover new digital products – and in turn benefiting from referral fees when users purchase this music.

His conclusions:

- Instead of lowering the average interaction length of time (as suggested often in the literature), it may be desirable to increase the average interaction length of time between the supplier and the consumer.

- Instead of lowering search costs for consumers, it is desired for them to discover as much as new products as possible.

- The thesis also stresses the "theory" of the long tail, where abundance of information is something to strive for, benefiting users. But this abundance needs useful customization possibilities to minimize the search costs for consumers.

Read his entire thesis here.

Context information:
- Older post on personalization of music.
- Bas Reus' Blog

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.

Footwear Customization 3.0: The First Rapid Manufactured Shoe

Footwear customization brought to a really new level: Today, I had the opportunity to have the world's first working prototype of a totally new shoe concept in my hands: a 100% laser-sintered shoe. What looks like a normal shoe, is a real revolution and one of the largest achievements I have seen in the mass customization world.

The shoe, developed by Marc van der Zande from TNO Science and Industry (a Dutch research institute) and independent designer Sjors Bergmans of Sjors Bergmans Concept Design, comes out of the manufacturing machine as you see it in the pictures on the left – in one manufacturing process, no assembly required (only some finishing, polishing, etc.)! And no one cares any longer if each product is custom or just a replication of a standard design.

The TNO shoe concept, named 'Head over Heels', is the first application of rapid (digital) manufacturing technologies (more about RM) to an entire product in the footwear industry. Such a concept would allow the rapid customization of shoes to a radical extreme – without any of the constraints of conventional custom manufacturing mechanisms like the need for custom lasts, custom cutting of materials, and a new organization of the work process in manufacturing. With rapid manufacturing, a digital design (CAD) can be transformed directly into a tangible product.

In an earlier venture, UK-Based Prior2Lever introduced a soccer boot that contains a rapid manufactured component, the outsole. But the shoe developed by TNO goes much further. To come up with such a concept, the entire design of a shoe had to be redesigned. A flexible element in the sole allows for high flexibility, and integrated elements in the upper are providing flexible hold.

In the moment, this project is in the proof of concept state. According to a colleague who tested the shoes (in the first design just available in a 38 size), they are at least as comfortable as conventionally produced shoes. Future development will include a wider range of models (including a model for men) and an easily scalable design so that in the end a foot scan can automatically be transferred into a custom design. Also, manufacturing costs have to go down. Today, a pair of rapid manufactured shoes comes still with a heavy price tag of 600 Euros. But TNO project manager Marc van der Zande expects that production costs can be dropped to less than 100 Euro within a few years, given the present speed and scope of application of rapid manufacturing technologies in many industries. With this larger scale, materials and machine costs will become much cheaper.

For me, this shoe presentation today was a great glimpse into the future. Just think five years ahead: Then you may really get your feed scanned, and a moment later, your new shoes will be 3D-printed immediately in the store. With this, the long tail of footwear could be driven to an extreme! But most important, the 'Head over Heels' concept provides a strong further proof that digital manufacturing technologies like laser sintering are not just for prototyping any more, but are rapidly becoming a standard manufacturing technology.

More information on the 'Head over Heels' Laser Sintered Shoe:
- For more information on the footwear design, contact Marc van der Zande (marc.vanderzande AT tno.nl) or Sjors Bergmans (comengo AT gmail.com).
- The concept will also be presented on the TNO Symposium on Rapid Manufacturing, Evoluon Conference Center in Eindhoven, The Netherlands, Tuesday, Oct 31, 2006.

Context information:
- Jochen Krisch recently had a good overview on companies offering rapid manufacturing capabilities for everyone in his blog.
- John Marshall writes about the older, but still great application of rapid manufacturing for the lamps of the Benelux company Materialise.
- And my own more recent posts on customization of footwear, Open Source Footwear and the interview with Sergio Dulio on latest developments in this area.

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

This is so long tail: Newly Launched ZAFU.com Helps Women With Personalized Jeans Recommendations to Find their Perfect Jeans

Personalization as a more scalable alternative to mass customization?

Many women I know share this experience: Looking frustrated at thousands of jeans listed on a search engine, or carrying a pile of denim into a changing room – just still to find not the jean that really fits. ZAFU.com. a new venture by Archetype-Solution's Rob Holloway, wants to provide help – and is the perfect example of an application riding the long tail.

Remember (see post from July 28) that the idea of the now bestselling "The Long Tail" book by Chris Anderson is that today there are (a) unlimited choice and variety, (b) more consumers that want to utilize this variety to find a better fitting product, (c) large profit opportunities for companies not focusing on a few large blockbusters or hit products but on helping customer to explore this variety.

Anderson's book focused on long-tail-applications in the digital sphere, music, books, and movies. But zafu.com brings this into the world of apparel.

CNN described in a press coverage Zafu's concept quite well:

"Sizing jeans to the myriad shapes of women is a challenge even in a department store dressing room, let alone online. Zafu.com, launched this week, arrives as the industry shifts from years of marketing baggy or flare-cut jeans to a skinny silhouette that is much harder to size and wear. "We've taken the trouble to actually measure and check the jean and try it on people to see how it really fits," Chief Executive Rob Holloway told Reuters. "We are the friend in the dressing room, I guess."

Zafu asks women shoppers 11 questions about how they prefer jeans to sit on their hips or waist to create a body profile. That alone is a departure from the incongruous body-type descriptions of "pears" or "triangles" found in fashion magazines and retail catalogues.

The results are used to match the user with as many jeans as could suit them from a database of hundreds of styles, from broadly marketed Gap to pricey Seven, then link them to a retailer to purchase."

In a recent phone conversation with Rob Holloway, he described the laborious process it took them to set up this fit database. They invited hundreds of women in their offices, each woman hat to try on 32 different jeans, all fits being evaluated by the company's own apparel experts. This gave them both information about women's shapes and figures and information about the cuts and fitting secrets of dozens of different jeans brands. To update this information, Zafu has created a streamlined process so that new models can easily being integrated into their database and assortment.

Correct sizing is one of the biggest obstacles to the growth of online apparel and footwear sales, which are expected to rise in the US to $13.8 billion this year from $11.3 billion a year ago, according to tracking firm Shop.org data. Almost 14 billion sounds a lot, but is only 6 percent of total U.S. apparel and related sales.

The jeans market is an interesting market segment. Market research firm NPD Group reports women's jeans sales reached $7.8 billion for the 12 months through March 2006 -- a 10.8% increase over the $7.04 billion reported during the same period a year ago. This data is on top of a 13.7% growth rate of jean sales between 2004-2005. Much of this growth comes from new jeans models and niche designer brands – offering more choice and options, but making the entire selection process also more difficult for women to navigate.

CNN quotes Ellen Tolley Davis of Shop.org saying "Many consumers still want to touch and feel merchandise before they buy it. When it comes down to particular sizing for shirts and pants, there's still some room for retailers to make improvements."

This is exactly what Zafu does. They also provide a service that you will get not from many retail associates: Zafu's web site will tell you also when there is NO jean at all in their assortment to fit your body – asking you to postpone your purchase.

Zafu will tell the consumer outright and suggest she check in periodically as styles are updated. "We wondered, should we be completely honest here and show someone zero [results] or fiddle a bit," said Holloway.

They decided to be honest – and this is exactly where the value of such an intermediary comes from. But according to their estimations, their assortment of analyzed and databased jeans is already large enough to provide an exact fitting jean for 94% of all consumers. And loosing this 6% of sales (theoretical) is a good price to pay to show to the other users that they are really serious and honest about fit! Early users of the service seem to love it a lot, as this customer review suggests.

Zafu also allows women to save their profile making the process even easier next time they return. This helps them also to inform customers when a new jean is added to their assortment that exactly fits their body style. However, if a user does not want to leave any data, she does not have to do register etc.

And how does Zafu make money?

First, there are provisions for each sale. Zafu does not carry any inventory, but directs customers directly to the web sites of affiliated retailers and gets the usual commissions between 5-20% of each sale.

Second, they will provide in-house fit recommendation services to online and offline retailers, helping the customers of just one brand to navigate the assortment in a store or online shop better.

Third, I believe there is a lot of potential to extend the service to other product categories, becoming the one-stop style adviser for women with regard to fit. This could also provide some nice aggregated market research data, another potential source of revenue. For this, a cooperation between My Virtual Model and Zafu would be a perfect option.

For me Zafu is also an interesting business model as it provides another alternative to real mass customization. Zafu's parent company, Archetype, launched in 2003 a fit consulting business that provides mass customization services to some of the leading apparel retailers and brands in the US, including Land's End's Mass Customization business.

Zafu's personalization service is an alternative model. It may not have the inventory advantages and value prepositions of mass customization, but provides a much more easy to implement and much better scalable system. The future will show where there is more value for customers. I believe that both models will work hand in hand and supplement each other: For most consumers, a better matching service as zafu.com will provide sufficient value. For others, however, the ultimate product will still be the truly custom jean -- providing not only perfect fit, but also all the hedonic satisfaction connected with a custom product.

Updates: "Customized online fashion finally clicks with consumers": A journalist tests zafu.com (and competitor myshape.com) [Thanks to madeforeone.com for this link]

Report on Internet-Retailer (Nov 7, 2006): Shopping.com, a large shopping portal, has partnered with zafu.com to launch a women’s jeans finder on the shopping engine. The new feature, accessible under a link from women’s clothing category pages on Shopping.com, carries shoppers who click on it to a co-branded web site that guides them through the process to yield a selection of jeans and then links to the merchants where they may be purchased. The feature exposes shoppers using it on Shopping.com to brands they might not have previously known about or considered, but which might be a fit for them. “By suggesting new brands, styles and fits for shoppers, Shopping.com can offer them more relevant choices via a recommendation expressly tailored for them,” the company notes.

Update (20 Nov 2006): The New York Times had a good review of Zafu.com. on Nov 20, 2006 While the article in general praises the Zafu service, it remarks that it does not weigh heavily enough a user’s brand preference. But the label of a jeans is a as a big factor as the fit.

Mass customization and The Long Tail -- A review of Chris Anderson's book

What a coincidence: Today I finally finished to read Chris Anderson's bestselling book "The Long Tail", and today Donal Reddington, editor of the MadeForOne blog, posted an extensive review of the book. Donal's review is worthwhile to read as it has a special focus on mass customization.

[ I assume that you are familiar with the Long Tail idea. If not, Wikipedia has a good summary, Chirs Anderson an entire website, and Wired the article that started it all ]

I enjoyed reading the book very much and recommend it to everyone interested in mass customization and open innovation. Even if the book is highly focused on digital goods, it provides a number of convincing arguments why firms need to find better answers on the growing heterogeneity of demand -- and what the role of users is to shape and provide this demand. But as Donal Reddington notes, The Long Tail is not a book on mass customization:

"It does provide examples of mass customization as evidence of the growing power of the tail, but it is principally about leveraging the potential of massive product variety.

The long tail concept presumes that the product is available - sometimes on a build-to-order basis, but more often from stocks already held. This aspect of the long tail idea is at odds with the mass customization idea, which presumes little or no finished stock inventory, with products being made only after they are sold. …

The growth of more ‘democratic’ markets is also shared between mass customization and the long tail. One example is the growth of peer production, where individual members of a large group propose new products (such as new music, Lego toys or t-shirt designs), which are then rated by their peers within the group. The most successful are then made available to the open market. This displays characteristics of both the long tail and mass customization. Also, the growth of the long tail make build-to-order more feasible in many markets. Lulu.com can publish a book for you and print copies in tiny numbers to fill orders on-demand."

I personally took away from the book:

-- The story of Sears, and how this company was founded 100 years ago to provide rural customers with more choice and variety;

-- A great argumentation regarding the "mass confusion" and "too much choice" debate: As Anderson correctly remarks, there is not too much choice, but just too little intelligent support and filtering helping users to deal with variety. This chapter of the book (the tenth) should be a must read for all people dealing with configuration systems for mass customization – as providing better choice for customers should be the core of any configuration toolkit.

-- The idea that measuring actual demand ex-post is better than today's dominant logic of forecasting and predicting demand by market research ex-ante. Anderson writes: "Rather than lumping consumers into predetermined demographic and psychographic categories, post-filters such as Netflix's customer recommendations treat them like individuals who reveal their likes and dislikes through their behavior." The same idea is the underlying logic of a co-design toolkit (when compared to a shelf with standard goods): Instead of making decisions which product configuration the majority of customers presumably would like, a co-design toolkits provides this choice to the customer.

The final chapter of the book, Anderson's glimpse into the future, tackles a topic that I have discussed several times in connection to mass customization (see earlier posting): the advent of rapid (digital) manufacturing technologies like laser sintering or 3D printing.

Donal Reddington: "Andersen rightly states that if digital manufacturing can be developed to output more complex products, then almost every market will become a digital market. In the same way that online music can be downloaded now, someday the design for pretty much anything else might be downloaded someday and manufactured at home. Then every market will be a long tail market, and the cost of carrying infinite variety of stock will be zero for everything."

So: Read this book, buy a 3D printer, and start your own Long Tail economy.

Threadless.com – when mass customization meets user innovation meets online communities (Updated)

(Update of the original post from August 2005) Threadless.com is a young Chicago-based fashion company that follows an innovative business model mixing customization with new ways of customer interaction to create high variety products without risks. Started in 2000 by Jake Nickell and Jacob DeHart, Threadless.com focuses on a hot fashion item, t-shirts with colorful custom graphics. All products sold by Threadless.com are created by some if its users and inspected and approved by user consensus of the entire community before any larger investment is made in a new product. Customers evaluate potential new designs before the production process starts. Top-rated submissions are transferred into final products and produced in limited editions (their creators get $2000 as reward, and their name is printed on the particular t-shirt’s label).

Since its launch, over 400 winning designs have been chosen for print from more than 40,000 submissions. The company builds on a large pool of talent and ideas to get new designs (much larger than it could pay if the design process would have been internalized), enabling it to identify new trends early and transfer those into a product design. The Threadless community is thriving with over 300,000 users signed up to score designs (in 2005, an average of 1,500 new users were signing up per week).

Compare this idea to traditional customization: Instead of investing in highly flexible manufacturing systems and dealing with individual custom designs, the company focuses its energy to draw creative designers to submit new designs, and to facilitate the evaluation and voting process by its customer community. The often costly elicitation process of a mass customization system is substituted by the pre-order taking and a voting mechanism of a large number of customers.

Instead of customizing individual products, Threadless.com has a system of “custom mass production”, building on the early involvement of some (expert) customers in the development process of new product designs and the refinement of their ideas by a larger customer groups (this idea has been described already in 1998 by G. Elofson and W. Robinson in a paper for Comm. of the ACM, but has never took off in practice).

Motivated by its success in the young fashion market, the founders of the company have recently extended their categories to formal wear like ties or polo shirts (http://NakedandAngry.com) or music (http://15MegsofFame.com). It will be interesting to see how sustainable this business idea is. In the moment, it is highly successful and a very interesting alternative to conventional mass customization.

More information:

In a recent paper with Susumu Ogawa, we looked into more detail on the Threadless model. The paper has been published in MIT Sloan Management Review, Issue Winter (January) 2006, pp. 65-71. Abstract & Download here.

In a second paper, Petra Schubert, Michael Koch, Kathrin Moeslein and I comment on the possibilities how communities can support customer co-design: Journal of Computer-Mediated Communication, Vol. 10 (2005) 4 (August).
[http://jcmc.indiana.edu/vol10/issue4/piller.html]

Recent good posts on Threadless with more information can be found here:
Business 2.0,
Exciting Commerce,
Crowdsouring,
Innovation Lab DK,
a good interview with jacke Nickell
and of course at Threadless themselves.

New Factory121 Watch Co-Design Toolkit Launched – Best-Of-Class Example For Online Configuration

After months of development and testing, the new configuration toolkit of Factory121, the Swiss custom watch manufacturer, has been launched. Already the earlier version of this toolkit has been a great example which I have used often as an illustration of a "perfect" online configurator for BtoC in my lectures and keynotes. The new version brought the tool on a new level, and is a model of what a good online configurator should be able to do.

It is a great example what is possible if a configuration tool is developed and implemented purposeful and with understanding of the specific demands of mass customization. The new version, launched in April 2006, has reinforced this evaluation and has set a new industry standard. There are still some minor bugs to be worked out and some possibilities for improvement remain (and co-founder Daniel Morf has told me that they are working on fixing these errors), but already at this stage the configurator is leading edge.

The main elements which I consider as best practice of the new 121TIME toolkits include:

- Different entry points into the configurator (direct, from the catalog, from an mailing, etc.)

- Strong and thoughtful pre-configuration (very important point to reduce complexity from the customers' perspective)

- Good structure of the different co-design levels (while rather complex and pretty filled, the screen nevertheless allows for a easy navigation between the different design options)

- High usability and representation of rather complex design opportunities, creating a flow experience of the user

- Strong rule set preventing "bad" designs (try to design an ugly watch, this is really difficult)

- Several options to safe, compare and share designs

- Very good "consultancy" and help functionality (plenty of fields explaining you all options)

- Strong and fast visualization (try the zoom function)

- Modular pricing system allowing each customer to purchase a watch according to her own willingness-to-pay (Factory121 is one of the very few companies in the customization BtoC market utilizing this opportunity)

- Possibility to use place the toolkit in a customized way in affiliate web sites.

While single aspects of this configurator may be matched by other online configurators, it is the combination of all of its features that makes the 121TIME toolkit superior to other. Try the tool here (as with many new internet tools, you need broadband for a good experience; but still sometimes the company's server performance seems to be slow): http://www.121time.com

Innertee: Mashing Up Open Innovation, Distributed Creativity, and Mass Customization

I have written here before about Cafepress, Spreadshirt or Zazzle -- companies that mix peer production, micro-branding, mass customization and viral marketing. Add to this another hot trend of Web 2.0: Remixing. A new web site called Innertee is mixing all these ideas to create something pretty cool: t-shirts remixed. Not yet launched, but open on a beta site and with plenty of information in the founder's blog, Innertee is a site that combines open innovation and mass customization.

It has its own design language: (1) An "element" is defined as any original artwork submitted for sharing. (2) A "design" is any combination or "mix" of elements.

On the element level we have open innovation, something that Threadless.com has perfected in the world of T-Shirts. It allows everyone ("artists") to submit artworks, thus using the talent distributed in an entire design space.

On a second level, however, also users ("mixers") not feeling like a great artist can participate. By mixing elements into an own design, they create a custom product that is then produced on-demand by Innertee. Mixers also can sell their creations to others. In both cases, the originator (artist) of the elements used in teh design gets a provision – and earns respect and attention in the community.

Miles and Jamie, the founders, have been working on the idea of Innertee for the past three years and it’s been an interesting journey. "We stared a business called Scribe Graphics as a traditional screen printing (anti-technology) business in 2003 as a means to be able to hang around in our garage and drink beer without the fear of reprisal from our families and lurkers in the neighborhood", Miles says. Eventually, the screen printing business morphed into a design concept / brand called Red Army Surplus Co. Now, they want to bring it on a next level with Innertee.

I regard Innertee a promising business idea as it both acknowledges that there is great design talent out there, much more than a traditional firm could incorporate behind its walls, but that at the same time most customers are no designers and are not willing to fully customize an aesthetic design. It will be interesting to see how artists develop a new design language suitable for mixing and matching. Not the artist will be most successful who submits the most unique design, but the one who submits the most "mashable" design, i.e. a design that can be used by many "mixers" as a platform or starting point for a new mix.

More information? The founders publish an interesting blog with plenty of information on their project.

And Patty Seybold has a great posting on remixing and "mash up" in general on her blog.

Pimp my IKEA: Bemz Furniture Customization

Give your sofa a second chance.

Combine mass production and mass customization in a clever way -- and you have a great business idea. This is exactly what Bemz, a Stockholm, Sweden, based company is doing. Founded three years ago, Bemz sells removable, washable slipcovers fitting the most popular models of IKEA sofas and chairs.

Bemz has chosen to focus on one specific competitive advantage: to offer their customers a unique product that they could not get easily in another way. The whole process is very lean and well crafted:

Products are sold exclusively on the internet, and all products are made to order. Customers choose from a huge selection of colors and patterns for the most popular IKEA sofas and armchair. Pricing is rather competitive compared what you would have to pay if you order these goods with a tailor, given that they have high quality fabrics only (Bemz is 100% private owned and not affiliated with IKEA).

Bemz focuses on the part of customization that is really important to customers: the design. To do this, they use a great standard platform: an IKEA sofa (given the market share of IKEA in Europe, this is a real standard platform). Bemz just produces a high-value upgrade for your sofa which you can "assemble" by your own – no tools required.

But this is also a win-win situation for IKEA: Their products are getting more interesting and valuable for consumers, but IKEA can focus on their main skills (mass marketing, distribution and design), but does not has to bother with an exploding complexity of custom designs.

What could be improved: Given the strong focus on customization on Bemz's web site, they could offer a bit more customization. While choice is not always valuable, for this product more fabric options could offer more value -- given that this is a product for the after-sales market where people may have very specific needs for decoration. And with regard to Bemz' limited customization options today, the delivery time of four weeks seems to be rather long, given that the actual throughput time in manufacturing is probably very short.

But overall, I really liked this example as a very lean and clean mass customization offering. Just imagine what you could get if you combine Threadless' user innovation and design capabilities (their sub site nakedandangry.com has wonderful patterns – just made for sofas!) with Bemz' custom manufacturing skills and IKEA's standard platform: this could become furniture mass customization 2.0.

Lego Factory hacked by users -- and the company loves it

I have reported in this newsletter on August 30 about the new LEGO mass customization venture, Lego factory. Just a couple of weeks after its launch, the venture got a new drive and development. Here is an update:

At Lego Factory, users can create their own unique Lego models – using interactive software that helps them to overcome the engineering problem of combining basic modular elements (Lego bricks) into a new creation. Also, compared to the conventional building sets of Lego, the users are not restricted to the distribution of bricks in a pre-fabricated kit.

This is where mass customization comes into play: With Lego Factory, the company manufactures the bricks necessary for the model and ships them to users so they can assemble their models. Customers can also buy the bricks necessary to build from other people's designs, which are posted on the site.

Lego Factory is based on a toolkit for user co-design, called Lego Designer, a free, downloadable, 3D modeling program that lets users choose from digital collections of bricks to compose their own unique models. But as in many cases, once a company offers its users an innovative, more interactive way to create new products, some users want even more.

Already 15 days after its launch, the web site was hacked. The problem was that Lego used a simple algorithm to assign bricks to a user's unique creation. Instead of matching the blueprint with the exact number of the correct bricks, the Lego assembly center has pre-packed packages of bricks, and matches a user's designs with these packages.

The result: users got (and paid!) often for far more pieces than they really needed. At the same time, they were missing a few others that were integral to the creations, and had to purchase more packages. That made designing and buying models sometime very costly. While a child using her father's credit card wouldn't bother with this problem, adult fans of Lego, who adopted the Lego Factory rapidly, did.

So the adult Lego community became innovative: They collected information about the exact combination of each brick package (called a palette in Leo Factory language) and compiled this information in a database that lists which bags must be purchased in order to collect specific bricks. On top comes an algorithm that optimizes the number of bricks based on a user's design by making modifications in the design or at least promoting a warning if a user selects a part that would cause an additional order of a package of bricks.

In a great article about this user initiative on CNET Networks, the author Daniel Terdiman quotes Dan Malec, one of the user developers (Malec is a software engineer from Stow, MA):

"You'd see a lot of fan creations [on Lego factory] costing $400 or $500 because fans are not using the bags efficiently. If you could see it at the bag level (instead of the larger digital palettes offered by Lego), maybe you might make a different decision. Maybe (instead of buying) that one piece which takes a whole bag that you're not going to use, you might choose a different bag."

So users created a very beneficial addition to the company's offering, however once that undermines Lego's sales opportunities. But most astonishing, Lego's reaction has been largely positive. Terdiman quotes a Lego executive that "the adult community found out within a few days (of the Lego Factory launch) how these bags were mixed together. It was a puzzle to us. They took us completely by surprise." But the Lego manager added: "We really encourage and embrace some modifications of our software."

And while in the moment Lego has not incorporated the development of the Lego fan community into its proprietary Designer software, it may do so in the future:

"It's not surprising to us that they're doing the hacking, because that was the hope, that they would take the core of what we're doing and own the system" for themselves, Jacob McKee, Lego's global community relations specialist is quoted in the CNET Networks article. "We want to release more and more content and development tools to help that process along. The hope is that they really start to take this on and start to do things we haven't even thought of yet."

This is really an astonishing remark and could serve as a role model for many other companies who often fight against user modifications and do not recognize the input from the company. And will it pay off? I strongly believe so. Just google for user comments on Lego's reaction on this user hack, and you see that customers just love a company that encourages its users to become innovators.