Mass Customization & Open Innovation News

Lego CUUSOO: How Lego Turns Your Ideas Into Cubic Reality

LEGO's Factory (later called "LEGO Design by me") has been one of the pioneers of mass customization.However, times change and Lego closed this "build on demand site" about a year ago and focused entirely on customer co-creation in the innovation process.

For this, they are partnering with CUUSOO; the mother of all crowdsourcing sites for product development (we described them in our 2006 paper on Threadless already!).

The project is called Lego CUUSOO and wors fairly simple: Everybody can submit an idea of what he would deem a great Lego product. Customers get to vote online and if the proposal gets sufficient buyer pledges the company turns it into reality and produces the toy.

Noew, there is a nice video giving more detail on this idea, it makes you instantly grab a pen and paper and start drawing your own powertoy idea...

 

Your Opinion on the Future of Mass Customization: Participate in two short surveys

We would like to tap into the joint intelligence of the MCPC community and ask your to participate in two short conference surveys -- results will be posted here:

Dominik Walcher and Frank Piller want to learn about your opinion on the market development for mass customization. How is the market of mass customization (MC) and personalization growing? What will be the developments in the next years? Please help us to get a better picture of the MC future! Participate here:http://www.tiny.cc/mc-future 

 

Ryan Chin and Daniel Smithwick of the MIT Media Lab, are studying product life-cycle energy use of customized dress shirts to understand how to develop more sustainable products.  Please complete their 6-8 minute survey (https://www.surveymonkey.com/s/MCPC2011) on your current dress shirt wardrobe and you'll be entered into a lottery for a FREE custom men's dress shirt worth $100 retail value.  Pretty fancy stuff.  Survey and prizes are open to both men and women!

Crowdsourcing and crowdfunding meets mass customization - Innovative investment model for startups

A group of entrepreneurs from RWTH Aachen university have developed an interesting model of crowdfunding in the early / seed financing sector -- and one of their first projects is a mass customization start-up in the game market.

The start-up, Innovestment, is a crowdinvesting platform for startup-investments. It is not a micro-financing site, but more one that allows people with a real demand for investing money the opportunity to participate in innovative conceots with low risk.

The model is based on "silent partnerships" (a well established legal form in Europe),  and the pricing/valuation will be done through an innovative auction mechanism.

The first auctions start at the end of October, and the first three profiles of participating ventures are online. Investing is possible with amounts starting from approx. Euro 2,000.

One of the first ventures in the Innovestment line-up is a mass customization project called Ludufactur. Drawing on the Germans’ fondness for board games (think of "Siedler"), Ludufactur will exclusively personalize many best-selling games using technologies like 3D modeling and printing (e.g. modeling a pawn after a fotograph), thereby mainly catering to the market for gifts.  Their website is not yet online, but a few promising examples can be viewed on their profile at innovestment.

So if this is successful, a new way also for other mass customization sites may be open!

More info at www.innovestment.de.

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.

 

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

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

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

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

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

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

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

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

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

MC Alternatives (II): Additik tunes your IKEA furniture

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

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

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

Distributed user manufacturing network started: Ponoko and ShopBot announce partnership to provide users access to over 6,000 digital fabricators around the world

During the 2007 US Presidential debates, journalist Tom Brokaw asked candidates Obama and McCain whether our challenges would be best solved by ... "funding a Manhattan-style project or by supporting 100,000 garages across America to encourage the kind of industry and innovation that developed Silicon Valley?"

A new website takes the second approach! Inspired by Tom Brokaw's question to the presidential candidates, 100Kgarages is a community of workshops all over the world that are run by "Fabbers", with digital fabrication tools for precisely cutting, machining, drilling, or sculpting the components of any user  project.

The site has been launched on Sept. 16 by Ponoko and ShopBot, expanding the opportunities for ordinary users to get almost anything custom made and delivered from local state-of-the-art digital makers.

I have written several times about Ponoko in my blog, an online marketplace for everyone to make real things. It brings together creators, digital fabricators, materials suppliers and buyers. Since its launch in 2007, more than 30,000 user-generated designs "have been instantly priced online" (the official wording in the press release, I believe this means "uploaded and finished", but not ordered and delivered).

ShopBot is a manufacturer of affordable, high-performance CNC tools for digital fabrication of wood, plastic and aluminum products. With more than 6,000 ShopBots in thousands of shops in the US and 54 countries around the world, ShopBot is one of the largest producers of CNC routers in North America.

With the cooperation of the both companies and the launch of the 100kGarages website, anyone can get their ideas made locally with the click of a mouse, and delivered within just a few days.

Users can go to the site to get things custom made by searching a map for a local garage workshop, or submitting a request and choosing from bids placed by a range of ShopBot owners to make almost anything. It’s free for everyone to search and submit requests, and for fabricators to post profiles and bids.

People are creating a wide range of products like tables, chairs, cabinets, car parts, signage, boats, musical instruments, gaskets, sheds, housing and all of those impossible to find things made from wood, plastic, metal and composite materials.

“Our partnership means everyone now has easy access to their own local 3D fabricator. This is the first step to providing a solution for the doers and makers out there who want to join in re-building America, one garage at a time.”, says ShopBot’s President Ted Hall in the press release.

In the moment, the site still looks a bit beta, but it is a great starting point and another sign of the coming age of user manufacturing.

Dream Heels: A Threadless for High Heels

I was for long wondering what may be the next big product exploiting Threadless' spin of crowdsourcing ... and perhaps Matt Francois found a perfect match. While the majority of Threadless' customers are young male men, Francois is offering the female equivalent: High Heels.

His new website, Dream Heels, lets anyone design printed high heels and earn cash when their design is winning a competition, Artists submit their designs to an ongoing shoe design competition. Winners are rewarded with $250 upfront, and $0.50 for each pair sold.

“Dream Heels lets you design printed pumps that are completely unique; Wild patterns, colorful designs, you name it.” Founder and owner of Dream Heels, Matt Francois, is quoted in a press release, “I’ve designed one-of-a-kind custom shoes for years, and I know that given the chance others will enjoy designing unique shoes as much as I do. The extra cash is just the icing on the cake.”

For more information, or to begin designing shoes now, head to http://www.dreamheels.com

There is a rather simple template to use and a very nice 3D viewer to get an idea of the shows.

Will this work? I am curious to see .. Being a critical German and not part of the target group, I would say no, as the product's price point may be to high for a spontaneous purchase (there is no price quoted yet, however). Also, production runs for such a shoe should be considerable longer than the few days it takes Threadless to produce a shirt, allowing them to cash into the moment of excitement that a design wins for which you just have voted.

Also, with shoes of this kind you have a fitting problem, and returns of more than 50% may kill you if you are a small company with little cash. And, finally bit most importantly, will their be a community of shoe enthusiasts that both submit shoes and participates in the voting -- and finally purchases the shoes?

But I hope that I am wrong, as the idea and product itself is great ... and it really is time for a successful and scalable transfer of the Threadless idea into another product category.

Interview: Joel Yatscoff of Joy de Vivre on Microfinanced Crowdsourcing and How He Helps Creative Designers to Get Their Products Out to Consumers

I recently wrote in this blog about Joy de Vivre, the Toronto based company that lets consumers vote on its product assortments. In this interview, founder Joel Yatscoff provides us more information about his vision, how the idea got started (Joy de Vivre seems to be again a typical case of an user innovation, originating from a frustrated user), about first successes and challenges, and what is coming next. His basic motive of democratizing the process how designers can get their products out to consumers, bypassing the power of traditional manufacturers of choosing and investing in designs, reminds me of Ronen Kadushi's idea of open design – different approach to the same problem.

Joel Yatscoff is a Toronto-based product designer. Originally from Beaumont, a small French Community in Alberta, he later studied at the University of Alberta and received his Bachelor of Design with Distinction in 2003.  Currently working in a product development consultancy in Toronto, Joel has also interned at Karim Rashid in New York City in 2002.  He has been recognized nationally and internationally for his roles as a freelance, collaborating, and supporting designer by the Chicago Athenaeum Good Design Award, IDEA, and Conduit National Design Competition.  Joel is also pursuing post-graduate studies in design management at Ryerson University.

Frank T. Piller: Joel, what was the insight and inspiration that motivated you to start Joy de Vivre?

Joel Yatscoff: I had been tinkering around with this concept since about 2006.  I had been out of post-secondary studies for 3 years and had been pitching some really great ideas [of product designs] to companies in New York with my good friend and business partner Bradley Price.  As I remember, it was about our 3rd consecutive year of pitching concepts with limited success.  I was getting really frustrated with how our great ideas were only receiving lukewarm reception but the company was producing real garbage.  We were biased towards our work of course, but it really seemed like frustrating process where we were acting more like salesmen than designers.  This was really the start, thinking there must be a better way for designer to get their great ideas to market.

At some point I remember hearing about Muhammad Yunus’ Nobel prize for micro-loans.  I found the concept of raising money through small increments very inspiring.  I think that lodged somewhere in my head and I thought it made sense to raise the great sums of money required for consumer product manufacturing.

I slowly formulated the business structure in my head and was encouraged to write a business plan to clarify and refine my concept.  I also began to notice that a few companies were really starting to use crowdsourcing to develop goods and it was only a matter of time until someone decided to apply it to consumer products.  As I didn’t want to regret not giving it a shot, I plunged in.  I took the fall of 2008 off from my continuing education studies in design management to devote time towards setting up the business.  And here we are now, 2 months in.

FTP: What are the first experiences with Joy de Vivre? Which reactions did you get, and what are your early users saying?

JY: The first experiences are very, very positive.  Everyone is very excited about the idea and really hope that it works out for us.  Our sales and traffic are slowly increasing, but am impressed with the impact we have made in just over 60 days.  Most interesting is following we have developed from Australia, Germany, and Israel.

FTP: Can you tell us a bit more about yourself? Do you have any personal experience with crowdsourcing?

JY: By education and experience I am a product design that has been practicing since I graduated from University in 2003.  I’ve had the opportunity to work as an in-house, freelance, and consultancy-based designer.  These jobs have allowed me to work on projects that range from municipal water treatment products and peritoneal dialysis machines, to dog toys and water bottles.  I have a real passion for well designed products and love the industry.  Other than that, I’m getting married in July and realized a year ago that I should have been sailing my entire life.

I don’t have any real first hand experiences with crowdsourcing other than my fiancé buying shirts from Threadless.com.  I wouldn’t say I’ve studied crowdsourcing or anything, I just find it a natural process.  As the old adage goes, “many hands make light work.”  The internet has allowed many more “hands” to get involved than would have been possible in the past.

FTP: How do you think Joy de Vivre is different to similar crowdsourcing companies? How do you want to make it special?

JY: Currently, no one else is using crowdsourcing to procure new ideas for consumer products and fund them.  Some sites are using crowdsourcing to spotlight products or designers, to source all their designs like threadless.com, or fund the upcoming albums of new bands, but no one has applied this to capital intensive projects like consumer products.   This is the biggest difference.  

Threadless does a great job procuring really great graphic designs and then has a small investment to bring them to market (buying the shirts, creating the silk screens, etc...). But consumer products are quite different.  We still have to procure the ideas but we also have to pay for substantial costs upfront before anything is made.  Tooling costs for consumer products start in the tens of thousands of dollars and can get into the hundreds of thousands of ideas very quickly.  This is why we pre-sell the products: we raise the money to pay for all the capital costs.  It significantly reduces any financial risk we take on and eliminates the risk for the consumer as we refund any money if the product is not fully funded.

We really want to make Joy de Vivre special by offering designers an outlet where they are encouraged to submit their ideas (not rejected like at most traditional manufacturers), offered fair, competitive compensation, sell really well designed, beautiful, and functional products, and reward our community by compensating them for helping to fund the product’s development.

FTP: What is the source of the designs? Who are your first designers?

JY: The first product we made available for funding, Cellule, was designed by Bradley Price and myself.  We had designed this modular lattice a long time ago and I always thought it was great idea and was puzzled why no manufacturers had jumped on it.  It seemed natural to launch with this product as it seemed symbolic of why I founded the company.  The second product, Terence Cooke’s “Fruity Bowl”, was a submission (full disclosure, I’ve known Terence for several years).  From this point, we will only be making products available for purchase that proves popular from our community.  This is in keeping with our crowdsourced model and will really help ensure whatever is made available for purchase will sell really well.

We should have no shortage of good ideas that will be submitted to our website.  Most product designers are always tinkering in their spare time to either build up their portfolios, create submissions for design competitions, or to pitch new concepts to manufacturers.  In time we hope that designers will be designing product just for us and then we will have a steady stream of product ideas.
 We will hopefully be giving all these beautiful, orphaned ideas a good home.

FTP: You also announced an open design competition. How will this take work?

JY: Yes, in a sense we are running an ongoing design competition.  Unlike traditional manufacturers, we are encouraging designers and innovators to send in their product ideas.  Normally, it is very difficult to make a good contact in an organization to pitch your ideas and most of the times they don’t accept design submissions if they have not asked for them.

We have now setup a submissions and voting platform where designers can submit their product ideas and our community can vote on them.  Popular ideas rise and less popular ideas sink.  We will be closely monitoring the submissions and ideas that do really well be chosen for production.  The submission process is really easy: all a designer has to do is upload a short description of the product and a few nice images.  The onus is on them to clearly communicate what the product is and really sell to the community.

FTP: A critical success factor for your business will be to gather a large enough crowd that follows the proposals and votes for them (with their money). How do you plan to create this movement?

JY: I couldn’t agree more, a big crowd makes or breaks this model.  We have a promotion strategy that has several fronts to get the crowds to us.

First, if a designer has a product made available for funding or voting, he/she has an incentive to spread the message to friends and family.  The more votes or purchases of that designer’s product the better its chances getting picked for production or become fully funded respectively.  We also hope that our consumers will spread the message.  Since we are rewarding everyone who helps to fund a product’s development, there is an incentive on the purchaser to tell friends and family about their purchase and encourage them to also buy.  More sales greatly increase the likelihood of a product being manufactured.  It is word of mouth advertising and is very potent.  We’ve already had purchasers of our first product promote the product and generate additional sales.

Second, we promote all the products that are made available for funding.  We have begun developing an extensive network of online and traditional media to publicize our new product offerings.  We are now able to send out a press release to a few select blogs and be quite confident of receiving a posting.  This allows us to very quickly disseminate a press release and really ramp the site traffic up.

Finally, we will be complementing the product promotion with our blog.  The blog highlights emerging designers and great products which are not being manufactured.  The blog combined with the submission/voting forum will slowly build up the community and make us a hub for emerging designers and products are not in production.  We are aware of how long this may take, but we are slowly getting there and have been surpassing all our site traffic targets to date.

FTP: In general, what are recent trends you see with regard to crowdsourcing and open innovation? What will be next?

JY: I see many more companies forming like us but for specialized products and services.  You already see many bands raising the funds to record their next albums through crowdsourcing models.  I’ve heard most recently of over $75,000 being raised for a female artist to record her latest album.  Her last track on the album has her singing out all the names of the people who helped raise the funds.  

With this kind of money able to be raised, it really opens doors to many more types of products and services.  The effect will likely be thousands of smaller companies using crowdsourcing and micro-financing to make product and services.  While I don’t believe the traditional Ikea’s will ever disappear, the consumer will have a lot more available to them because they will be helping to define what they want.

For more information, visit joydevivre.org or contact Joel Yatscoff at
joel (at) joydevivre.org or 364 King St. East, Toronto, Ontario M5A-1K9, Canada

Joy de Vivre: Collective Customer Commitment and Crowdsourcing in action at this Canadian startup

Via Burkhard Schneider's Blog, I got notice of Toronto, Canada, based Joy de Vivre. The start-up opened its doors last month and is entirely based on the concept of "collective customer commitment" that I described in 2006 in a MIT Sloan Management Review Article with Susumu Ogawa: Get the commitment of customers via crowdsourcing first before you invest in final product development and production.

On their website, Joy de Vivre descirbe their concept as follows:

"Product development is very expensive due to the high capital costs involved with prototyping, tooling, marketing, and distribution of products. Thousands of great ideas never make it to market because a manufacturer is not willing to risk money on development costs.

Using the crowdsourcing potential of the internet, these costs can be distributed over many people, making the individual costs affordable. We raise the capital required to manufacture a product by pre-selling its production. The retail price paid by you, our community of engaged consumers, is placed a development fund. This small figure, multiplied by hundreds or thousands of people, fully funds the product development costs. Designers get their idea made, you receive your product, and we all share in bringing a great idea to life. If the product doesn’t get fully funded, you get your money back."

One of the two products recently listed on the site is the "Fruity Bowl", a -- surprise -- Fruit Bowl for $34.00. Designed by Terence Cooke, the company calculated that they have to pre-sell 1500 units of this product to go into production, The clock is ticking, 105 days to go. Remember: While the pictures look great, Fruity has not yet been manufactured. In order to bring Fruity to life, customers have to fund it. The funding period for Fruity lasts for 16 weeks beginning from its first sale. Within this time period, Fruity needs to sell a minimum of 1500 units to be manufactured. If Fruity is not fully funded within the 16 week period, all purchases are refunded within 4 days.

For a more comprehensive description of their approach, go here: http://www.joydevivre.org/pages/how-this-works

I am curious to see whether this will work. Its success strongly will depend from (1) the buzz the company can create to generate traffic and bring potential customer-investors to their site; and (2) the quality and appeal of the designs. But Threadless has shown that the basic model works! So let's follow how Joy de Vivre is doing.

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

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

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

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

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

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

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

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

RYZwear.com: Applying the Threadless Concept to Footwear

"At RYZ we’ve set out to create a people’s brand – a community of designers, sneakerheads and anyone that cares enough about art, fashion or sneakers to speak up. Together we’ll create sneakers that are designed and chosen, not by some big, faceless corporation, but by you.

Think of RYZ as a stage for designers to showcase their creativity and a forum for people to define what great sneaker design means. In other words, we just make comfortable sneakers – the rest is up to you."

This is how Rob Langstaff announced his new business just one month ago, ryzwear.com The hope of RYZ is to become the Threadless of footwear, connecting people who design custom sneakers with those that vote on the designs and purchase. I am wondering since long what could be good fields where the extremely profitable Threadless idea can be applied to, and footwear could be one option.

Rob Langstaff is not an outsider of the sneaker world. The former Adidas America Inc. president has turned the business model of its former employer upside down, Instead of assigning design jobs to inhouse designers, he is relying on online clusters of consumers to design products and figure out which ones to sell. "In Ryz's case, it's MySpace meets "American Idol," with footwear as the unit of expression", as an online report called the business model.

"The corporate design team is limited by its walls," Langstaff is quoted in the news report, "The corporation shouldn't be dictating what the consumer wears. The consumers should."

This is how RYZ works:

• Each month, Ryz will post a different standardized shoe silhouette on its Web site (a high-top shoe and a low-top shoe were the first two). Users can download the template and, using Adobe Photoshop, illustrate or add images across the shoe.
  
  
• Site visitors can rate and comment on submissions. After a month, a winner will be declared and Ryz will order a run of the winning design -- 100 pairs to start and 1,000 pairs by next year -- from a contract manufacturer in China.
  
  
• The winning designer will get $1000 for the start, plus royalties of $1/piece on ongoing sales, and get their profiles attached to each pair and a listing in Ryzwear.com's Hall of Fame.
  
  
• Two weeks after the contest ends, Ryz will sell the winning shoes on the Web and, for now, in Xebio Co., a leading Japanese sporting-goods retailer that owns a stake in Ryz. The retail price: $75 to $90 a pair.

By 2012, Langstaff hopes to allow users to design the entire shoe, from the shape of the sole to the shape of the eyestay. He also hopes to get into athletic wear. He expects to rely on customers to do most of his marketing.

Rob Langstaff is putting $4 million into his shoe startup, saying there is too great a disconnect between businesses and consumers. He expects to do $40 million in revenue by 2012 (which would be about half the time of Threadless' way to scale, but could work given his larger experience in the market and the higher price tags).

Interestingly, among some of the people helping Langstaff to set to the business is Mikal Peveto, a former footwear executive who started design-your-own shoe site Customatix in 2000. In case you have followed mass customization since its beginning, you should know Customatix. The company got much attention and had one of the best online configurators of its time. But it also did offer too much of a good thing, giving users really zillions of choices at a time when consumers were not really educated in mass customization configurators.

But Peveto believes Ryzwear can succeed where Customatix failed because consumers today are more comfortable interacting and purchasing online from less-established companies.  "Our timing wasn't great. We couldn't get people to buy because they didn't trust the brand," Peveto said. "Now is a completely different time than in 2000 because there are so many different brands that are valid."

So I am curious to see whether Mikal Peveto and Rob Langstaff's predictions come true. They took some serious modifications of adopting the Threadless models for their industry. But Threadless' customers are as much purchasing the membership in a club, a community, by purchasing t-shirts frequently at $15 a pop. I am not quite sure that this will work with $90 sneakers.

To develop however a great (and profitable) underground line of sneakers with a great story, their approach may work will. They may want to learn from Muji, the Japanese's retailer, and its approach to the model. Muji is not just letting customers vote on new designs, but also asks them to make a small cash payment on the item they really want to have in stores. Thus, they can much better predict what
people will purchase later. Such an approach also could benefit RYZ as it would connect the voting process closer with purchasing..

Context information:

A good article in Oregonlive told me first about RYZ

A recent article in the San Francisco Chronicle on crowdsourcing and user idea competitions is featuring RYZ, Threadless, and a number of other companies.

My previous reports about the CEC User Co-Design Competitionand Open Source Footwear.

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

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

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

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

On Threadless' Size and Development

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

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

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

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

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

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

On Threadless' Corporate Culture and Work Style

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

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

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

On other product categories Threadless is exploring

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

INTELLIFIT Moves From Virtual Fitting (match-to-order) to True Mass Customization: Custom-made jeans with a high-tech twist

Intellifit is know to me as one of the leading providers of match-to-order systems in fashion retail. They currently market a special 3D full body scanner. At a retail location, the consumer enters a see-through "Intellifit Virtual Fitting Room" (the scnanner) that's 8' high and 7' wide. There, low power radio waves collect about 200 accurate body measurements in under 15 seconds – a personal “FitPrint” – while the consumer remains fully clothed. This data is used to match the user's measurements with sizing information of (standard) garments in the store.

According to the company, Intellifit has measured over 230,000 individuals to date, representing the largest sizing database of its kind in the world.

But now Intellifit customers will become enabled to use their profiles to shop for custom made jeans, and in the future, for custom pants, khakis, or shirts. Last week, the company began a test of its “Custom Jeans Center” at its company retail store outside of Philadelphia. Consumers can design their own custom-made jeans with a guarantee of a perfect fit. In the moment, retail shopping is by appointment only and includes consultation with a fashion advisor.

The customer can choose jeans from a selection of styles and washes and add details such as pocket shape and design, stitching and personalization options. The price point of the custom jeans is at about $150.

The FitPrint is transferred electronically from the retail location to the jeans manufacturer, where the garment pieces are custom-cut by computer control. The completed custom jeans are shipped directly to the customer in 3 to 4 weeks.

“This test will help us determine the scalability of the process. With a positive result, an international roll-out will be close behind,” Rob Weber, Intellifit's President, is quoted in a recent press release.

I believe that this combination of mass customization and match-to-order is a very promising way of establishing a sustainable operation. Many consumers do not want to wait for a perfect fit that is just made for them, but also are frustrated by complexity of choice and not finding their right size in a large retail store. Also, if the system finds that a standard item on stock is providing you a good fit, the retailer will have an advantage as the inventory can be reduced. On the other hand, if a consumer does not find a standard garment according to her fit and preferences, she does not have to leave the store without a puchase -- but can be transferred to the mass customization option.

For Intellifit, entering the mass customization market also is a great way to leverage the exiting investments in building such a large database of "FitPrint" customer profiles.

Context:
- For more information and store locations, go to www.intellifit.com.
- MVM's virtual model and Archetype's ZAFU are similar matching-services in the online world.
- Report about METRO's matching and in-store recommendation service

User Manufacturing Trendwatching Report

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

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

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

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

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

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

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

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

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

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

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

Context:
- The orginal Trendwatching report

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

- My earlier report about Ponoko (more here).

- My earlier report about the low cost 3D printers

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

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

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

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

CNN on User Manufacturing and Fabbing Your Products at Home

Dean Irvine from CNN Online reports in a recent article on a new project, Fab@Home, that wants to provide a machine that can make anything, even itself -- and this in the comfort of your home. What sounds like the dream of a science fiction author is a device developed at Cornell University by Hod Lipson, Assistant Professor at Cornell's Computing and Information Science department, and Evan Malone, a PhD student.

Lipson and Malone's machine is different to conventional rapid manufacturing technologies in several reasons: First, it can use a number of materials, from plastics to metals with a low melting point. "This makes them useful for making parts or components, but not for making complete systems. We're aiming to make integrated systems, including circuitry and sensors," Lipson is quoted in the article.

Second, the machine is not a proprietary technology, but open source machinery.

DIY fabbers have been able to download plans on how to make their own Fab@Home devices from the web site and are able to build it using off-the-shelf components for around $2000, or buy a kit for $3,000. The machines can then be run from software on a desktop computer. Unsurprisingly the current model is more rudimentary than professional rapid prototyping machines.

Lipson: "Since the machine has been out there people have been experimenting with all sorts of materials including food. We've seen a lot of chocolate, cheese and peanut butter-based creations. This might not be the way the machine is used in the future, but it just goes to show how adaptable and open the creative impetus it is."

Lipson thinks that digital fabrication is currently in a similar situation to that of computers in the 1960s, but instead of kits in the hands of enthusiasts and boffins, the fabbing machines can be developed by creatives across the world thanks to the Internet, freeware and open source software.

"It's a project that will be perfected and improved thanks to the online community of designers and creatives. Getting it into the hands of the people is very important. All the software and components are open source so can be changed or modified according to what people want," he said.

While the machine still is in its early stages of development, the article comments on the potential impact of such a machine. This discussion fits into the vision of user manufacturing. In some quotes in the article, I am saying (please excuse this shameless act of self-promotion):

Piller: "It's hard to say if [Fab@home] will be in everyone's home in the next 20 years. It might follow the same trajectory as the laser printer. Who predicted that nearly every home would have one of them 20 years ago? What is certain is that in the long run it's sure to transform the manufacturing process, big companies won't have to focus so much on economies of scale. ... [For consumers], you won't have to wait for products. It will be similar to being your own publisher online, but with an enormous scope of what you can produce."

And how about replicating some Prada shoes or Aquascutum cuff links, Irvin asks in his article. Well, just look on Google Sketch-up and its repository of 3D designs. you will find an amazing number of reverse engineered IKEA furniture here.

"Already people are customizing designs of existing products, like Ikea furniture, using designs tools and these types of machines. It's small scale now, but if this becomes big, then Ikea are going to step in and say:'Hey, you can't customize our designs.' [But] if they're smart then they'll put these machines in their stores," said Piller.

And the basic idea of the IKEA business model of self assembly would become one of self-design (modification) and self production.

Read the full article here: http://edition.cnn.com/2007/TECH/science/04/26/fs.fabmachine/

Context: - The CNN article refers to a fabbed ladies shoe that is wrongly credited to my group. I wrote about the first laser sintered shoe in this blog, but its inventors and designers are Marc van der Zande from TNO Science and Industry and Sjors Bergmans from Concept Design who developed the shoe in a joint EU-funded project called CEC-made shoes.
- Another nice article about the project.

Nike is Trying Threadless' Crowdsourcing Model

More Co-Creation at Nike

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

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

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

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

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

Pill Boxes 2.0: Vuru personalizes nutrition packaging

Sometimes it's all about the (re)packaging. As Springwise, a new Miami-based company called VURU sells nutritional supplements in personalized daily packs. Vuru is the brainchild of Grant Kornman, who says that his (heavy pill using) father inspired him to open this service, as Grant was fed up with selecting pills from many bottles to assemble the daily intake.

At Vuru, customers choose from over 2,000 name brand supplements and vitamins, select how many weeks worth they want to purchase and then have their personalized packs shipped to them. Each pack contains the daily dose into a slick little pack that fits 2-15 pills.

The idea: To spare customers the hassle of collecting pills from several bulky bottles into daily dosages. Vuru packs can be tossed into a handbag or pocket, and are perfect for travel. Each order comes with an information sheet, which has a picture of each pill, the supplement facts label, directions, warnings and any other information pertinent to that supplement or vitamin.

This is how the process works:

1 Name your pack: customers are asked to enter a name they would like to appear on their pack. This is an old personalization trick, that always works: Give something your own name, and you build commitment and involvement with this (standard) thing.

2 Fill your pack: From a long, long list, users now have to select their individual pills. In case you know exactly what you want, this is easy. In case you don't the site lacks a really important feature here: recommendation and advise. How should I know which nutrition supplement is best for me, what is the difference between the 15 kinds of vitamin C they offer, etc.

However: Besides creating their own unique blends, customers can pick one of Vuru's pre-selected mixes, varying from 'Woman's Yoga Pack' to 'The UrbanDaddy Pack'.

3 Choose the nubmer of packs to pick how many weeks supply you want and if you would like auto refills.

4 Checkout. Leave your credit card and money. Prices totally depend on the pills you choose.

Springwise comments on this idea:

"Several elements make this concept quite appealing. First of all, customers will love the ability to pick and mix their own, ultra-personalized blend from a wide variety of supplements. Secondly, there's the convenience angle: time-saving and life-hacking, Vuru is what our sister-site trendwatching.com would call a daily lubricant. One of those products that make people's lives just a little bit easier. Last but not least, the packaging is simple, shiny and chic. Which all combines to create a luxury 'health hack' that many consumers are willing to pay a premium for. The same concept could no doubt be applied to other industries. How about skin care products? Just be sure to think green and keep packaging to a minimum."

My comment: Nice idea and a good example how you can offer customization with standard products. This is just a nice packaging service, but one that may create customer value for heavy users of these products.

But: Sovital and other companies already go one important step further: They really customize the pill! and just produce a customized batch of nutritions just for you So that there is no need to take several pills (even if they come out of one nice bag) but just one that contains all the stuff your body needs.

The Consumer Decides: Nike Focuses Competitive Strategy on Customization and Creating Personal Consumer Experiences -- Data about the Nike Plus Personalization System

During its recent Investor Days, the Nike top management board announced a strong shift of its strategy from being a sportswear brand to becoming the enabler of customized, personal experiences. “Investor Days” are an extensive briefing for analysts; taking place only about every two years (the last was in June 2005). During its recent briefing at the company’s headquarters in Portland on Feb 6, 2007, the company placed a strong focus on its new global theme “The Consumer Decides” and revealed some interesting facts about its customization ambitions and ways to sustainable consumer experience.

During the meeting, also a number of interesting performance data of the Nike Plus system were provided, the Apple-Nike cooperation that allows runners to customize their running experience in a simple but very clever way. It is a strong contrast to the exploding variety Nike is facing today, offering more than 13,000 product different styles in every single quarter.

First, Nike CEO Mark Parker explained the theme “The Consumer Decides”:

“The Consumer Decides is one of Nike's 11 maxims that really define who we are and how we compete as a company. Today, consumers have never held as much power as they do today. They have more choices and more access to those choices. They connect and collaborate with each other over the world. … Clearly, the power has shifted to consumers. For every Nike employee, there's ten million consumers out there deciding whether or not the products and brands we offer really matter. … The ability we have to connect with consumers is the single most important competitive advantage in business today, and nobody does that better than Nike. There is no substitute for connecting with consumers, but it's really just the beginning.”

Nike’s Brand President, Charlie Denson, focused in his speech on the changing consumer and the particular demand for customization:

“[Consumers] want to be part of a community, whether it's a digital community or a virtual community, or whether it's a physical community. They want to feel like they're a part of something. They want to be engaged. …

And another thing that is very, very important to us as we look to the future is the value that the consumer is placing on customization. It's a very, very important part of the way that they interact with anybody or with brands today. We used to talk about the consumer in what we thought was specific, but in today in retrospect, feels like generalities, the fact that we used to put a 18 and a 22-year old in a same set of psychographic, demographic targets. Today, I can very comfortably say that the 18 and the 22-year olds are working on different -- they're living on different planets or at different places. As Mark said, these consumers have more choices than they've ever had.

What our challenge is to keep it simple, make those choices as simple as we can, and make them personal. We've spent the last, or in our case, 20 or 30 years trying to bundle things, adding value to a purchase or a relationship. And now, it's almost in reverse, because you have to unbundle everything if it's going to become customizable.”

During the event, the Nike Plus system was described as a perfect example of this strategy. Trevor Edwards, VP Global Brand & Category Management, describes the system and gives some numbers on its acceptance:

Nike Plus "combines the physical world with the digital world. We put a sensor in the shoe that speaks to the iPod, and you can hear how far you went, how long you went and how many calories you've burned, pretty simple thoughts. And then, when you dock it, you have a world of information at your fingertips. You get to see all that you've done, all your runs stored in a very simple, intuitive web experience where you can set goals for yourself. You can see how you've progressed. In fact, this week, I think we've put up -- you can actually map your run anywhere you go. In addition, you can join in the Nike Plus community where you can challenge your friends or other community members to run physically, but compete virtually. And since our launch, we have close to 200,000 members.

What do the numbers tell us today? First important fact, 35% of the members that we surveyed are actually new to using Nike footwear. So, we've brought more consumers into our franchise. The second part is, more than half of them are actually using the survey to service four times a week. And this is probably the most important statistic, 93% said they would recommend it to a friend, 93%. This is an incredibly sticky proposition, a great way to build loyalty for our brand and obviously build the business.”

Charlie Denson describes the growth plans Nike has with the system:

“That is a dedicated consumer experience. It is changing the game, and it's creating that competitive advantage for us. We would like to see 15% of all runners using Nike Plus, 15%. Now, that's not a very big number, except for there's 100 million people who call themselves runners worldwide. ….”

So in summary, this sounds like a big success and stresses that this really has been a clever idea to provide customization in this industry in a rather simple way, but in one that matters for consumers. And with the target of 15 million users, this would be one of the largest mass customization programs ever.

In another section of the event, Don Blair, Nike’s CFO, provided some interesting figures on the scope of variety that Nike is facing today. I often mention in my presentations the explosion of SKUs and variants that global brands today think to have to offer to create appealing products in heterogeneous markets. Nike seems to have recognized that just increasing the number of variants is not the ultimate way to appeal to consumers:

“SKU productivity. One of the great strengths of our company is our ability to create compelling innovative products that excite consumers. But there can be too much of a good thing. Each quarter we sell about 13,000 different styles of footwear and apparel and because of our high rate of seasonal turnover, we sell tens of thousands of different styles every year. And there are many additional styles that make it part way through the process, but don't end up in the final line that goes to market.

Each one of these tens of thousands of styles drives costs; costs for design, development, sampling, transportation, storage and sales. For footwear 95% of our revenue comes from about 35% of our styles and for apparel the figure is about 40%. …”

Costs of samples to provide this variety were given with more than $100 million. Given these numbers, an adaptable product like Nike Plus or a truly mass customized product, produced on-demand, sounds very appealing and much more efficient.

For the full transcript of the investors meeting, go to nike.com.

Automotive Customization 2.0: The MIT City Car project

The MIT City Car project was one of the initiators to host the upcoming MCPC 2007 World Conference on Mass Customization & Personalization at MIT. Coordinated by the MIT Media Lab, this project looks into the future of the car. And this future is much more than faster engines, a futuristic shell or more entertainment features in the car, but it is all about delivering a highly personalized mobility solution.

The main idea: The future of the car is a shopping cart. Well, a very special shopping cart. Sponsored by General Motors Corp., a team lead by MCPC 2007 conference chair William Mitchell and MCPC 2007 coordinator Ryan Chin, is building a prototype of a lightweight electric vehicle that can be cheaply mass-produced, rented by commuters under a shared-use business model, and folded and stacked like grocery carts at subway stations or other central sites.

The Boston Globe recently published a nice update about this project, and also has a great interactive graphic on its site that explains the concept. “Dreamers have been reinventing the wheel since the days of cave dwellers. But the work underway in "the Cube," the Media Lab's basement studio, may be the most ambitious remake yet.”, Globe writer Robert Weisman reports in this article.

The main idea to totally redesign the car was to move everything what today drives and controls the car into the wheels. Embedded in each of its four wheels will be an electric motor, steering and braking mechanisms, suspension, and digital controls, all integrated into sealed units that can be snapped on and off. With this design, the rest of the car can be designed totally new from the sketch. By removing as much hardware from the car as possible, a totally new design is possible.

The main visible feature is the car’s stackability. The idea is that you do not own a car, but just take one within a city when you need it – a modern interpretation of the (perfect) Boston based car sharing service ZIP car or Germany’s “Call-a-bike” system. As space is often a constrain in the city, cars will be foldable away to occupy as little space as possible when not in use. It is much easier to see than to explain how this will work, so have a look at this interactive graphic.

But the MIT team still recognized that cars often are an object of personal impression and more than just a seat in a public transportation system. This is where personalization comes into this system. . "We think of the car as a big mobile computer with wheels on it," Ryan is quoted in the Globe article. "This car should have a lot of computational power. It should know where the potholes are." And it also knows how you like your car. Once you have rented a car, the software that sets passenger preferences, changes the color of the cabin, controls the dashboard look and feel, and even directs drivers to their popular parking spaces next to their destination.

As the MIT researchers envision it, the City Car won't replace private cars or mass transit systems but ease congestion by enabling shared transportation in cities. Commuters could use them for one-way rentals, swiping their credit cards to grab a City Car from the front of a stack at a central point such as a school, day-care center, or office building. "What you'll be buying is mobility," Chin said.

"The existing infrastructures can't support the population growth that we're seeing, so we're going to have to find viable alternative vehicles like the one MIT is designing," Rebecca Lindland, director of automotive research at Global Insight in Lexington, is quoted in the Boston Globe article.

The MIT City Car concept transfers a piece of hardware into a product-service-system that delivers a truly customized service as a bundle of products and service components, some mass produced, some adaptable, some customized for each user. The first real working prototype of this car is scheduled for presentation on the MCPC 2007 conference. "I think we'll be driving it around the interior of our building," Chin said, "and hopefully ask the MIT police to let us drive it around a parking lot."

In a dedicated track on this conference, we invite researchers and managers to discuss this concept and present their own visions of the custom car of the future. (http://www.mcpc2007.com). In general, the idea of product-service-systems is a promising option for many customization offerings in several industries:

- Why not add a custom training plan to your custom sports shoe? (a great example for this is the Nike Plus Personalization program)
- Customization of cell phones may not only include a custom cover or your personal ring tone, but a service that configures your phone to your profiles, adds your phone books – and comes with your personal service plan that adjusts the pricing structure to your personal need.

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

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

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

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

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

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

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

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

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

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

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

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

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

Some examples:

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

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

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

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

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

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

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

And now Amazon:

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

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

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

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

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

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

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

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

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

Context information:

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

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

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

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

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

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

UPDATES:

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

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

Today Is MC Day in the Blog Sphere: History, Future, and a Missed Trend

Today was mass customization day in the blog sphere: Two great and one interesting post on mass customization and creative customers stroke out the mass of general postings just mentioning the term. And an update on Zafu in the NYT.

Tim O'Reilly on Threadless and custom fabrication. Tim O'Reilly, master guru of Web 2.0, today posted about Threadless and why he loves this business model. Why I do not share his evaluation that Threadless is a perfect example of the Long Tail (see my comment on his post), Tim makes a good observation where this will lead us in the future:

Right now, Threadless is just making t-shirts. But custom fabrication devices like laser-cutters, water-jets, and 3D printers are currently at about the price points of typesetting machines back when desktop publishing took off in the early 80's. Even traditional manufacturing techniques can now be harnessed by small companies and individuals, who can hire overseas factories to make short runs of custom designs. How far off is a future in which the creative economy overflows the thin boundary that separates "information" from "stuff"?

We've been fascinated with this idea since Marshall Burns and James Howison gave a talk entitled Napster Fabbing at our first P2P Conference in 2001. They pointed out, quite rightly, that in a world of personal fabrication machines, stuff could be shared as easily as music is shared today.

But what would the mechanisms be by which new designs first come into play? Will they merely be copied from traditional manufacturing and brands, or will there be a new economy in which users compete in creative abandon?

I am preparing a longer review posting on user manufacturing and the new infrastructure that is just coming up to help consumers to turn their creative ideas into physical outputs (and sell those to others) – an alternative model to the today dominating mass customization model. Stay tuned for this next week or so.

But Tim's post is a summary of the idea and what will come up. Or, as he says with William Gibson's words at the beginning of his post, "The future is here. It's just not evenly distributed yet."

Tom Evslin on the history of mass customization. Tom Evslin, a technology veteran and pioneer of many core technologies of the information age, posted in his blog today – in a comment of Tim's post – a great story on the history of mass customization.

Until today, I always paid tribute to Alvin Toffler for mentioning the concept first, who quoted (in 1970) Robert H. Anderson, at this time Head Information Systems, RAND Corporation, that "The most creative thing a person will do 20 years from now is to be a very creative consumer… Namely, you’ll be sitting there doing things like designing a suit of clothes for yourself or making modifications to a standard design, so the computers can cut one for you by laser and sew it together for you by NC machine ..."

But Tom has the following story to share:

In 1963, IBM paid me overtime for attending courses and lectures at its System Research Institute subsidiary – plus an all-expenses-paid drive into NYC. One Tuesday night the lecture was on the kind of future that computers would make possible. Those who thought about that at all thought of a Big Brother sort of world and enforced uniformity since computers liked dealing with millions of items which were all formatted just the same.

But the speaker at SRI said that computers would make mass customization possible.

“Imagine,” he said, “going to a store and seeing a dress you like (nb. no online shopping in the dark ages). The clerk takes your exact measurements but then asks if you would like any changes to the design. You say ‘I’d like the fleur de lis a little smaller, the straps a little wider, and the hem an inch higher.’ After just a short wait a machine disgorges just what you want. Computers will make it possible to undo the uniformity and conformity that began with the industrial revolution and mass production.”

Wow! Not that I bought any dresses with or without fleur de lis in those days but I was really turned on by this. Didn’t really have anyone to discuss it with because my co-workers at IBM were much older than me and not as given to bursts of enthusiasm and no one else knew what a computer was.

So why are we not all customize our dresses (or dress shirts) today? Here the third provides an answer.

Robyn Waters on Mass Customization. Business Week today posted an interview with Robyn Waters, a "Trend guru" on "spotting what is next" and former vice-president of Trend, Design, and Product Development at Target.

While I really love her work for Target and how she turned this company in place for great shopping experience and discoveries (Target's high-profile, high-revenue "design-for-all" marketing strategy, developed by Waters, is a industry benchmark), she really missed the point when asked about the which companies she recommends watching that are great in mass customization? Her answer:

"Mass customization refers to products for a mass market that are designed so customers can personalize them to their exact needs or desires.

Companies doing a wonderful job of mass customization are: The U.S. Postal Service and the www.mystamps.com site. You can design your own postage stamps...upload a photo, chose a color, a border, a denomination, pay by credit card. Jones Soda uses digital technology to customize labels. The customer uploads a photo, writes a label, selects the flavor of soda, and a case of custom-labeled soda is shipped to their door. Starbucks allows you to customize your cup. There are purported to be over 19,000 ways to order your coffee drink at Starbucks.

M&Ms allows you to select special fashion colors, and 95% of Mini Coopers are customized. Cold Stone Creamery customizes your cone with mix-ins. My Twinn is a doll that is customized to look exactly like your child. TiVo turns you into your own TV programmer. iPod gives you all the controls for your music when you want it.

I prefer the term "customer-made" to "custom-made." These examples turn a customer into a designer."

I totally share her last comment. But are the companies she quotes really good examples for mass customization worthwhile watching. I doubt this. Most of them are examples of online mass customization of the first generation. Are you really a designer of you order a latte with skimmed milk and extra cinnamon at Starbucks? Are you a designer if someone create a doll that looks exactly like you? Is a custom soda label the future of customization? Well, then I should stop writing this blog.

Tom's 1963 quote of mass customization of much more insightful and futuristic -- almost 45 years ago! I just mention this as it are exactly this kind of examples that make it difficult to bring mass customization forward and shift it out of the niche of custom embroidery etc. If forward looking thinkers like Robyn Waters use these kind of old examples and narrow ideas, then it will be difficult to motivate other managers to really see a sustainable business model behind the concept.

Update: One post that I just found today: The New York Times has a good review of Zafu.com, the mass customization alternative I wrote about some while ago. 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. The article also comments on the increasing use of other personalization services, like gift-finders or recommendation engines. Nothing new, but finally getting implemented.

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Personalization and Music: Beyond shuffling on your Ipod -- an overview of new services to customize your music experience

What we can learn from the BBC, Pandora, and Musiclens for mass customization

The traditional compilation CD is deader then ever. Instead of listening to all songs of an entire CD, most consumers today prefer just to listen to what they want on their MP3 players (a typical long tail phenomenon). But selecting, filling and arranging the playlists of these players have stayed more or less a craft business. While some persons feel joy and achievement once they have generated their very own, individual playlist, this is, none the less, plenty of work. Also, listeners are restricted to the music they known (and, more or less, own).

Sure, with satellite radio, there are now highly focused radio stations which substitute general radio broadcasts. But often, even these stations are still a bit too broad and contain songs that you don't really like too much – and too few of your real favorites.

Here, three new services provide help. Using different approaches, they allow users to customize their music experience beyond the restrictions of ownership, information about favorite songs, and the demand to manually craft a custom playlist. These services provide tools to find new music matching an individual's preferences, but also enable custom broadcasting services of a new level.

Note: I am not talking here about the option of customizing the particular song. While there are some new promising offers (e.g., at http://www.dabreakupsong.com you can create a custom rap song to break up with your partner :-), this is a minor field of application (see my posting on this subject). Most people don't want to customize their music on the level of the single song, but they want to personalize the stream of songs they listen.

BBC to Develop Personalized Radio Service

Madeforone recently reported about a new personalized radio service that the BBC is developing. The UK state broadcaster wants to allow audiences to create personal radio stations from its content, its director general has said. The service, provisionally called MyBBCRadio, aims to give audiences more control by combining existing services such as podcasts and the BBC Radio Player. It will be part of the BBC’s iPlayer, a new interface device that shall transport custom content (music, video, reportings) to each user.

With its earlier Backstage offering, the BBC has been a forerunner of user-generated content. It changed its policy from protecting its content to giving most of it away to listeners for free, allowing users to create new works by mixing their own stuff with BBC programming (more information here). NNC Backstage, however, was more an offering for leading-edge users or music lovers. But the new MyBBC Radio Service wants to bring this capability to the mainstream.

Radio 2.0: Pandora and the Music Genome Project

But personalized radio stations do already exist. Once of the best services is Pandora, a music discovery service designed to help users find and enjoy music that they like. Based on a huge database that has categorized songs of over 10,000 different artists based on unique attributes, it helps users to find music that has the same characteristics of a song or artist they like. Just type in a name of a favorite song or artist, and let the magic begin. I was highly fascinated by the quality and scope of the resulting personalized music stream (you need an US ZIP code to use this service, if you live abroad, just use 02138, my postal code).

Pandora has a totally different approach to configuration compared to the majority of other configuration toolkits. It is a good example of a need-based system, i.e. an expert system that does not demand that users can describe exactly what they want, but that just analyses what they like and provides suggestions based on this analysis.

The service is powered by the Music Genome Project. In this project, founded by Tim Westergren in January 2000, a group of musicians and music-loving technologists came together with the idea of creating a comprehensive analysis of music. They assembled hundreds of musical attributes or "genes" into a very large "music genome". Taken together these genes capture the unique and musical identity of a song -- everything from melody, harmony and rhythm, to instrumentation, orchestration, arrangement, lyrics, singing, and vocal harmony.

This kind of expert analysis of all songs provides the main difference of Pandora to other music recommendation systems based on collaborative filtering (as, e.g., at Amazon.com). Collaborative filtering works without any idea of the nature of the articles it is recommending, as it is solely based on comparing the usage (shopping) behavior of one user with the behavior of other users. Pandora, on the other hand, is not based on such a analysis, but solely on the nature of the products (songs) it recommends.

Pandora is offered for free in an advertising supported version (and of course the company hopes to get a provision when you buy a song you discovered though its service). There is also a subscription based service without advertising. All music is streamed, this means it is not possible to download or safe the stream (legally). With a special device, you can also listen to your very personal music channel without your computer.

More information and analysis: http://blog.pandora.com/press/

MusicLens: Configure Your Music

Now compare Pandora to MusicLens.de, a German project that aims to test four different technologies to analyze music like it has been done in the Music Genome Project. However, this service opens the Pandora box and allows you to really configure the music you like. Using more than 10 sliders, you can describe exactly the music you want to hear, like its tempo or subjective volume. You can also define the purpose of the music on a scale from listening over driving and sex to dance. And set the mood of the song (on a scale from smile to angry).

As a result, you get a play list with songs matching your desires. Sounds too complicated? You also can just provide a favorite song for the start, see its characteristics, modify them just a bit, and get new music. As this is a test project, however, the music available does not match the scale and scope of Pandora's repertoire. But the web site provides already a good indication of the service.

MusicLens uses a fuzzy search technology to find music - CDs, albums, song titles or artists - by characteristics. Searches can be carried out in large masses of data quickly and effectively. And, despite the terms of the enquiry being vague or indefinite, the results are clear. The idea is to provide users also good results when they do not know what they are looking for – a feature conventional search engines do not have. Users also do not need to use specific search vocabulary or any form of literal definitions. The search is conducted by way of various characteristics or categories, represented by the slider navigation system.

DDD-Systems, a Hamburg based IT services company that is behind MusicLens, hopes to position the system also as a business-to-business service. The search technology shall assist those involved in purchasing film, radio or television content to find the right content.

Beyond segments and clusters

Why do I write about all this? In my opinion, MyBBCRadio, Pandora, and MusicLens provide some great general insights for mass customization:

-- These services overcome the traditional categorizations (market segmentations) of music in genres. There are no clusters of "Independent", "Pop", or "Rock" music. All categorization is based on an individual user's preferences and desires.

-- Pandora and MusicLens apply modern search technologies which support a need-based configuration approach. Instead of today's dominating parameter-based configuration approach (users configure products based on concrete selections of components and modules), they help to define products based on a description of the user's needs and preferences.

-- They address the customization of services. Up to today (and also in this blog), mass customization is often solely discussed in relation to the individualization of physical products. MyBBCRadio, Pandora, and MusicLens are great examples of mass customization of service offerings.

But for now: Enough words, now go ahead and listen to your personal music.

Open Source Footwear -- bringing customer co-design to a traditional industry

How the EU-funded CEC project wants to foster customer co-design in the footwear industry -- and why star designer John Fluevog is already doing it.

When people talk about open innovation, in most case it is related to high tech or science products as in the case of Innocentive, or software as with open source software. Then you have hip youth products like T-shirts, as in the case of Threadless' user innovation model [Threadless seems to be omni-present in the press and blog world today (I introduced Threadless in in this blog in August 2005; see for some updates on Threadless Business 2.0, Exciting Commerce, Crowdsouring, Innovation Lab DK, and of course at Threadless themselves).

But can the open source / user innovation idea also work with rather conventional products like, say, shoes? No high-tech sports shoes (see here for a recent paper on user innovation at Adidas, working paper version here), but good ol' dress shoes?

This is one of the issues Angelika Bullinger wants to find out as part of the "CEC-made shoes" project, a large integrated project funded by the European Community (PDF with project info) to modernize the European footwear sector. Angelika, who is a colleague at our TUM Research Group on Customer-Driven Value Creation (my permanent academic home besides my present residency at MIT), explores with researchers from Fraunhofer IAO and other institutions how footwear companies can become more competitive by fostering user innovation in this industry.

One way to do so is to install internet platforms (innovation toolkits) where users can evaluate new designs, give feedback or even create totally new designs. Given that shoes are one of the most common products we use, and also a very emotional one, I believe that there is a lot of potential to do so (mass customization, another concept that is also evaluated in the CEC project, is already getting more common in the footwear industry industry).

And some innovative shoe companies are already doing it: William C. Taylor reports in the New York Times today how Canadian shoe designer John Fluevog, one of the stars of his profession (loyal customers call themselves ''Fluevogers"), has been soliciting ideas from its customers -- encouraging brand enthusiasts to submit their own sketches for leather boots, high-heeled dress shoes, even sneakers with flair. He posts the submissions on his company's Web site, invites visitors to vote for their favorites and manufactures and sells the most promising designs.

''Customers want to express themselves, to be involved with the brand,'' Mr. Fluevog is quoted in the article. ''For so long, people would hand me a drawing of their personal design for a shoe or ask if I had considered an idea they liked. This program is a natural outgrowth of that desire for connection.''

As the NYT reports, until today the company has chosen nearly 300 finalists from the flow of sketches into its headquarters -- and introduced ten shoes based on customer designs, including the Urban Angel Traffic, a walking shoe (retail price, $179) designed by a customer in Moscow, and the Fellowship Hi Merrilee, a vintage-style pump ($189) designed by a customer in Provo, Utah.

Introducing customers in footwear design may have its limits: ''Some of the ideas from customers are striking, but impossible to make,'' Mr. Fluevog sayz in the article. What tends to work best, he explained, are intriguing twists on design themes that he and his colleagues are already exploring. ''But even submissions we can't make add to the stimulation,'' he added. ''Our customers get more involved, and we get insights into who they are and what they're doing. It's better for both of us.''

This is exactly where we want to extend the user innovation process with the research we do for the CEC project. Instead of asking consumers for sketches with a very wide solution space, sometimes representing impossible designs, the idea of an internet based toolkit for user innovation is that customers are guided and are designing within the capabilities of a specific company.

Eric von Hippel, head of the innovation and entrepreneurship group at the MIT Sloan School of Management, has described this method for more high tech goods like semiconductors, food flavors, or plastics, before:

"In a time of ever more talented technology enthusiasts, hobbyists and do-it-yourselfers, all connected by Internet-enabled communication," he is quoted in the same NYT article, "the most intensely engaged users of a product often find new ways to enhance it long before its manufacturer does. Thus, companies that aspire to stand out in fast-moving markets would be wise to invite their smartest users into the product design process."

''It's getting cheaper and cheaper for users to innovate on their own,'' Professor von Hippel said. ''This is not traditional market research -- asking customers what they want. This is identifying what your most advanced users are already doing and understanding what their innovations mean for the future of your business.''

The fact that a successful designer like John Fluevog is thinking this way now as well is very promising – as it are often the internal designers or engineers of a manufacturer who oppose the idea that users and customers can be a source for innovation as well.

It will take for the very conservative European footwear industry some more years to think in such a way – judged by my experience from working with this industry (see my earlier comments on the slow adoption of mass customization there). Hopefully their customers, support by some clever Asian manufacturers, have not pushed them out of business until them. But we hope to contribute a bit with the CEC project that this will not happen.

I will keep you posted on the outcomes and progress in this research project. If you are from the footwear industry and want to explore user innovation (or are already doing so), let us know! We are permanently looking for further exploration partners from this industry.

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.

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.

Mass Customization of Books: Amazon finally jumps on the unbundling trend

Amazon.com announced last week that it will finally offer readers the possibility to customize books from various publishers. Building on its "Search Inside the Book" technology, which allows customers to search the complete interior text of hundreds of thousands of books, the company is currently developing two new programs that will enable customers to purchase online access to any page, section, or chapter of a book, as well as the book in its entirety.

Amazon thus is finally offering on a retail level what innovative publishers like MetaText, Cinado.com, Symposion or Addison Wesley have done since years: Providing readers the opportunity to purchase just the pages they really need. What might be not a good idea for novels, is great for edited books or also many trade books, where often the first and last chapter are giving you 80% of the information you want to know.

Indeed, also my most recent book on mass customization and open innovation has been published in this manner (in German language: "Mass Customization und Kundenintegration: Neue Wege zum innovativen Produkt", co-authored by Frank Piller and Christof Stotko, 2003). This was the first customizable book on mass customization. The book's first part discusses the implementation of a mass customization strategy and extends the concept towards open innovation. Readers can order all chapters of this book separately (here, of course, the 80% rule mentioned before does not apply).

The second part of our book consists of more than 25 case studies and plenty of additional expert chapters on specific parts of the book. These chapters can be identified with an easy, but useful configurator, helping readers to decide which chapter is fitting best to their needs (more information on the book: http://www.mass-customization.de/ibook.htm, the configurator can be found here: http://www.symposion.de/msc/inhalt.htm).

So, while Amazon's announcement is nothing new, it will affect the market for customization in the book sector enormously as it will offer readers a one-stop-shopping and combine customization with Amazon's market power.

In one of the planned offerings, called "Amazon Pages", the physical-world experience of buying and reading a book will be "un-bundle" so that customers can simply and inexpensively purchase and read online just the pages they need. For example, an entrepreneur interested in marketing his or her business could purchase the relevant chapters from several best-selling business books.

A second program, "Amazon Upgrade," will allow customers to "upgrade" their purchase of a physical book on Amazon.com to include complete online access. For example, a software developer who buys a Java programming book will not only get the physical book delivered to his or her home, but will also get Web access to the complete text of the book. Buy a cookbook and you will not only have it on your shelf, but also be able to access it anywhere via the Web. However, many publishers still have to sign so that Amazon can offer these services. In the moment, only very few books are available in this mass customization program.

For customers, this is great news. It will make access to books faster and more accessable. And will finally also provide to customers the convenience that purchasing one chapter is cheaper and more convenient than copying this chapter from the library page by page.