Fruitful

Grassroots Innovation

Microsoft is the latest company to capitalize on the “customer-made” trend. According to the Mercury News, any game enthusiast can now create video games for the Xbox 360 video console. 

 “(Microsoft) will make available a stripped-down version of its game development tools for $99. The XNA Game Studio Express software will have everything someone needs to make a working video game…. The strategy is part of a plan to make the Xbox 360 more attractive by putting consumers in control of the content, much the way that consumers are taking to grass-roots entertainment on YouTube or on their iPods…”

There’s a lot being written about this trend that Trendwatching.com calls “Customer-Made," but larger companies have been slow to embrace the idea. According to Trendwatching, “tapping into the collective experiences, skills and ingenuity of hundreds of millions of consumers around the world is a complete departure from the inward looking, producer- versus-consumer innovation model so common to corporations around the world.”

Why is this trend a big deal? In a nutshell, product development becomes a profit center.  Customers pay Microsoft for the ability to create games for Microsoft’s Xbox platform. And by getting the tools into universities with game development programs, they’re building platform preference among future professional game developers.

Companies that jump on the customer-made bandwagon can provide incentives through contests (like Electrolux Design Lab), visibility (like LegoFactory) or royalties. In Microsoft's case, aspiring game developers are motivated to produce quality games because of the visibility, reputation, career and even revenue opportunities provided by this initiative.

With the tools, gamers can create their own games on Windows PCs and upload them into Microsoft's Xbox Live network, which could theoretically sell them to console gamers via download. Pete Moore (head of Microsoft's game business) said that game creators could share their work with others, for free or for purchase. "We're very excited to enable game development at the consumer and hobbyist level,'' said Moore. "For $99, you can create Xbox 360 games. My dream is that a high school student will get a royalty check from Microsoft some day for a game that sells on Xbox Live.''

Whether it’s called grassroots innovation, customer-made or co-creation, this trend is a win-win for companies and customers alike.

Adventure Divas

Last night I wandered down to my favorite bookstore (Browser Books on Fillmore & Sacramento) where I discovered Adventure Divas, written by Holly Morris. I've been suffering from a bit of existential angst lately, feeling like there should be more to my life than this soft complacency that seems to infect much of western civilization. I've been itching for an adventure, so the title called to me.

And so I read about Holly, who chucked her day job in established media to create a television series about real-life heroines making a difference in places like Cuba, India and Brazil. Holly's on a mission to find like-minded, risk-taking women around the globe, and perhaps unite them all into a new model of power and leadership. Her tales include hunting wild boar in Bornio; visiting a brothel in Mumbai where 8-year old sex slaves service up to 20 clients per day; bonding with wild orangutan infants while their native habitat is being methodically destroyed by 24/7 mechanized logging and palm-oil plantations.

I was hooked. I wanted to join the cause.

I put the book down in the middle of the first chapter and rushed to my computer to visit their web site. I wanted to read Holly's blog. I wanted to connect with women around the world who were living their passions. I wanted to meet other self-proclaimed and unapologetic nomads and free spirits (which somehow makes my own nomad tendencies more acceptable to myself).  In short, I was looking to belong to a community of adventure divas.

Yet despite AD's lofty ambitions and objectives, the web site is pure 'traditional establishment': a static site, no interactivity, no blog, no community. Just a place for them to promote their show and their books. What an incredible disappointment. I filled out a form (a form!) to express my hope that they would create a community for this global affinity group, and volunteered some time to chat with them about how they could do it. So many possibilities! What about a destination that allows people to contribute funds to help local divas make a difference in their corners of the world? A mere $100 would probably emancipate some little girl from a life of slavery in the sex trade. What about a community that connects mentors with those who want to discover their adventurous, passionate sides? The web is viral; TV is not. TV certainly gets exposure, but it doesn't support grassroots efforts to change the world.

I am anxious for the day when static web sites are ancient history. Static web sites are dead, musty things. What gives them life is a sense of community, of contribution, of connection. Chances are, there are plenty of volunteers who can inject some life into your web presence... if, that is, you're in a business that inspires some passion. And if you can't find anything in (or related to) your business that a customer could get passionate about, you might start wondering why this particular outlet is where you've chosen to pour 40+ hours per week of your life's energy.

Co-creation vs. Customization

Thanks to some very insightful comments on my recent Co-creation post by Drew, James and David, we've hashed out the difference between co-creation and customization.

We were discussing two scenarios: ordering a half-caf mocha latte at Starbucks versus creating a new Lego kit at LegoFactory. Which one is customization and which is co-creation? They both allow customers to combine pre-made 'parts' into a new creation. Yet the Starbucks customer is creating a concoction for personal enjoyment, while the new customer-created Lego kit is uploaded and made available to other Lego customers for purchase. In the Starbucks example, the customer remains a customer. In the LegoFactory example, the customer becomes the product designer... with no employee agreement... who may want credit for his creation. James mentioned intellectual-property issues with co-creation, and that's precisely the issue that divides co-creation and customization.

So that means that Google's API is actually an example of customization, not co-creation. Developers use Google's API to create tools for their own purposes; to my knowledge, these customer-created tools are not then "cycled back" to be made available to other customers.

OK, perhaps all this is semantic, but customization has been around for a long time. We've always been able to order eggs over-easy instead of scrambled. Co-creation is much deeper... it's about relinquishing control and turning buyers into partners who have a say in what gets produced and made available to everyone else. Which means that they should be rewarded in some way. Obviously this idea of co-creation will make a lot of companies rather uncomfortable.

For more on this subject, visit Trendwatching.com's overview of Customer-Made. It's a good read; thanks to Graham Hill for reminding me of it.

Co-Creation 2

Continuing the conversation about co-creation, here was my definition of it last year on Brandshift. This may address several of the comments in the last post concerning what types of products and services could benefit from co-creation. As the following post was written over a year ago, now's the time to update it and perhaps give more examples within each category. Ideas and comments welcome! A lot has been written in the past year on the topic, but I find it more fun to co-create the idea of co-creation.

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(2.12.05) Thanks to everyone's contributions on defining the concept of co-creation (here and here), I think we're arriving at a pretty good place. Here's where my head's at now:

"An open, ongoing collaboration between employees and customers to define and create products, services, experiences, ideas and information."

Open brings in the idea of transparency, so that non-participants can easily see the collaborative process. This, in my mind, eliminates traditional customer research from the definition.

Ongoing implies that it's not a one-time shot at obtaining customer input and then taking the rest of it in-house. Anyone can participate at any time.

Collaboration brings in the spirit of teamwork. Employees and customers are peers in the process. In many cases, the company simply serves as a facilitator of the process.

Products are probably the most clear-cut application for co-creation: open-source software, Lego Factory, Google's API. We could add Wikipedia to this list as a co-created encyclopedia (although it would also apply to information and ideas).

Information is probably the next obvious application: epinions.com, Amazon.com, MarketingProf's Idea Exchange.

Experiences: This gets a bit more fuzzy. A good example is probably Apple iTunes/iPod customized playlists... the company provided the tools to allow customers to create their own music experience. We could get really fuzzy here and say that because a brand is an idea in the minds of customers, then all brands are co-created. But I won't say it, because I think it's confusing the issue. Any more tangible examples of co-created experiences?

Services: This is another tough one. Typically a service company exists to do something that a customer doesn't want to do. Again, would love some ideas on how service companies could work with customers to co-create.

Ideas: What we're doing now, co-creating this definition of co-creation.

Co-creation

I wrote a series of posts over a year ago on Corante's Brandshift on co-creation. Since that group blog has slowly died out (replaced by Corante's Marketing Hub), I'd like to salvage these posts and bring them back for discussion. Co-creation is one of those trends that will have a major impact on businesses in the coming months and years... it's a result of the emerging networked economy: a grassroots, bottom-up, self-organizing way of living and doing business. More on self-organizing systems later; for now, here's the first in a series of 7 or 8 posts on the subject of co-creation. I unfortunately can't bring over all the insightful comments, but hopefully we can generate a new discussion.

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We're getting into some juicy conversation in John Winsor's recent post. There's a comment that I'd like to bring to the forefront because it's an oft-misunderstood idea: co-creation.

"...good products are good products, they don't need transparency or co-creation. Co-creation is what people on the outside want when they want to associate themselves with cool products. You don't let the slimy masses in to medocritate the product, you keep them striving to be a part of the clique."

There are different levels of co-creation; how far you take it depends on your product and industry. Here are a few terrific examples of deep co-creation:

1. Open-source software. No explanation needed.

2. Google's new API for online ads. An article in eWeek reports:

"There are a lot of things Google hasn't thought of that people could do with their ad campaigns," said Nelson Minar, a Google software engineer. "One of goals is to enable advertisers and third parties to create tools for their own purposes."

3. Lego's Lego Factory, where kids design new Lego models using a Digital Designer and submit them to competitions. This is a primary source of ideas for new Lego products.

In each of these cases, no one made assumptions about what customers wanted. Customers were brought directly into the process. In shallower levels of co-creation, customers aren't directly involved in designing products... but companies still seek to understand customers' mindsets, desires and unmet needs.

Apple is one of those anomalies where one man had an aesthetic vision, created a company and products in his own image, and everyone jumped on the bandwagon. If you think you can replicate Apple's success in this fashion, go for it; but I'd suggest that some form of co-creation is infinitely easier. BTW, I do believe that Apple's brand is a form of co-creation: the "in-crowd" that formed around the Apple brand was created by customers, not by Apple.

Companies who view customers as "slimy masses" can never be successful in the long run; it is those customers who make corporate existence possible. Customers smell arrogance like a dog smells fear. Microsoft is a great example of a company who became incredibly successful based on following their own vision... which ultimately resulted in customer resentment. Now with over 1200 Microsoft employees participating in the blogosphere, the company has actively, publicly entered into dialogues with customers. Robert Scoble gets a ton of suggestions from customers and passes them on to the right folks internally. Microsoft is beginning to co-create.

Does this mean we should always do what customers say? Of course not. But we should always be listening to them to ensure that our products and services maintain relevance in today's rapidly changing environment. We design products and services that people will buy... and we find out what people will buy by listening, observing and participating in dialogues. There's a terrific example of this in the book "Hardball" that discusses how Whirlpool co-created their new line of appliances by deeply understanding the life of a woman named Gail.

If anyone has other examples of co-created products and services, I'd love to hear about them. This is a tidal-wave trend; customers want to be heard, and they will buy from those companies who demonstrate a willingness to listen. Sure, we could say that co-creation is just pig lipstick for customer research... at the shallower end, perhaps. But the concept of co-creation goes much deeper and farther than the traditional idea of research. In co-creation, customers truly feel like they are a part of the company (family, ecosystem, etc.) and that their voice is heard.

Interview with Sam Decker

I had a nice email chat with the always-insightful Sam Decker this weekend. He's just left Dell to join Bazaarvoice, a word-of-mouth start-up based in Austin, Tx. And like any respectable word-of-mouth marketer, he turned to blogs (like mine) to get the word out.

Q. How does Bazaarvoice encourage word of mouth? Is it just viral email campaigns, or do you consult with businesses to make them more talk-worthy?

A. Our company and full solution details are still in 'stealth mode', but I can say we provide managed technology, services and analysis to put word of mouth on eCommerce web sites. We don't do buzz or viral campaigns. We're 100% focused on putting a system in place that enables customer conversations about our clients' products. Which we think is the 'bullseye' of word of mouth.

Q. How do you track results?

A. Since the customer conversations occur on the client's web site, they can monitor activity and correlate it to web analytics, customer information, and financial data. We have live clients and they are seeing higher conversion and average order value. We also believe there are benefits in customer satisfaction, loyalty, and reduced returns.

Q. Companies that offer a great experience naturally get word of mouth. Companies who aren't being talked about probably aren't all that interesting. So wouldn't a word of mouth campaign backfire unless it was done for a company that doesn't need it?

A. You're absolutely right. Great companies naturally get word of mouth. By putting a system in place to enable and encourage customers talking, they will accelerate even faster. Companies that have 'opportunities' can also benefit from word of mouth because by integrating the customer voice closer to the brand, within their customer experience, then word of mouth is now part of operations. It's the most tangible form of feedback and its visibility necessitates attention and improvement. Keep in mind there are companies that carry many products. An online retailer is a perfect example, which carries products that are great and not so great. It is in their best interest to let the natural selection of word of mouth help the best products succeed. 

Q. What kind of companies are you looking to work with?

A. Our first clients, and most obvious, are online retailers and service providers. Our system can work for any industry vertical. For the reason you mention above, the next best clients are online manufacturers that are confident in their products, company and employees. As you say, great companies naturally get word of mouth. Our solution helps customers build their business.

Q. Why Bazaarvoice? Might there be confusion with 'bizarre' when heard & not seen?

A. Ah...you're the first to ask, but probably not the last. Bazaarvoice means 'voice of the marketplace'. The meaning was inspired by Cluetrain Manifesto (see Chapter 4 ). Bazaars were the earliest forms of markets, where customer-to-customer conversations influenced what was bought and sold. By bringing the voice into today's open, online marketplace we believe companies will win. And, yes, there is a double meaning. Many companies will find it 'bizarre' to put customers in charge, making their opinions and voice part of their brand. Cluetrain was written in 1999, and it seems just now companies are starting to wake up to its idea. By the way, bizarrevoice.com will redirect to our site. See the full story of our name on our web site.

If you want to comment on this subject, I'm sure Sam will be happy to join the fray. If you're interested in Bazaarvoice's services for your company, you can contact Sam directly at sam @ bazaarvoice dot com.

Community intelligence

I've been thinking a lot on community intelligence and co-creation, and a number of stories have caught my eye recently:

A couple days ago,  Reveries had a great article on the 3 stages of evolution in search.

"You can look at the evolution of search as a play in three acts," says Jeff Weiner, Yahoo’s vp of search and marketing, as quoted by James Fallows in The New York Times (11/6/05).

1. Act One is the ‘public’ web, where if different people type the same query they’ll get the same results.
2. Act Two is searching for whatever you’ve filed in your own hard drive.
3. Act Three  is “social” or “community” searching, where the results are improved based on the successes of other people’s searches for the same information.

It's basically search + human intelligence. Cool stuff. Perhaps Yahoo will start giving Google a run for its money. Then this morning I came across an old but very interesting post on IFTF's Future Now blog that discusses

"whether peer-to-peer networks and other tools that facilitate "peer production" (to use Benkler's term) could help create a new role for amateurs as active contributors to science.  

The great example is NASA Clickworkers (no longer active, but described in articles in American Scientist, Space.com, BBC Tech, and elsewhere) a system that allowed volunteers to do routine analysis of Martian landscapes. The results were pretty good, and as Benkler put it, showed "how complex professional tasks that required budgeting the full time salaries of a number of highly trained individuals can be reorganized so as to be performed by tens of thousands of volunteers." (Benkler, "Coase's Penguin," 16)"

Businesses of all sizes are beginning to apply the power of community intelligence. @Last Software, a new client of mine, has incredibly active forums on their web site that enable users to showcase their designs using @Last's 3D design software, solicit feedback, get tips and tricks from other users, submit Ruby scripts for enhanced functionality, share custom-designed components and more. This loyal community of 'volunteer employees' adds value and reduces the workload for customer service and product development. LegoFactory is another great exampleof community intelligence and co-creation that I've talked about before.

I think there's a certain amount of fear among executives about this idea. I once recommended The Wisdom of Crowds to an investor client of mine, and he had such a hard time with the core premise that he put down the book in the second chapter. How could thousands or millions of untrained people come up with a solution that's equal to (or better than) the experts? But it happens every day.  The most recent data point is the finding that Wikipedia is as accurate as Encyclopedia Brittanica on science topics. (from CNN.com:)

Based on 42 articles reviewed by experts, the average scientific entry in Wikipedia contained four errors or omissions, while Britannica had three.

Of eight "serious errors" the reviewers found -- including misinterpretations of important concepts -- four came from each source, the journal reported.

Unlike Britannica, which charges for its content and pays a staff of experts to research and write its articles, Wikipedia gives away its content for free and allows anyone -- amateur or professional, expert or novice -- to submit and edit entries.

If millions of unpaid volunteers can create  accurate content, provide tech support, write programs that improve the value of a product, enable cost-efficient scientific analysis and improve web search... where does that leave companies? You might consider thinking of your business as a facilitator instead of an all-knowing entity that must retain control over every aspect of the business.

Just a thought.