One of the newest business models that Internet startups can capitalize on is the user-centered innovation model. This model goes against the traditional business model where companies make the product and customers buy it. The advent of this new creative economy fostered by users is ideal for entrepreneurs looking to start introduce a new product or service, but doesn't have a lot of money to invest.
The basis of user-centered innovation is active participation of the user in the development of products and services. This active role of the user is one in which the user of products are able to develop what they need for themselves. The platform for innovation is provided by a host, who then manufactures and distributes the product.
To illustrate a case of user-centered innovation, take the company Threadless, founded by Jake Nickell and Jeffrey Kalmikoff. On its online social network site, Threadless runs design contest. Members of the network submit their ideas for t-shirts, and then vote on the one they like best. The site's community is comprised of hundreds of thousands of people who utilize the site as a community forum, to blog, chat and communicate about designs. As a result Nickell and Kalmikoff have sold so many winning design t-shirts, at $15 each, that Threadless has seen growth of 500 percent a year. All this without advertising, a sales force, or the use of graphic designers.
The beauty of Threadless is its simplicity. Based on the success of Threadless, one can rightly assume that online communities can drive a non-technical product. “Threadless completely blurs that line of how is the producer and who is a consumer, " says Karim Lakhami, a professor at the Harvard Business School. “The customers end up playing a critical role across all its operations: idea generation, marketing, sales forecasting. All that has been distributed. "
Wikipedia.com is another example of user-centered innovation at its best. Wikipedia, a user-generated encyclopedia, pays its writers nothing and possess no expertise at all. But, it has surpassed Encyclopedia Britannica as the most read online encyclopedia.
A study published in the Harvard Business Review found that prizes motivate user-innovators, but prizes alone are not a sufficient reward. The feeling of taking on a novel problem has a bigger reward. When Nickell and DeHart held their first contest in November 2000, the grand prize was two free t-shirts, and the promise that any proceeds would be reinvested in future contests. “It wasn't so much the money, " said artist Glenn Jones who won $150 in a contest in 2004. “It was how cool it was to get your shirts printed. "
How can entrepreneurs begin to capitalize on user innovation? I have compiled a few tips to help you get started.
*Start with an ideas that you are passionate about. You must be willing to be actively involved in the online community. It is easier to be involved and to get excited about something that you are passionate about.
*Consider both technical and non-technical products and or services. Every great innovation does not have to be technical. Remember that innovation is based on fulfilling customer's needs and wants, and every customer does not need or want a technical product.
*Identify or develop a community of potential users that share the same passion. Research professional associations and or personal organizations that share like passions as yours, and solicit feedback on products or services.
*Encourage immediate feedback and communication from users. The idea is to give the customer what they want, and the only way to do that is to listen.
*If your product or idea is of a technical nature, provide a user toolkit. A user toolkit enables users to convert their ideas into individual products. These toolkits allow trial-and-error experimentation and deliver immediate feedback on the potential outcome of the idea.
The concept of user-innovation is a new area in research that is gaining momentum as the success of organizations such as Threadless, and Web 2.0 technology continues to grow. The opportunities for a small business or entrepreneurs are abundant and tangible, with a little creativity, hard work, and passion.
Natasha is the owner of a freelance writing business, Inscribe Communications. Inscribe specializes in public relations and marketing writing, business writing, editing and proofreading services. Clients of Inscribe includes law firms, marketing and advertising firms, and small to medium-size retail organizations.
Natasha earned a B. S.in Public Relations from the University of Florida in 1996. In addition she also holds a M. B. A. from Webster University, in St. Louis, MO. She is currently working on a Ph. D.in Applied Management and Decision Sciences from Walden University. Natasha's research specializations are, E-retail, the Internet's effects on the retail and fashion industries, and E-shopping personalization through the use of intelligent software agents.
Natasha is also a contributing writer for Blacksonville and Shades of Pink Magazine.