BMW employs thousands of R & D professionals in their Silicon Valley center, dedicated to producing software for its cars. But when the time came to rethink their telematic features for future models (such as the GPS navigation system), the company released a digital design kit on its web site to encourage interested customers to design them instead. Thousands responded and shared ideas with company engineers, many of which turned into valuable initiatives. Now BMW hosts a “Virtual innovation agency” on its web site, where small and medium businesses or customers can submit ideas in hopes of establishing a business relationship. Is it the web, which has made BMW to think differently?  

Less high tech that BMW, John Fluevog is a designer of high end shoes since 1980. He may not compete with Nike, but his world famous shoes have been selling reliably to an expanding customer base. Inspired by the Linux phenomenon, Fluevog created has created open source footwear (though the process only loose resembles those employed in the open source community ;)) Customers submit designs for consideration and the best one gets put into production. While Fluevog isn’t offering royalties or placing the design IP or the design back to the hands of “the community,” he has promised to adorn any shoe design he adopts with the name of the “designer”.

These cases illustrates how smart companies are reaching out to involve customers and lead users directly in the product development process by their own will to harness mass collaborative, innovation and building a large development ecosystem around their proprietary products. We at EPiServer have been witnessing similar blurring gap between our partners, customers & our initiaves. Most companies confuse the significance of prosumption and this development with ‘customer centricity’ where companies decide what the basics are and customers/partners get to modify certain elements, like customize your PC, your vehicle or even TiVO – which makes the customer ‘the programmer’ of the TV schedule itself. But ironically, all this customer centricity is pretty much business as usual.

Consider how the vibrant community around the product, “Lego” was built! Lego, better known for making little interlock plastic bricks, this company intended to focus of high-tech toys (robotic systems for teenagers and kids) with the launch of the ‘Lego Mindstorms’ since the product made its debut launch in 1998. Marketing officials were surprised to discover that the robotics toys were popular not only with teenagers but with adult hobbyists eager to improve on them. Within three weeks of its release, user groups had sprung up with tinkerers had reverse engineered and reprogrammed the sensors, motors and controller devices at the heart of the Mindstorms robotic system. The company initially threatened law suits, but when the users rebelled, Lego finally came around and ultimately incorporated user ideas. It even wrote a “right to hack” into the Mindstorm software license, giving hobbyists explicit permission to let their imagination run wild.

Today Lego uses http://mindstorms.lego.com to encourage tinkering with its software. The website offers a free, downloadable SDK; Lego’s customers in turn use this site to post description of their Mindstorms creations-and the software code, programming instructions, and Lego parts that the devices require. The Lego World 2005 in the Netherlands, one participant revealed a full size, fully functional pinball machine made from 20,000 Lego blocks and thirteen programmable microchips. WOW!!! Literally, customers can make whatever they want, and Lego transforms its legion of youthful customers into decentralized virtual teams that invents and swaps models. With Lego factory, Lego can expand beyond their one hundred in-house product designers to marvel at the creativity of more than three hundred thousand designers worldwide and the company has moved far beyond customer centricity to harness a full-fledged prosumer community that will help and ensure that Lego remains a vibrant source of innovation for many years to come.  

Let’s take another one, say Apples iPod for instance: the now ubiquitous music and media player is one of the most popular electronic devices to emerge in the last decade. Perhaps not surprising in this day and age, Apple’s customers are even more ambitious, why not transform the iPod into a general purpose wearable computer that has everything from video games to Wikipedia? All purpose wearable computers may already be in Apples game plan – after all Steve Jobs has partnered with Nike to integrate the iPod into the popular sports gear line J But the company is very tight-lipped about their product roadmap and the problem which the lead users face is that iPod is a closed system. No documentation for the software or tools to help developers turn it into something else is available. Of course, this has never stopped users before and, users have taken matters into their own hands. Whether it’s modifying the casing, installing custom software, or tearing it up and doubling the memory, users are transforming the ubiquitous music and media player into something unique. Tens of thousands of users gather online, swap ideas and coordinate actions. Thousands of customer driven hacks and programs have evolved, the most powerful is a program called Podzilla---essentially a bare bones version of Linux with a graphical user interface that runs on the iPod tiny screens. Once users install the hack, they can boot their iPod as usual, or fire up Podzilla for a pocket Linux environment. Podzilla transforms the iPod, allowing users to view pictures, play several games, and play record audio at full CD quality. Add a keyboard that can be plugged into a headphone jack, and it could become a fully functional PDA, capable of editing calendars, address book and emails. Another application called PodQuest, allows you to download driving directions from Google Maps, MapQuest, Yahoo Maps, etc.

Steve Jobs knows the company walks a very thin line. Apples iTunes/iPods business model is built on its very lack of interoperability and Apples Digital Rights Management software – FairPlay --- prevents consumers to make copies and many other things. But what’s the percentage of such hacks as opposed to the percentage of worldwide sales? What happens when the “the bad guys” are not just competitors but your most loyal and engaged customers? The iPods closed architecture is good to keep competition away, but it’s also limits and cripples what users can do with the device. Will Apple walk the same lane as Sony BMG?

A few more questions which haunt me more -- Can our users turn our products into something different and take it to a mainstream marketplace? Or, does a business model that locks in customers and discourages user innovation genuinely sustainable now? So here’s the dilemma: a company that gives its customers free reign to hack risks cannibalizing its business model and losing control to its platform, scary isn’t it?  EPiServer being a platform for developers, which allows thousands of companies to cook unique recipe based on our API's and open controls -- does this phenomena apply to us? Maybe, our users/partners can make a better CMS platform -- if we are to embrace them openly. Embracing this consumer power and managing this change, requires a new paradigm shift within companies at the risk of losing its assets. Let’s discuss more ...

(References and excerpts from, “Democratizing Information” by Dr. Eric von Hippel of MIT; The Third Wave – New York: bantam Books; The story of a clever hacker from Frankfurt-Germany: For more details check Wikipedia; KSG research report: Anthony Williams, WikiNomics)