Professional Documents
Culture Documents
"Learning at the boundary of the firm: What Happens between Learning-by-Doing and
Learning-by-Using" (Sung Joo Bae, MIT)
"User Innovation in the Medical Device Industry" (Aaron Chatterji, Duke University)
"User Innovation: Incidence and Transfer to Producers" (Jereon de Jong, Erasmus
University)
"Founder identity and variation in opportunity recognition & exploitation" (Emmanuelle
Fauchart, University of Lausanne)
"Harnessing "lead user" Innovation : From Collaborative User Communities to Mass
Market" (Salah Hassan, George Washington University)
"The Dynamics of User Innovation - Drivers and Impediments" (Christina Raasch,
Hamburg University of Technology)
Learning at the boundary of the firm
Manufacturer User
Learning Learning
Language A Language B
Learning in
Joint Product
Development
Projects
The influence of language difference on joint
product development
Manufacturer User
Learning Learning
Language A Language B
Learning in
Joint Product
Development
Projects
Empirical Evidence
• Field study with a Canadian manufacturer of custom-made
enclosures
• Joint product development between users and the manufacturer
• Main customers
– Research labs and new product development teams & low-volume
manufacturers
– E.g. Boeing, IBM, three divisions of NASA, UCLA, Stanford University and MIT,
etc.
• Interviews at the manufacturing site (Sales support, Tech support,
etc.)
• Interviews with representative users
• Analysis of archival data
– Customer Relationship Management (CRM) & Order Management System (OMS)
– 899 projects
– 8400+ emails and call logs (5%)
Joint Development Projects
Type of
Interaction
Initial Contacts
Orders
2.74 hrs
Design Iteration
CAD Drawing
Confirmation Avg. 82 hrs
Manufacturing
Templating
Duration
N = 899 projects
Communication Pattern
700
642
Number of Communication Instances
600
500
396
400
368
Frequency
300
200
104
100
0
Initial contacts prior to Design iteration Manufacturing After the delivery of the
official start of projects product
what is the e-drawing?... and how will it differ from what i sent you?...
User e-drawing required because of the material thickness change?
sean
Hello Sam,
Customer The e-drawing is a 3d model of your rackmount. The e-drawing will give you
the opportunity to evaluate your part before we take it into production.
Representative You can view the e-drawing with your regular Internet browser.
Best Regards,
Simon
Content Analysis
Communication Pattern during the Joint Development
Projects
500
450
400
Number of Cases
350
300 PRICE
DESIGN
250
SHIPPING
200 LANGUAGE
COMMUNICATION
150 FEEDBACK
100
50
0
Initial contacts prior to Design iteration Manufacturing After the delivery of the
official start of projects product
Project Phases
The Role of Physician Innovation, Collaboration and
Entrepreneurship in the Medical Device Industry
Aaron K. Chatterji
Kira Fabrizio
Duke University
Fuqua School of Business
This work is part of a research agenda on the
knowledge sources for innovation and entrepreneurship
Dissertation work
Spawning
Several cases of doctors inventing devices and starting companies
How important is “user innovation” in the medical device
industry?
Extent and impact (under review)
Conflicts of interest (under review)
How do corporations access and exploit user knowledge?
Exploration vs. Exploitation (preliminary results)
Secondary data
NBER Patent Data
AMA database-2006 Snapshot
Demographic and workplace data on all (currently 819,443) licensed physicians
(e.g. practice type, specialty, location, history of state licenses, school, year
graduation, group vs. solo practice)
Match names to patent database to identify innovations patented by doctors.
Use data to know whether they are in practice or work at companies
Plans for a potential survey of physician inventors
Of the over 26,000 patents filed for medical devices
between 1990-1996, over 5,000 were filed by
physicians
Table 1
Sample Summary Statistics: Means and Test for Difference of Means
N = 26,158 (full sample); 5053 (doctor); 21005 (non-doctor)
Jeroen de Jong
RSM Erasmus University &
EIM Business and Policy Research
The Netherlands
August 4 2008
Industrial products n % innovating
August 2008
HBS-MIT user innovation workshop
Entrepreneurship /
Prior literature
Why individuals recognize different
opportunities and exploit them
differently?
Literature says: prior knowledge,
social networks and cognitive
aptitudes
We add another factor: the
entrepreneur’s identity
Identity theory
We draw upon identity theory to frame our
argument that the « motives and
sentiments » (Turner) of a firm founder
affects the opportunity he recognizes and
the early strategic decisions he makes to
exploit it
If an identity is salient for a given role, it
affects behaviors / actions
Individuals undertake actions that are
consistent with their « motives and
sentiments »
Founder identities
From our interviews we were able to
extract 4 dimensions along which there was
great variance regarding the interviewees’
« motives and sentiments » for starting a
firm in their field
And we derived two ‘extreme’ salient
identities:
- business oriented identity
- community oriented identity
Founder identity affects
entrepreneurial actions
Founders with different identities
differ systematically along :
- the type of opportunity they
recognize / what they perceive is
worth bringing to the market, to
whom and how
- the early strategic decisions they
make to exploit that opportunity (IP
policy, marketing…)
Implications
Better understanding of the factors
shaping opportunity recognition and
exploitation / sources of variance
among firms
Contributions of different types of
entrepreneurs to industry
development & consumer welfare
Opens numerous research questions
Harnessing "lead user" Innovation:
From Collaborative User Communities
to Mass Market (Brief Presentation)
P 4a, b Intent to
Ideal Innovation’s Communicate
Expected
Opinion Leaders WOM
Attributes
Characteristics
Relative Advantage
Knowledge Compatibility
Social Influence P 2a, b Complexity
Community Active Trialability
Innovativeness Observability
Information Sharing Usability
Creativity Communicability
Control Variables
Socio-Economic, Demographic, and Marketing Mix Variables
Copyright © 2007, Salah S. Hassan, Ph.D. All rights reserved
Operationalization of the Research Model
Lead Users
1st Stage
Characteristics
Need
Dissatisfaction w/
existing products
Value/ benefit seekers
Capabilities
Motivation
Experience
Radical
Participation
in a TIC*
Ideas / Ideal
Innovation
Opinion Leaders
Characteristics
Knowledge
Social Influence
Community Active
Innovativeness
Information Sharing
Creativity Control Variables
Socio-Economic, Demographic, and Marketing Mix Variables
* TIC, Tookit for Idea Competition, see Piller and Walcher, 2006
34 most 8 clustered
innovative Laptop
76 ideas
collected
Expert Panel
* TIC, Tookit for Idea Competition, see Piller and Walcher, 2006
Opinion Bell-shaped
Leaders Frequency
curve
_ _ _ _
0 x - 2sd x - sd x x + sd
Time
THANK YOU!
Salah S. Hassan, Ph.D.
Chair & Professor of Marketing
School of Business
The George Washington University
E-mail: hassan@gwu.edu
Cornelius Herstatt, Christina Raasch Hamburg University of Technology
Study focus
• How does the level of user innovation activity evolve over time?
Methodology
Research field
10
8
Age of winning design in years
: International
7
championships
(world or European)
6
▲: National
5 championships
(Australian or UK)
4
0
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Year of championship
Drivers/
impediments User satisfaction
of user Technology complexity
innovation
activity Market structure
Barriers to user
innovation
Technology maturity
Technology
maturity
In our case study we find…
High
• A re-focusing of user activity
Technology
after exogenous or endo-
Market
complexity concentration genous changes in the
High High innovation environment
• Please refer to
Raasch, C., Herstatt, C. (2008) The dynamics of user innovation:
Drivers and impediments of innovation activities,
International Journal of Innovation Management, forthcoming
THANKS!
- 5-
Track 2: Policy & User Entrepreneurship (Hawes 102)
Monday Aug. 4 2:00 - 3:30
"Conditions under which collaborative user innovation dominates producer innovation"
(Carliss Baldwin, Harvard Business School)
"Drawing User Innovation into Policy: The UK Experience" (Steve Flowers, University
of Brighton)
"The Accidental Entrenpreur: The Emergent and Collective Process of User
Entrenpreneurship" (Mary Tripsas, Harvard Business School)
Corporate Venture Capital and User Entreprenuership in Medical Device Industry
(Sheryl Winston Smith, Temple University)
"Professional-User Innovation Commercialization and Entrepreneurship" (Jennifer
Woolley, Santa Clara University)
Where Will Op en
Develop m ent Com m u nities
Prevail?
Carliss Y. Baldwin
Eric von Hippel
A No Innovation
B Singleton User Innovation Only
B A C Producer Innovation Only
D SUI and Producer Innovation Coexist
E SUI OR Producer Innovation
Com- F Collaborative User Innovation Only
muni- G CUI and Producer Innovation Coexist
cation H CUI and SUI Coexist
cost, b I All Three Forms Coexist
E
D
C
G
I F
H
Design cost, d
Slide 4 © Carliss Y. Baldwin and Eric von Hippel 2008
This demonstrates the limits of
modeling…
Come to our session to see what we
plan to do instead!
UserThe
Innovation in the
New Inventors UK
Working to change the linear view of innovation
Steve Flowers
CENTRIM
University of Brighton
CENTRIM/SPRU
Overview
• Inform academic & policy community
– Linear model hangover
• Explore user innovation in UK context
• Case studies
• Metrics and indicators
• Questions:
– value, measurement, relevance,
significance…etc
CENTRIM/SPRU
Policy recommendations
Steve Flowers
CENTRIM
University of Brighton
CENTRIM/SPRU
MY RESEARCH ON INNOVATION AND USERS:
THE 5-MINUTE VERSION
Mary Tripsas
Harvard Business School
Customer Preference Discontinuities: A Trigger for
Radical Technological Change
(Managerial and Decision Economics, 2008)
100.00
80.00
60.00
cps
40.00
20.00
0.00
1945 1950 1955 1960 1965 1970 1975 1980
Next-generation CRT
machine introduced
(1965)
“User entrepreneurs” were the first to
introduce new technology to the industry
• Photon (first electro-mechanical analog phototypesetter)
– “We were asked to publish a French patent gazette in the most
economical manner…. Mr. Higonnet was told that in order to prepare a
plate for offset printing it was necessary to cast lines of type, lock them in
chases, set them up on the press and then produce only one good repro
proof…his reaction was immediate: there should be a market for a
photographic type composing machine.”
» Photon inventor
• Alphanumeric (first CRT phototypesetter)
– “Alphanumeric’s potential market is the portion of the $1.5 billion
typesetting market that produces non-creative and repetitive information
for printing and publishing…. It is anticipated that this unit connected to a
general purpose computer will provide the necessary hardware for the
company to initiate a photocomposition service.”
» 1964 offering brochure
The Accidental Entrepreneur: The Emergent and
Collective Process of User Entrepreneurship
(Strategic Entrep Journal, 2007 with S. Shah)
Motivation
Why do firms make direct equity investment in entrepreneurial companies?
Some possibilities:
Harvest external ideas and capabilities
Synergy
Strategic goals
Financial returns
Mutually exclusive? Time horizon?
“collaborative
“As ecosystem
a strategic investor, JJDCto help accelerate
invests the pace
in companies oftechnologies
with innovation, driven
that by
“The whole address
“Leveraging idea
ever-advancing
potentially iscustomer
tomajor
our hybridget aunmet
pulse
internal and
needs” of external
the industry….the
(IBM
medical VPresearch
needs. investment
JJDCmodel
corporate will group
to identify,
strategy,
seek Claudia
to was
Fanits
maximize
the eyes
nurture
Munce,
return on and
and
in ears
The of Medtronic.”
commercialize
MoneyTree™,
investment, similar (Michael
promising
any Ellwein,
new VC.
other former and
technologies”
to PricewaterhouseCoopers
” Chiefthe National
Development Officer)
Venture Capital Association, 2006)
Setting:
• Medical device industry, 1978-2007
• CVC investment by medical device firms in 134 entrepreneurial startups
Methods:
• Grounded research + theory → testable hypotheses
• Novel project-level data on CVC and patenting → performance of CVC investment
Research strategy
Grounded research
Semi-structured interviews (Medtronic, University of Minnesota, Georgia Tech)
Theory + GR → testable hypotheses
Empirical analysis
Construct dataset: micro-level project data
Analytically test relationship between entrepreneurial innovation and firm
performance
Hypotheses
Sample selection
Jennifer L. Woolley
Santa Clara University
User innovators
End-user:
individual uses product in daily life
Employee:
Embedded in organization
Creates innovation in same industry as organization
Professional-user:
Embedded in organization
Uses product in professional life
Create innovation in different industry as
organization.
Summary: Process of Professional-User
Innovation Commercialization and
Entrepreneurship
Firm internalizes
production of innovation
Firm sells IP of
innovation to professional-
user to spin-off
Propositions
Firm internalizes
production of innovation
Firm sells IP of
innovation to professional-
user to spin-off
Implications
Finds that professional-user innovators are sources
of technological development, intrapreneurship,
and entrepreneurship.
Explores the options that a firm has with
professional-user innovations
Provides insight into processes that occur prior to
the founding of a firm.
Track 3: Communities (Hawes 202)
Monday Aug. 4 2:00 - 3:30
"Revisiting Generalized Exchange: Extending Theory to Understand Wikipedia, Open
Source & Other Collaborative Communities" (David Gomulya, University of
Washington)
"Status Effects in Technological Communities" (Lee Fleming, Harvard Business
School) *
"How are users’ membership in brand communities influencing them as innovators?"
(Yun Mi Antorini, Aarhus School of Business)
"The Challenge of Knowledge Novelty and Reuse in Distributed Innovation" (Karim
Lakhani, Harvard Business School)
A
Common
pool
D
B E
THE PUZZLE
Stay tuned!
Come to our talk!
Track 3, Hawes 202, 2pm
YUN MI ANTORINI
Assistant Professor
Department of Language and
Business Communication
Aarhus School of Business
Denmark
MY PROJECT
How are users’ membership in
brand communities influencing
them as innovators?
MY CASE
The Adult fan of LEGO
community
• 80,000 Robotics Invention Systems were sold within the first three
months.
• Many sets were sold not to children, but to students at MIT, Stanford,
and other universities around the world.
>250 sets
>250 sets
>850 sets
Space
Castle Town
>350 sets
>4.000 products Trains
Yahoo!
Group Group LEGO set LEGO set
message database reference …
Yahoo!
… …
Group
EJTC LEGO
Recent 7 days sets
FGLTC Official >6.000 sets inventoried
Recommended ranked
LEGO sites Group Peeron >12.000 unique
group messages Group
message message Guide to parts listed
… Train Clubs LEGO products Parts
Yahoo! reference
> 500 links …
Group …
Spotlight Shopping
… Robotics
Links guide
LEGO Jeff
listings Hall
LEGO Events
Ambassadors
Forums
64 different BrickWorld
forums
…
74 different
Local … 1000
User groups Space Steineland
DK CAD Help/FAQ
Trains …
Israel Lugnet
USA FAQ
Chile Acronym
guide History of
LEGO
MY MOST IMPORTANT FINDINGS
BRANDING LITERATURE:
• Brand meanings define a “playground” within which the innovator
expresses his or hers ideas.
• Brand meanings help innovators distinguish between “great
creations” and “old trash”, “pure” and “poor” innovations, “useful” and
“non-useful” product improvements.
METHODOLOGY:
• A multi-method/multi-sample approach offers substantial benefits,
when investigating social and dynamic phenomena, such as user
communities.
The Dynamics of Collaborative
Innovation:
Exploring the tension between knowledge novelty and reuse
Work in Progress
2
MATLAB Programming Contest is a Unique Setting to
Explore and Inform Collaborative Innovation Theory
3
A One Week “Wiki-like” Programming Contest
standings
rules
1 Carliss
view entry
2 Stefan
Carliss
3 Eric
fcn f(x)
...
standings Joachim
fcn f(x)
1 Joachim ...
2 Carliss
3 Stefan
4 Eric
new entry
4
Nathan says…
Well, this is my first
MATLAB contest and it is
giving me far too much
enjoyment. It's one of the
most addictive and
compulsive things I have
tried... Also, I have
experienced physical
trembling while making the
final preparations to submit
code. Is that normal?
5
Contest Consists of Three Phases:
Darkness, Twilight and Daylight
Better
Better
7
Time
Reuse of Code Dominant Feature of Contest
Leaders borrow from average 19 other people Average 89% of Leader code is borrowed
8
The Emergence of Architecture:
Coordination across Boundaries at ATLAS, CERN
Ofer Arazy*
Oded Nov**
Ray Patterson*
Lisa Yeo*
Insiders
Middle
Outsiders
Group Composition
Functional Diversity & Typical Function
Functional Insider
Diversity
Middle
25% 40% Outsider
High
35% 35%
40% 25%
45% 55%
5%
5%
55% 45%
Low
Typical
Outsider Insider Member
Function
Research Model
Functional
Diversity
H1: +
H3: +
H5a: +
Team Task Conflict Product
Quality
Functional
H5b: -
Composition
H4: -
H2: -
Typical
Function
Research Method
• Two samples of Wikipedia articles (100 and 50
articles each)
– Each article viewed as a team project
• Operationalization
– Product Quality (dependent variable): information quality
perceptions
• Different method for the 2 different samples
– Typical Function and Functional Diversity: metrics
extracted from Wikipedia
– Task Conflict: text analysis of articles’ discussion pages (3
independent raters), adapting Jehn & Mannix (2001)
instrument
Results (Sample1 / Sample2)
** = P<0.05
Functional * = P<0.10
Diversity
.34**/.60**
.24**/.37**
.48**/.71**
Team Task Conflict Product Quality
Functional
R2=14% / 20% R2=29% / 27%
Composition -.30**/-.38*
-.27**/-.32**
-.52**/-.81**
Typical
Function
Do lead users appreciate
the community
around product co-design?
• Are lead user inherently (not) inclined or can firms “seduce” them by
attractive platform features?
– gain additional insight from a random utility / choice framework
(McFadden 1986)
– results / framework might help firms in developing and targeting co-design platforms
Research model and hypotheses
• Good news for firms - lead users are inherently attracted to co-design
– several LU variables make independent contributions to co-design adoption likelihood
– “being innovative” partly moderates “expected benefits”, albeit positively
– results point to a broader set of variables that firms may use to identify LU for co-design
Charles Snow
Christopher Lettl
Øystein Fjeldstad
Raymond Miles
Study Background
Since the 1990s various types of communities have
demonstrated the ability to innovate via collaboration.
Miles, Miles, & Snow (2005) predict that a purposefully
designed community of firms will emerge somewhere in
the world by 2010. They create a hypothetical example
called OpWin Global Network.
Miles is invited by Blade.org to speak on the occasion of
its first birthday in February 2007. He believes the
community should be studied and invites Snow to join
him.
They form a seven-member international research team
that includes Christopher Lettl and Øystein Fjeldstad.
Designing a Collaborative
Innovation Community
According to Miles, Miles, & Snow (2005):
Build the community around a shared interest.
Linus Dahlander
l.dahlander@imperial.ac.uk
Siobhan O’Mahony
somahony@ucdavis.edu
HBS Conference on User and Open Innovation
August 5, 2008
Theoretical Gap
• Lateral authority distinguishes project work in community and
network forms (Powell, 1990; Adler, 2001), however little is
known about how lateral authority is enacted
Progression to
Increased lateral authority Governing authority over
7-11 the project but do not gain
Elected
authority over individuals.
leaders
Social engagement:
Number of new threads 9.05 11.96 **
Number of ties .0112789 .0191237 ***
Coordination:
Number of responses to threads 40.61 106.03 ***
Sub-community participation .0618159 .0826997 ***
Theoretical Contributions
Theoretical Gap:
• Few have examined how lateral authority is enacted
• Previous work shows the importance of boundary spanning
(Tushman, 1977; Ancona and Caldwell, 1992; Podolny &
Baron, 1997) but does not link to lateral authority nor need for
coordination
Our Research:
• Distinguishes between horizontal and vertical authority in practice
Many research has been done in the field of open innovation so far.
Research Questions
(notion of open innovation; business models; organizational design and boundaries of the firm;
leadership and culture, tools, technologies; IP, patenting and approproation; industrial dynamics
1. What is the most
and manufacturing; distinguishable
Fredberg et al., 2008) difference between classical innovation
networks and the concept of open innovation?
Research dilemma:
2. When
Results there
can not is openness,
been aggregated how does closeness
and compared looks
adequately like? a an overall framing is
because
lacking
3. How must an overall framework of open innovation be composed that is also
Reason:
able to include traditional concepts of collaboration and knowledge transfer?
Heterogeneity regarding the definition and understanding of open innovation
Heterogeneity regarding the operationalization of open innovation as a variable to measure
Objective
Degree of Openness
suggesting a reliable construct of open innovation
Screening Open Call
Initiation
construct is based on the understanding OI is a continuum between closeness and openness
Facet I
derive different facets of openness of an innovation process to distinguish between various
Self selection
configurations of openTask assignment
innovation Constitution
configurations explain operational models of companies (innovation processes) which can be
considered as "open innovation", but which have a different way to incorporate external input in
the innovation process
Objective
Research Approach
Sample
49 intermediaries were identified as Open Innovation Accelerators (claiming to offer
a methods/approach to accelerator an open innovation process) via internet
research
22 answered the survey
13 joined the interview
27 no return of survey – form was filled out by researcher on basis of
information from the internet (homepage, articles, blogs etc.)
4 intermediaries were excluded from analysis because of inconsistency
Listing all approaches and methods we get a total sample size of N=61
2 Openly search for solutions. There are just a few presumptions about where to find the
concrete solution and how it is maybe composed.
No direct interaction with external actors.
Commonly search takes place on the internet. Observing communities.
e.g. Netnography
Diener / Piller - User and Open Innovation Workshop - Harvard, 4th August 2008 7
Results of Analysis
Diener / Piller - User and Open Innovation Workshop - Harvard, 4th August 2008 8
Testing the relation between
- purchasing early inclusion in new
product development,
- early supplier integration and
- innovation success
in an open innovation environment
Point of departure
Research has paid less attention to the upstream part of the value chain analysing open innovation
processes
There is the assumption that firms collaborating internally are also better able to integrate external
collaborators, i. e. the probability of suppliers being included in new product development early on
increases if the purchasing department is included in product development projects (Hillebrand /
Biermans, 2004; Tracey, 2004)
The purpose of this study is to test this assumption of benefitial early purchasing inclusion empirically
h.schiele@jacobs-univers
Early purchasing inclusion in NPD leads to supplier early
inclusion which eventually leads to innovations from suppliers
Results - structural equation model
res_
puri
,00
Purchasing
inclusion
e8 e9 ,23n.s.
,77***
,32 ,91
ISUP1 ISUP2
,57 ,95
,47
,50 ,64
res_ res_
ISUP esi
CMIN/DF = 1,28 NFI = 0,902, CFI = 0,974, RMSEA = 0,51 *** = significant at 0,001 level (two tailed) ** = significant at the 0,05 level (two tailed) n.s. = not significant
Souce: Study “Purchasing and Innovation"
h.schiele@jacobs-univers
Entrepreneurship in Online Communities:
Lead User Characteristics, Agenda Shaping and Social
Standing
“I gave away sound fills and other products for free, and so it was a matter of
having fun and sharing knowledge with others in the community…everyone
was trying to find out new ways to create new features and sounds…I
noticed a lot of users in the community knew my name. So, I felt, yeah, that
there could be a business in this” (User entrepreneur and lead user in the
Propellerhead online community, Dec. 2007)
• “We're not worried about competition, really, from them. Rather, if we can,
we nurture their efforts, you know, to make sure that there's a
complete environment around our products” (CEO, Propellerhead,
2007)
• “We understood that we could not, ourselves, provide all the sounds
and applications that people would need, for the product. So we
made the Refill format, and designed it around the idea, to make it
attractive for third party…more attractive for doing third party
products than our competitors…It was an active strategic decision on
our behalf”. (Ibid.)
Managing Open Innovation
Networks: Lessons from the
Mobile Phone Industry
Joel West
College of Business, San José State University
blog.openinnovation.net
David Wood
Research, Symbian Ltd.
www.dw2-0.com
Page: 1
Research
“User and Open Innovation”
Focal Firm Suppliers Customers Rivals
Come seeintegration
more
Vertical
atX
User Innovation
User
and Firm Boundaries:
X † X
Organizing for Innovation by Users
innovation
Monday 12:20
Cumulative p.m.
innovation
X X
Anaheim Convention Center, 203B
Open
X X X X
innovation
www.JoelWest.org/AOM/2008
X = Sources of Innovation; † limited emphasis
Page: 2
Research
Our Study: Ecosystem Management
• Research says ecosystems or value networks
• Are important to value creation
• Allow coordination of the open innovation process
• Are a potential source of competitive advantage
Page: 3
Research
Case Study: Symbian Ltd.
• Makes cell phone operating systems
• Symbian OS: 65% of global smartphone market
• Founded 1998
• Spinoff of PDA maker Psion PLC
• Owned by its customers
Page: 4
Research
Conclusions
• Cognitive origins of ecosystem strategy
• For new platforms, ecosystems are conceived before they exist
• Ecosystem strategy builds on unprovable assumptions
… Assumption of what creates value
… Assumption of who creates value
• Cognitive heuristic: copy other “similar” ecosystems
• Inherent tradeoffs of ecosystem strategies
• Finite resources must be prioritized
• Hard to know what to emphasize and what to neglect
• Ecosystem control vs. supply of complements
• Codifying and disseminating information helps complementers and
competitors
Page: 5
Research
Thanks!
Page: 6
Research
Track 6: Intellectual Property (Hawes 201)
Tuesday August 5 2008 2:00 - 3:30
"Costless Brand Creation by User Communities: Implications for Producer-Owned
Brands" (Johann Füller, Innsbruck University)
"Open Sources of the Invention of the Airplane" (Peter Meyer, U.S. Bureau of Labor
Statistics)
"Do Formal Open Access Institutions Democratize Science?" (Fiona Murray, MIT)
"Managing the trade-off between revealing and appropriating in drug discovery: the
role of trusted intermediaries" (Markus Perkmann, Imperial College London)
MIT User and Open Innovation Workshop 2008 Johann Füller, Eric von Hippel
Harvard Business School, August 4 - 6, 2008
2
Outdorseiten.net - „Placing it right on the company‘s logo...“
MIT User and Open Innovation Workshop 2008 Johann Füller, Eric von Hippel
Harvard Business School, August 4 - 6, 2008
3
ODS Community – A Valuable Brand
Favorite
ODS Non-label
Brand
WTP 56,3 € 84,5 € 24,7€
Relative Price
22.55% 33.82% 9.89%
Premium
Based on a 250 Euro Backpack
R2 (Nagelkerkes) .283
Summer Summit 2005
R2 (Cox & Snell) .205
R2 (McFadden) .178
-2 log Likelihood = 188.503; χ2 = 42.639; df = 4; p=.000;
* p<0.05; ** p < 0.01; *** p<0.001
MIT User and Open Innovation Workshop 2008 Johann Füller, Eric von Hippel
Harvard Business School, August 4 - 6, 2008
4
Implications
MIT User and Open Innovation Workshop 2008 Johann Füller, Eric von Hippel
Harvard Business School, August 4 - 6, 2008
5
Open sources of the invention
of the airplane
Peter B. Meyer, U.S. Bureau of Labor Statistics*
* Findings and views are those of the author, not the Bureau
2008 User and Open Innovation Workshop, August 4-6, 2008
Maxim 33
Britain
(from US)
These people wrote and published and
were known to one another.
Lilienthal 31 Germany
Historical accounts refer to them
Penaud 22 France heavily.
Algeria, Egypt
Mouillard 21 (from France) The activity/network was international
Australia
Hargrave 19 (from Britain)
The Wrights became part of this
Moy 19 Britain network, then broke away.
Le Bris 17 France
Before 1903, fixed-wing aircraft
Langley 16 US patents exist, but don’t matter
Wenham 15 Britain
much. This ecosystem is open.
Phillips 14 Britain
Characteristics of this case
Autonomous innovators (not hierarchy, not cult)
Sharing technical info in public spaces, incl failure
Diverse backgrounds, and objectives
Want to fly!
Curious
Hope for recognition
Hope to help bring peace, or make own nation safer)
Imitation / collaboration from far away
Intellectual property mostly set aside
Role for moderator / evangelist / supporter
Micro-economic model
Imagine self-motivated tinkerers with some project
“progress” is rewarding to them in future (in utility function)
They’d use time, effort, money for experiments
Democratic on some
level, Shapin (1984)
Exchanged and accumulated has vividly described
peer-to-peer under shared norms how participation was
closely guarded & tied
& culture to being a “gentleman”
Royal Society started meeting in the mid-
Informal means to deal with 1640s to discuss the ideas of Bacon
competition, lack of reciprocity etc.
Transformation of knowledge production
necessitates emergence of formal
institutional arrangements
70%
Post-NIH sharing agreement 1.132
Boost in
citations
Article Effects Fixed After
IP sharing
Age FE, Calendar Year FE, Y Agreement
Transition Window Effects enforced
Across expert-layman
Across national boundaries:
Across industry boundaries: boundaries:
Can countries entering the global
Can firms find more effective How do different institutional
scientific community build formal &
mechanisms to exchange arrangements facilitate or limit the
informal institutional capacity for
knowledge e.g. experiment with role of non-experts in knowledge
accumulation? Do they build on
prediction markets for drug exchange e.g. patient populations
knowledge generated across the
discovery (with Peter Coles & Eric with academic or for-profit
globe e.g. analysis of China (with
Von Hippel) partners, patient advocacy e.g.
Devin Fensterheim)
www.patientslikeme.com
Managing the trade-off between
revealing and appropriating in
drug discovery: the role of trusted
intermediaries
Markus Perkmann
Tanaka Business School, Imperial College London
Abstract
More than 2
2.000
000 responses – 1.396
1 396 complete questionnaires
Descriptive Statistics:
Managerial implications
Yes, community participants pirate!
No, communities do not encourage this behavior!
No, active hackers are not the “bad guys” – adopters are worse
Piracy and Outlaw Community Innovation / Slide 8
Track 7: Open Source (Hawes 202)
Tuesday August 5 2:00 - 3:30
"How Open Source Software Design Help in Responding to the Business Needs?"
(Nassim Belbaly, Montpellier Business School)
"Open Source Software: What we know (and do not know) about motives to
contribute" (Stefan Haefliger, ETH Zurich)
"Industry Equilibrium with Open Source and Proprietary Firms" (Gaston Llanes,
Harvard Business School)
"Open Source Architecture" (Alan MacCormack, MIT)
"The Growth of an OSS Community: An Organizational Life Cycle Perspective"
(Sladjana Vujovic, Aarhus School of Business)
How Open Source Software
Design cycle
1. The Relevance Cycle inputs requirements from the contextual environment into
the research and introduces the research artifacts into environmental field
testing.
2. The Rigor Cycle provides grounding theories and methods along with domain
experience and expertise from the foundations knowledge base into the
research and adds the new knowledge generated by the research to the
growing knowledge base.
3. The central Design Cycle supports a tighter loop of research activity for the
construction and evaluation of design artifacts and processes.
Boston - 4-6th July - 2008
How Open Source Software Design help in
responding to the business needs ?
Applicable knowledge
Business needs
OSS
business
People Organizations Technology Foundations Methodologies
Phase One
Factors that motivate people to contribute to FLOSS development
Literature review
Shortcomings
Phase Two
Interrelations between motivation, contribution, and institutional arrangements
Literature review
Shortcomings
Phase Three
Alasdair MacIntyre and the role of social practice in the history of FLOSS
Motivation between social practice and institutions
Research questions for understanding motivations as a result of a social practice
Compensation
Craft motives Moral concerns
motives
Social Practice
Collective
Goods
Institutions
Gastón Llanes
August 4, 2008
Gastón Llanes (HBS) Open Source and Proprietary firms August 4, 2008 1/4
Motivation
Want to understand:
Gastón Llanes (HBS) Open Source and Proprietary firms August 4, 2008 2/4
Outline of the model
A model where:
1. Firms decide to be OS or P.
2. How much to invest in R&D, and price.
Gastón Llanes (HBS) Open Source and Proprietary firms August 4, 2008 3/4
Findings
Gastón Llanes (HBS) Open Source and Proprietary firms August 4, 2008 4/4
Open Source Architecture
Research Context
• Increasing importance of Architecture/Modularity in literature
– Industry level: Baldwin and Clark, 2000
– Firm level: Henderson and Clark, 1992; Schilling, 2000
– Product Line level: Sanderson and Uzumeri, 1995
– Project level: Thomke and Reinertson, 1998; MacCormack, 2001
Functional Organizational
Requirements Structure
Sladjana Vujovic
Department of Marketing and Statistics
4-6 August 2008 - UIC Workshop, HBS
Objective:
To examine how organizational growth affects the work
performance and coordination in OSS projects and how these
effects are dealt with.
Applied method:
A single case study based on interviews, mailing list
observations, face-to-face observations, archival documentation,
and e-mail interviews.
4-6 August 2008 - UIC Workshop, HBS
Conclusion:
Three major types of consequences following from fast growth
are identified: (i) weakness in integration of activities and tasks,
(ii) inadequacies in communication among community
contributors and subgroups, (iii) tension between autonomous
contributors and formal authority.
Implications:
Balance between authority and autonomy:
Autonomy accountability & commitment depends on:
(i) coordination of contributions
(ii) communication between the core and the periphery
Track 8: Lead User and User Innovation (Hawes 101)
Wednesday August 6 2008 11:00 - 12:30
"Process Innovation in User Firms: Promoting Innovation through Learning by Doing"
(Marcel Bogers, EPFL)
"Innovating e-Recruiting Services: An Austrian Case Study" (Elfi Ettinger, University
of Twente)
"Give Me Power and I'll Give You Love: Exploring Consumer Brand Attachment in
Mass Customization" (Ulrike Kaiser, Vienna University of Economics and Business
Administration)
"Effects of User Innovation on Industry Growth: Evidence from Japanese Steel
Refining Technology in the 1960s" (Hiroshi Ohashi, University of Tokyo)
"Do Individualized Products Deliver Benefits to Customers?"(Peter Keinz, Vienna
University of Economics and Business Administration)
"User-manufacturers, Pre-entry Experience and the Emergence of Technical
Subfields in Industrial Robotics" (Raja Roy, Tulane University)
“Process Innovation in User
Firms: Promoting Innovation
through Learning by Doing”
Marcel Bogers
PhD Candidate
Ecole Polytechnique Fédérale de Lausanne (EPFL)
College of Management of Technology (CDM)
Chair of Economics and Management of Innovation (CEMI)
• Radical and incremental innovation (e.g., Hollander, 1965; Riggs & von Hippel, 1994; Rosenberg,
1982; von Hippel, 1976)
• Many improvements from (deliberate) learning by doing (Argote, 1999; Dutton &
Thomas, 1984; Hatch & Mowery, 1998; Pisano, 1997; von Hippel & Tyre, 1995)
• Innovation-promoting practices (cf. Garvin, 1993; Laursen & Foss, 2003; Leonard-Barton, 1992;
Scott & Bruce, 1994; Subramaniam & Youndt, 2005)
• Research question:
– What are the firm-level capabilities and practices that promote innovation
in user firms and what is the role of learning by doing?
(What drives learning by doing and thereby process innovation?)
– Monitoring and support (Baron & Kreps, 1999; Garvin, 1993; Leonard-Barton,
1992)
– Incentives and rewards (Amabile, 1996; Baron & Kreps, 1999; Deci & Ryan,
1985; Edmondson, 1999; Ichniowski et al., 1997; Lee et al., 2004; Milgrom & Roberts, 1992)
• Managerial implications:
– Delicate balance of practices
– Long-term strategy
8/8/2008 1
Project
8/8/2008 2
User Innovations…
…easy to realize
in the rather
conservative HR/
recruiting branch?
Integrating?
•Playfulness,
Identification &
Commitment in
communities
•Serious hiring in e-
recruiting
•Slow business
networks
8/8/2008 3
The many problems
Large numbers of e-recruiting platforms fail…
– Job crawler
– Up-to date profiles
– Matching
– Skill Ontology
– Wiki learning systems
– Responsiveness & speed of applicant pools
– Clicks compared to competitors
– Relevant applications
– Push services
– Service, Information & System Quality varies
8/8/2008 4
Preliminary Findings
8/8/2008 5
Some Innovations
8/8/2008 6
Implications
• Niche providers need to stay in close touch with their users to sense shifting
needs of their most wanted and most innovative users (lead users).
• Educational ties seem to offer the foundation for continued online interaction in
(at least) the engineering career portal.
• System designers are challenged to create private (for friends) and public (for
recruiters) spaces.
• Future belongs to those providers that best understand users shared social
identity and succeed in providing semantic technologies so as to enhance users‘
online experiences (e.g. enhance applicants self esteem).
8/8/2008 7
Give me power and I‘ll give you love:
exploring consumers’ company attachment in
mass customization
Ulrike Kaiser and Martin Schreier
WU Vienna University of Economics and Business
Research Question
Will customers of MC forge stronger attachments to the underlying company than
customers of standard products? If yes, why is that so? And what are the
implications for a MC firm?
Customer Behavioural
Integration Company Outcomes (WTP for
Attachment
(MC vs. Non-MC) H1 (+) H2 (+) brand extension)
Argument 1: Preference fit Argument 2: Customer Empowerment
• MC products deliver superior customer • Personal accomplishments are achieved
value because the customer gets exactly by satisfying the need for autonomy and
what s/he wants. (Addis and Holbrook 2001;Pine competence. (Dahl and Moreau 2007)
1999; von Hippel 2001; Wind and Mahajan 1997)
• Relational inputs that make a person feel
• As a result, customers are locked into autonomous and competent promote
long-term, strong relationships. (Peppers stronger attachments. (Ryan and Deci 2000;
and Rogers 1997; Pine, Peppers, and Rogers 1995) Thomson 2006)
© User Innovation Research Initiative Vienna (www.userinnovation.at) 3
Overview of Empirical Studies (II)
We explore the customer-manufacturer relationship in three empirical studies.
Experiment with mymuesli.com (n=130)
• Customers of MC form stronger attachments to the company
Study 1
Tsuyoshi Nakamura
Tokyo Keizai Univ.
Hiroshi Ohashi
Univ. of Tokyo
1
Basic Oxygen Furnace as Process Innovation
Scrap
Open Hearth
(OHF)
MHL
OG system
5
Summary of the paper
• The user innovations by the Japanese contributed to
approximately 40 % of the productivity growth in the
Japanese steel industry.
• Without the user innovations, the industry growth
would have been much slower than what we actually
observed.
• Lead user gained revenues from its user innovations
by the magnitude of more than 20 % greater than the
company with the second highest revenue.
6
Thank you for your attention
7
Do Individualized Products Deliver Higher Benefits than
Standard Products?
- Providing customers with exactly what they want leads to substantial economic
benefits as individualized products usually better fit the customers’ needs
Peppers & Rogers 1997, Pine 1995, von Hippel & Katz 2002
Empirical evidence:
- Integrating users in the new product development process by a toolkit for user
innovation and design helps to reduce R&D effort and to increase sales
Thomke & von Hippel 2002
- Users are more satisfied with self-designed, individualized products and therefore
willing to pay up to 100% more than for comparable standard products
Dellaert and Stremersch 2005, Franke and Piller 2004, Randall, Terwiesch and Ulrich 2007, Schreier 2006
But: The merits of individualization are frequently
questioned by marketing
Traditional marketing questions the customers’ ability to provide precise information
on what they want.
As customers often
What customers really
- do not know their real preferences and/or
would have wanted…
- are unable to express their real
preferences properly and/or
Research questions:
Are products individualized on the basis of expressed preferences more beneficial to
customers than standard and segment-specific products?
Which factors influence whether customers derive benefits from individualization or not?
Hypotheses:
Level of
individualization H1 (+)
Perceived benefit
(based on measured
preferences)
Findings:
Level of
individualization H1 (+) Perceived benefit
(based on measured
preferences)
Implications:
- Individualization seems to be a more promising strategy than segmentation –
even if it is based on expressed preferences
- What about
product involvement?
Study II
generalizeabiltiy?
Existing
technological
capabilities can
act as barriers to
change
Existing
technological
capabilities can
act as triggers for
exploratory
search
Proximity to customers:
Tension in the literature
Christensen View:
• Customers entrap
firms into local
search: good for
sustaining innovation
I II
Enhancing
III IV
Destroying
• Important findings:
– UMs with prior experience develop products with better values of emerging performance criterion.
– UMs with prior experience develop products with inferior values of existing performance criterion.
• Implications:
– We extend user-innovation literature into the realm of UM.
– Having in-house customers and prior technological competence gives the firm a competitive advantage.
Track 9: Open Innovation (Hawes 102)
Wednesday August 6 11:00 - 12:30
"Managing Proprietary and Shared Platforms" (Tom Eisenmann, Harvard Business
School)
"Two Specific Factors that Determine Cooperation with Users: Sticky Information and
Heterogeneous Needs" (Gloria Sánchez-González, University of León)
"Cooperative Resource Exchange & Value Creation Through Open Technology
Platforms" (Sonali Shah, University of Washington)
"Innovation, Openness, and Platform Control" (Marshall Van Alstyne, Brown
University & MIT)
"Motivating Firm-Sponsored e-Collective Work" (Andrei Villarroel, EPFL)
Managing Proprietary
and Shared Platforms
HBS - MIT User and Open Innovation Workshop
Tom Eisenmann
Harvard Business School
August 6, 2008
Platform Architect’s Choice:
Proprietary or Shared Design?
• Preserve proprietary control of new platform,
e.g., Google, iPhone, Xbox?
Or…
• Share platform with rivals who offer compatible
but differentiated versions of platform, e.g.,
Android O/S, barcodes, DVD?
– Compatibility = low switching costs = price pressure
– Tension: cooperation and competition
– “Shared” ~ “Open” (definitions to follow…)
1
Outcomes Vary
• Proprietary platforms may prevail
– Akamai vs. Content Bridge
– eBay vs. FairMarket
User A User B
Platform
Components Rules
- Hardware - Standards
- Software - Protocols
- Services - Policies
- Contracts
Architecture
3
Large and Growing Share of Global Economy
• Not just information industries, also:
– Financial services, e.g., ATMs, credit cards, securities exchanges
– Transportation, e.g., package delivery, airlines, reservation systems,
fuel-cell cars, container shipping
– Retail, e.g., shopping centers, bar codes/RFID
– Energy, e.g., grid + appliances, energy trading
– Real estate, e.g., home buying
– Health care, e.g., HMOs
– Enterprise administration, e.g., headhunters, trade shows
– Personal relationships, e.g., nightclubs, marriage brokers, brothels
8
WTA Potential?
Yes No
Proprietary Favored Proprietary Favored
•Proprietary examples: •Proprietary examples:
Yes PayPal, Yellow Pages in video games, paid search
smaller cities •Coexistence examples:
Free •Shared examples: WWW, NYSE/ECNs; credit cards
Rider real estate MLS
Issue? Shared Favored Coexistence Common
•Shared examples: DVD, •Coexistence examples:
No fax, barcodes, Wi-Fi, SMS Symbian + Blackberry;
Linux + Mac
9
Missing from framework: When does
shared approach yield superior platform?
• Positive factors • Negative factors
– Multiple parties = greater – Delays due to politics
collective R&D effort and coordination
– Darwinian pressure to processes
incorporate best – Modular design forfeits
technologies opportunities for tight
– Regular user feedback integration (as with
and input throughout iPod/iTunes)
design cycle, not just in – Least common
alpha/beta denominator design to
– Specifying module ensure support of less
interfaces avoids skilled parties
“spaghetti code” – Vested interests may
obstruct innovation
10
HBS-MIT User and Open Innovation Workshop August 4-6, 2008
Universidad de León
Index
Objective
Theoretical background
Empirical model
Objective
Theoretical background
Empirical model
Sticky Information
Heterogeneous Needs
Theoretical background
STICKY INFORMATION
USERS
INFORMATION
COOOPERATION
ASYMMETRIES
Sticky information of technical nature
(von Hippel, 1994,
1995, 1998, 2001b;
MANUFACTURER von Hippel y Katz,
2002; Thomke y von
Hippel, 2002)
Theoretical background
Sticky Information
Heterogeneous Needs
Theoretical background
HETEROGENEITY OF NEEDS
Hypothesis
HYPOTHESIS 1
If information on needs is sticky, the cooperation between the manufacturer firm
and its users for the development of innovations will be more likely
HYPOTHESIS 2
If the information regarding problem solution is sticky, the cooperation between
the manufacturer firm and its users for the development of innovations will be
more likely
HYPOTHESIS 3
The greater the heterogeneity in market needs, the greater will be the need to
cooperate with users for the development of innovations
Index
Objective
Theoretical background
Empirical model
STICKY H1 (+)
INFORMATION ON
NEEDS
COOPERATION
WITH USERS
TECHNOLOGICAL
STICKY
INFORMATION H2 (+)
HETEROGENEOUS
NEEDS H3 (+)
Objective
Theoretical background
Empirical model
Universidad de León
Cooperative Resource Exchange & Value Creation
Through Open Technology Platforms
Sonali Shah
Patrick Wagstrom
Jim Herbsleb
THE OBSERVATION
Presented at User and Open Innovation Workshop, HBS, Boston, August 6, 2008
“e-collective work” refers to Complexity
Problem
Amazon
Mechanical
Turk
Online Communities:
Teams: small, local, internal
large, distributed, external
Motivating firm-sponsored
e-Collective Work
Andrei Villarroel & Christopher Tucci
College of Management of Technology, EPFL
Switzerland
Presented at User and Open Innovation Workshop, HBS, Boston, August 6, 2008
Track 10: Intellectual Property (Hawes 201)
Wednesday August 6 11:00 - 12:30
"Design for Appropriability – Modularity Induced by Intellectual Property" (Joachim
Henkel, Technical University of Munich)
"Collective Invention in History and Theory" (Alessandro Nuvolari, Eindhoven
University of Technology)
"Sharing Research Tools and Materials: Homo Scientificus and User Innovator
Community Norms" (Katherine Strandburg, DePaul University College of Law)
"Patents and Regress in the Useful Arts" (Andrew Torrance, University of Kansas
School of Law)
Technische Universität München
Counter-Strike
Valve Software modularized the code of its PC game Half-Life:
core
complementing code,
engine,
publicly available,
pro-
modifications allowed
prietary
* Source: For the history of Counter-Strike see Jeppesen, “Profiting from innovative user communities”, 2004
core
complementing code
engine
• Same value creation would have been possible with revealing the entire
code base
• BUT: value appropriation severely hampered
IP Modularity: Categories
IP status
certain uncertain
flexibility to
“outgoing,” own IP; specification
adjust IP
IP status of modules of IP status of
status; option
TYPE OF can be specified own artifact
value
IP MODULA-
RIZATION
flexibility to
“incoming,” external IP; avoid
react to
IP status of modules foreseeable
inadvertent
externally given hold-up
infringement
Propositions (tentative…)
Relevance
Uncertainty of IPRs
Unpredictability
about of environment
existing IPRs
Opportunities for
Extent of
distributed value
distributedness Prevalence of creation down-
of value creation reactive | proactive stream (incl.
upstream IP modularization outsourcing)
Complexity of Importance of
technology standards and
compatibility
Heterogeneity
of needs
downstream
All arrows indicate positive effects
Alessandro Nuvolari
Eindhoven University of
Technology, the Netherlands
Collective invention (Allen, 1983)
Innovation based on knowledge sharing
among competing actors
Innovation without patent protection (or
very liberal use of patents)
Two additional features:
Knowledge sharing seems to be based on self-
organization rather than design
Remarkable innovative performance
Collective Invention (Allen, 1983)
Examples of such cases [of collective
invention] are not many and they required
rather special circumstances that were not
common and collective invention in its
most extreme form, to judge from its
short lifespans, was vulnerable and
ephemeral
(Mokyr, 2008)
The historical significance of
collective invention
Cleveland blast furnaces (Allen, 1983)
Cornish steam engines (Nuvolari, 2004)
London clock-makers (MacLeod, 1988)
Lyon silk industry (Foray & Perez, 2005)
Berkshire paper-making (McGaw, 1987)
Western steam-boat (Hunter, 1949)
Viennese chairs (Kyriazidou & Pesendorfer, 1999)
Japanese cotton spinning (Saxonhouse, 1974)
Norwegian brewing industry (Aanstad, ongoing)
“Black” bottles for champagne (Belhoste, ongoing)
User Innovation and Patent
Doctrine
Katherine J. Strandburg
DePaul University College of Law
Visiting Fordham Law School Fall 2008
Motivation for this Project
Patent doctrine implicitly assumes a “seller
innovator” whose primary motivation is
commercial sale – sellers/manufacturers
invent, users consume BUT
Increasing importance of user innovation and
open and collaborative innovation
- Open source, digital mechanisms for innovation
Increasing overlap and interaction between
knowledge production systems
- Expansion of IP subject matter, e.g. basic
science, business methods
- Globalization, e.g. traditional knowledge
PATENT BALANCE
Patents are intended to provide:
Incentive to invent (for self-disclosing
inventions)
- by providing opportunity to recoup
investment through exclusivity
Incentive to disclose (for non-self-disclosing
inventions)
- by providing longer period of exclusivity cf.
trade secrecy (and hence higher returns)
Incentive to disseminate
- by facilitating licensing and deterring free
riding competitors
PATENT BALANCE
Patents Balance:
incentives to invent, disclose, and
disseminate inventions
VS
increased prices, reduced follow-on
innovation
• Successfully simulate
patent systems
• Collect and analyze all
data generated by users
• Test specific
hypotheses about
patent, open source, and
commons systems
Do they spur innovation?
Do outcomes vary with
specific parameters?
What is the optimal
system for innovation?
THE PATENT GAME
DATA OF INTEREST
• Innovation
Total number of
unique inventions
created
• Productivity
Total number of
inventions made
• Social utility
Per capita ($) amount
of wealth generated
INNOVATION
120
Unique Inventions
100
80
60
40
20
0
Pure Patent Patent/Open Source Pure Commons
System Type
PRODUCTIVITY
700
600
Total Inventions
500
400
300
200
100
0
Pure Patent Patent/Open Source Pure Commons
System Type
SOCIAL UTILITY
45000
Per Capita Wealth ($)
40000
35000
30000
25000
20000
15000
10000
5000
0
Pure Patent Patent/Open Source Pure Commons
System Type
RESULTS
• Innovation*
Significantly more (p<0.05)
unique inventions are created in
the pure commons (103.4) than
in the patent/open source
system (76.8)
• Productivity*
Significantly more (p<0.001)
total inventions are made and
sold in the pure commons
(658.6) than in the patent/open
source system (322.8)
• Societal Utility*
Significantly more (p<0.002) per
capita wealth is generated in the
pure commons ($41 233.3) than
in the patent/open source
system ($10 208.6)
• *Pure patent and patent/open source
systems not significantly different
RESEARCH PROJECTS
Hind Benbya
GSCM-Montpellier Business School, France
OSS: From a “Movement” to a commercial product
Time 70s
Hacker culture Ideology Social motives Private motives Economic motives
Characterizing Motivation Studies in OSS
Social Individual
Ideology Career benefits
• Stallman (1999) • Lerner and Tirole (2002)
• Stewart and Gosain (2006)
Enjoyment-based
Reciprocity • Lakhani and Wolf (2003)
• Raymond, (1999), (2001) • Hars and Ou (2002)
Theoretical bases
Behavior
Learning orientation H1 Learning outcomes
H8 a Replication
Involvement Attitude
Performance orientation H2 H8 b Adaptation
H6 H7
H8 c Innovation
Participation
Social Incentives
Satisfaction Level
H9 a Team
Reputation H3
H9 b Project
Salary
Reciprocity H4
1
Crowdsourcing: THE future business model?
generate innovation
outsource sell
innovation products
user
company (mass)
user user
market
user
submit ideas,
concepts…
Arguments in favor
• “Knowledge required is inherently decentralized” (Hayek 1944)
• Linus„ Law: “given enough eyeballs, all bugs are shallow“ (Raymond 1999)
leverage the broadly distributed creative potential (Lakhani and Panetta 2007)
improve NPD performance, i.e. fit with market needs / faster time to
market (Prandelli, Verona and Raccagni 2006) and reduce market failures (Ogawa and
Piller 2006) 8
But things are not that easy…
• “There’s still a lot we don’t know about why Crowdsourcing works (and why
on some occasions, it simply doesn’t), but what’s clear is that people are
far more complexly motivated than we once imagined” (Jeff P. Howe)
9
Method
Pilot studies
• 8 Crowdsourcing communities
Quantitative experiment
10
Findings
The architecture of the business model clearly influcences user perceptions. Self-
interest AND fairness perceptions impact the users’ intention to submit innovations.
leaduserness
n = 734
11
Global Fit-Measures: χ²-Wert = 450.52; df =157; p = 0.000; χ²/df = 2.87; GFI =
0.94; AGFI = 0.92; CFI = 0.97; IFI = 0.97; TLI = 0.97; RMSEA = 0.05 No moderator effect
Discussion
12
Why and how do people share what they know?
Oded Nov
Polytechnic Institute of NYU
• Why, how and where do people share [photos, factual
information, meta-information and code] with people they
don’t know?
• Can we quantify the drivers for contribution and their
effect on actual behavior?
Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
Background: online communities
Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
Overview of research program
Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
Overview of research program
Context of sharing
(where)
Drivers of sharing
(why) Type of information Open source software
shared (what) development
Motivations: intrinsic (Volunteering)
(e.g. fun) to extrinsic Code
(e.g. money) Wikipedia
Content/facts
Structural properties Flickr
Meta-information
Personality (e.g. (tags) etc
personal values)
Photos
Privacy concerns
etc
etc
Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
Overview of research program
Type of information Context of
Drivers of sharing (why)
shared (what) sharing (where)
Open source
Motivations: intrinsic (e.g.
software
fun) to extrinsic (e.g. Code
development
reputation building)
(Volunteering)
enjoyment- Enjoyment
based intrinsic
Lakhani & Wolf, 2005
motivations
community- Commitment to
based intrinsic the community
motivations
extrinsic Self Photo sharing
motivations development
Structural
McLure-Wasko & Faraj,
Structural: Degree
centrality
Control: Tenure
Control
in community
2005
Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
LEAD USERS AS FACILITATORS OF
KNOWLEDGE SHARING IN AN ONLINE
USER COMMUNITY
Lars Bo Jeppesen
Rationale:
In low rivalry settings, ‘who are able’ to contribute matter more than ‘who are
motivated’ to contribute.
Why should I share?
The better the match, the lower the cost of answering and, other
things being equal, the higher the likelihood of a contribution being
made.
H1 (+)
Lead User
Innovator
Controls
Setting and Data
Implication(s)
Extended Schools
Policy
(“Every child matters”)
“We‟ve these things called community hub statements, the school is the hub
and then you‟ve spokes coming up. We look to wider context of needs and
where there isn‟t good accommodation anywhere, and then say these things
(sports, adult learning, nursery facilities) could be accommodated in the
school, and that [amount of space and configuration] becomes a pressure
on design” (Manchester BSF programme administrator 2008)
“Open”
The project is funded by the Danish KINO (Creativity and Innovation, New
Production Forms and the Experience Economy ) research council under the
Ministry of Science, Technology, and Innovation.
Project Partners:
Roskilde University: the interdisciplinary
research group Communication Forms and
Knowledge Production
http://worlds.ruc.dk
Thank you for your attention
EMOTIO: Embedded Open
Toolkits for User Innovation and
Co-Design – Exploration of a
New Research Area and
Feasibility Study
1
Our idea: "Postponing into the user": A new
paradigm to reduce the NPD risk and increase NPD efficiency
2
"Postponing into the user" demands a new set of
capabilities and resources
Embedded toolkits for user innovation and co-design to equip users with
the possible solution capabilities to substitute the lack of professional training
and experience
Extending existing research about conventional toolkits in ETO/CFO markets
(Dahan & Hauser 2002; Franke & Piller 2003, 2004; Franke & von Hippel 2003; Piller
2006; von Hippel & Katz 2002).
Idea to create open toolkits and corresponding solution spaces, while remaining
product may be closed (Henkel et al. 2007)
Users can determine with higher confidence which options solves need best;
encourages to investigating potential choices outside current frame of
reference.
Feeding information back to manufacturer can enhance its ability to access
and process new (need) information
3
User Innovation Beyond Market Barriers
The Case of Machinima
HBS/MIT 2008
Model of Horizontal User Innovation
1 Domain 2
User community
knowledge
6a
Horizontal User
Learning
Innovation
Preference 3 Complementary 4 6b
towards revealing assets
Tolerance towards
5
exploitation
HBS/MIT User Innovation Workshop – August, 2008 Georg von Krogh | Stefan Haefliger | Peter Jäger 2
Results
Learning & Exploitation ‣ Prop. 5: neither confirmed nor rejected – Prop. 6a & 6b: confirmed
Feedback learning crucial for horizontal user innovation (release management, community
building, live screenings)
Experimental approach to horizontal user innovation both in terms of products and business
models. Accumulated experience and the shared gaming culture with the audience provided
a source for new ideas
HBS/MIT User Innovation Workshop – August, 2008 Georg von Krogh | Stefan Haefliger | Peter Jäger 3
Discussion
Two phases of horizontal user innovation: distribution under the radar and then
commercialization (see Porter, 1980; Liebermann, 1987)
Due to free revealing by incumbents, virtual worlds can act as a breeding ground for user
innovation (see Ghemwat and Spence, 1985)
Users learn by obtaining feedback from their community of Machinimators and from their
audience (see Lakhani and von Hippel, 2003; von Hippel, 2007)
Users apply effectuation learning to their ventures: selecting between possible effects given
a set of means (skills, network, etc.) (see Wiltbank, 2006)
HBS/MIT User Innovation Workshop – August, 2008 Georg von Krogh | Stefan Haefliger | Peter Jäger 4
Discussion
HBS/MIT User Innovation Workshop – August, 2008 Georg von Krogh | Stefan Haefliger | Peter Jäger 5
User Innovation and The Regulated
Medical Imaging Device Industry :
A Swiss and US perspective
Research plan:
Start : October 2007
End : October 2010
Why imaging medical devices?
Already recognized by health care economists that there are two knowledge
production patterns in medical devices or medical practices:
• Formal research by researchers: clinical trials funded by R&D budgets
• “On line” research and innovation: not measured but included in health care
costs
+ two interesting features: medical device market is large and their use homogenous
© Marion Pötz
Research Design
When solving innovation-related problems, organizations can either rely on their
internal R&D departments or search for ideas outside their boundaries
Problem OR
© Marion Pötz
Research Design
Outside an organization, potential solutions to innovation-related problems can be
found within different distributed sources
OT
Low
Distance
Target Industry
IT Medium
Distance
High
Near Analogous Industries Distance
IAN
© Marion Pötz
Research Design & Findings
Ideas from outside an organization are more novel than those from inside
OT
Target Industry
IT Dependent Variable: Novelty of Ideasa
Independet Variables B Std. Error
Inside vs. Outsideb 0,450** 0,235
Near Analogous Industries Quality of Idea Descriptiona 0,388*** 0,156
Linear Regression, F-value=3,597**, R=0,044, R2=0,032, n=159
IAN a 5-point rating scales (1=low, 5=high)
b 0=Inside, 1=Outside
© Marion Pötz
Research Design & Findings
Within the target industry, ideas from outsiders (users) are more novel than those from
the internal R&D department
OT
Target Industry
IT
OT I T* IAN* IAF*
(n=51) (n=52) n=(25) (n=31)
Dimension Mean (SD) Mean (SD) Mean (SD) Mean (SD)
Near Analogous Industries Novelty 2,12 (1,14) 2,60 (1,27) 1,76 (1,27) 2,35 (1,45)
IAN p<0,05 p<0,05
ANOVA, F=2,783**, n=159
© Marion Pötz
Research Design & Findings
Within analogous industries, far analogous industries are capable of providing more
novel ideas than near analogous industries
OT
Target Industry
IT
OT I T* IAN* IAF*
(n=51) (n=52) n=(25) (n=31)
Dimension Mean (SD) Mean (SD) Mean (SD) Mean (SD)
Near Analogous Industries Novelty 2,12 (1,14) 2,60 (1,27) 1,76 (1,27) 2,35 (1,45)
IAN p<0,05 p<0,05
ANOVA, F=2,783**, n=159
© Marion Pötz
Research Updates (R2)
Monday Aug. 4 11:00 - 12:30
• Research Question:
– How do consumers (ie users) understand the
value in a new technology?
– Implying further questions for analysis:
• What is value?
• How does value work – the process of value?
• How does value stabilise?
• If stable, how does value de-stabilise?
User and Open
Innovation
Key Findings Workshop
4-6 August ‘08
• 12 dimensions of value
– Unlimited value elements, within and value element
combinations
– Four universal: price, function, time, service/reliability
– Four social: need, duty, power, community
– Four indiv: beauty, emotion, learning, simplicity
• Process of value: includes social net, action,
attitude, consumer/innovator strategy, context
• Value strategies: explore, filter, copy, close
• Value properties: dynamic, degrades, iterating
User and Open
Innovation
Key Implications Workshop
4-6 August ‘08
Fred Gault
IRDC and OECD Innovation Strategy Team
Member, Responsible for Indicators and
Developing Countries
AMT users in
category (%)
46% 26% 28%
1
Our idea: “Differentiation in Commodity Markets”: how to integrate
users in the design of commodities
Mass customization, i.e. integrating users into the design of their products
via toolkits, may offer new opportunities for a differentiation strategy in
commodity markets
At the same time, studying such an extreme case of user co-design may
reveal new insight into utility of user co-design
Are users attracted by the possibility to customize commodities such as
electricity (petroleum and home electricity)?
If so, does this lead to an increase of consumers’ willingness-to-pay /
willingness-to-switch to a new provider / satisfaction with an existing
provider (loyalty)? What is the optimal extent of customization?
Experimental study with a user co-design toolkit:
Users can “customize” a custom electricity by bundling different
sources of primary energy
Replication of a real case by German EON company
2
Conceptual Framework (Study 2 / 4)
Extent of
Customization
• Purchase Intention
Service (WTP)
Locus of Control • Decision satisfaction
• Switching intention
Default
Configuration
Covariates:
• Environmental
Consciousness
• Need for Uniqueness
• Loyalty / Switching
costs
Design:
2 (extent of customization high vs low) * 2 (default configuration base vs neutral) *
2 (product categories power vs gas) between subjects
3
Case: Home electricity
4
Expansion of Collective Innovation
to Customer Support Services
Lack of
Reference Data
The PC maker
Lack of Product The printer maker
Knowledge
Printer error
Lack of Authority
Facts:
3, 000, 000 users exchange solutions monthly.
OEMhave been answered to date.
15, 500, 000 questions
Major Portal Sites
e.g. MSN Japan, Goo by NTT
1 Ambiguous Questions
are asked in everyday words, not technical terms.
2 Practical Experiences
Features are exchanged between various types of users.
of
Q&A Sites
3 Wide Range of Issues
are covered from PC matters to personal affairs.
4 Friendly Communities
accommodate all levels of users.
Dias 1
Pradeep Divakaran
Aarhus School of Business, Denmark.
Pradeep Divakaran
Innovation Management
User and Open InnovationGroup
Workshop
August 4-6, 2008.
Harvard Business School.
Dias 2
Exploring how user communities facilitate
entrepreneurial processes
User community
Pradeep Divakaran
Example: To what degree
Innovation Management Group
Example: In what ways Example: How does the
does collaborative filtering
do user communities help collective development of
serve as a valid test market
identifying entrepreneurial solutions goes along with
for new products,concepts
opportunities? private commercialization?
or ideas?
Dias 3
Opportunity exploitation
Pradeep Divakaran
• What is the response time of community members giving feedback to a specific idea?
Innovation Management Group
• What is the number of members giving feedback to a specific idea?
• What is the length and nature of the feedback?
• What is the social network position (core vs. periphery) of community members giving
feedback to a specific idea?
Dias 4
Pradeep Divakaran
Potential variables to look at:
• Innovation
Number of community Management
members Group
• Social network structure of the community. Ex. Network density
• Governance structure of the community. Ex. Purpose of community, rules and norms.
Dias 5
Pradeep Divakaran
Innovation Management Group
Biobricks
Nanotechnology
Hirendra Vikram August 4, 2008
Research Questions
hivi@asb.dk
Christopher Lettl
Research Updates (R3)
Tuesday August 5 2008 9:00 - 10:30
"Internal Capabilities for User/Open Innovation" (Dennis Hilgers, RWTH Aachen
University)
"The Accuracy of Information Markets for the Evaluation of New Product
Development Ideas" (Gerrit Kamp, Stevens Institute of Technology)
"Lifecycles of Participation in Online Communities" (Cliff Lampe, Michigan State
University)
"Competitive Dynamics between Developers on Facebook’s Platform for Applications"
(Philip Mayrhofer, LMU Munich)
Dennis Hilgers
Although firms are getting better using methods of open innovation, they still
have problems to absorb and transfer the obtained information efficiently.
2
Improving the internal capabilities for open innovation
The idea is to develop an integrated management approach enabling firms
to better transfer & exploit knowledge from external contributors (with a
special focus on users). Our model is focused on ...
Information structures (e.g. direct and multilateral communication via
toolkits and platforms)
Information
Markets
Idea entry
restrictions
Number of
participants
Extrinsic Accessible
incentives information per
Trading idea
experience
Department of
Telecommunication, Lifecycles of Participation in
Information Studies and Media
Online Communities
Michigan State University
lampecli@msu.edu
Research Question
• Online communities persist over time.
– How does participation change?
– How do people decide to leave?
Started in 1999 as an
offshoot of Slashdot
~ 150k unique IPs / day
User-generated encyclopedia
• sort of
QuickTime™ and a
decompressor
are needed to see this picture.
Questions about E2
• What are the patterns of exit from E2?
– How many people leave immediately?
– What are the other participation measures of users
who leave?
• Votes, cools, messages
• Fled Users
– Users who created an account, but never logged in,
no activity
• 47% (79,725 / 169,531)
• lampecli@msu.edu
Philip Mayrhofer
(mayrhofer@cdtm.de)
Motivation
• Trend towards modularization and platforms, particularly in digital markets
• Examples: Google AppEngine, Amazon Web Services, iphone, Firefox, game
consoles, social networks (Facebook, OpenSocial)
Research Gap
• Competition between modules/add-ons
• Impact of (perception of) competition on incentive to participate in platforms
HBS-MIT User and Open Innovation Workshop / 05-AUG-08 Slide -2- P. Mayrhofer
Research Questions
Selection – Current Work in Progress
Question 1:
• Do pioneers sustain their leadership position? Do they take all?
Question 2:
• Are their positive spill-over effects between applications of one developer?
Integrative:
• How do users/hobbyists do compared to manufacturers/professionals?
HBS-MIT User and Open Innovation Workshop / 05-AUG-08 Slide -3- P. Mayrhofer
Data – Facebook Platform for Applications
HBS-MIT User and Open Innovation Workshop / 05-AUG-08 Slide -4- P. Mayrhofer
Contact
Please contact me if you have questions, ideas, suggestions!
Open Issues
• Market definition and categorization
• Developer and user characteristics
• Econometric model for pioneering study
HBS-MIT User and Open Innovation Workshop / 05-AUG-08 Slide -5- P. Mayrhofer
Open Innovation
within the Firm
The relationship between absorptive capacity* and its antecedents, i.e. the
types of innovators involved, is different for differentiator and price
seeker.
• Defined as social integration mechanisms and power relationships (Todorova, & Durisin, 2007)
Neyer, & Doll, 2008 3
Open–I: Open innovation within the firm
What role do social support software tools play to foster the engagement
in open innovation within the firm?
SARAH M. G. OTNER
5 AUGUST, 2008
DISSERTATION SITUATION:
Purpose
• To produce a new theory of and a new practice of
management
• To discover a new understanding of what
motivates individuals to perform in
situations where group performance is
judged
• To identify a new understanding of what
motivates individuals to solve others’ problems
• To make an original contribution to the
psychological theories of motivation and
attribution
DISSERTATION SITUATION:
Theory
• Aims to deliver a Theory of Credit analogous to
the existing Theory of Blame
Select designs
Aesthetic and
Comfortable
Openness as an Alternate IP Strategy Alexy, Lakhani UOIW, Boston, MA, August 4-6
Research Questions
• Why do they do so in the first place, i.e., why do they start being open?
Openness as an Alternate IP Strategy Alexy, Lakhani UOIW, Boston, MA, August 4-6
Which users drive shifts in
preferences causing creation or
diffusion of innovation?
HBS-MIT User and Open Innovation Workshop
August 4-6, 2008
• Fall 1995: Manhattan designers wanted Hush Puppies for their shows;
430,000 pairs of the classic Hush Puppies sold
• 1996: 1.75 mio. pairs sold; Prize for best accessory at Council of Fashion
Designers awards
• Geoffrey B. Bloom (company president): ”… award for an achievement that the
company had almost nothing to do with…”
• Analyze the impact of diverse types of network ties on the diffusion of a fashion
innovation
• Identify the social mechanisms and dynamics within a social network and
understand how they drive popularity
• Gain more insight into how trends evolve and how people affect each others’ and
preferences and each others’ behavior.
Research strategy
• Interviews for exploratory study, to identify different user types and
characteristics
• Network survey to collect social network data
• Unit of analysis is the relationship between individuals
What are the key types of relationships?
Are there patterns of relationships that characterize key roles of
individuals?
SOCIAL STRUCTURE OF COLLABORATION
Andreea D. Gorbatai
Mikołaj Jan Piskorski
Harvard Business School
RESEARCH QUESTION
Fundamental trade-off
Small contributions instead of large commitments
Mistakes are easier to spot and correct
No power structure to stop you from contributing
But… everyone can edit you out leading to departures
Findings + Implications
Found statistically significant support for both our hypotheses
Tight collaboration with similar others reduces the costs of
collective work.
The Role of Knowledge Heterogeneity and Motivation in Open
Innovation Communities
Christian Lüthje
Karsten Frey
Simon Haag
The Role of Knowledge Heterogeneity and Motivation in Open Innovation Communities
Christian Lüthje / Karsten Frey / Simon Haag | 2008 International User and Open Innovation Workshop 2
The Role of Knowledge Heterogeneity and Motivation in Open Innovation Communities
Data collection:
Online questionnaire to community members
User profile
Server log-files
Data analysis:
Partial least squares regression analysis (PLS)
Christian Lüthje / Karsten Frey / Simon Haag | 2008 International User and Open Innovation Workshop 3
The Role of Knowledge Heterogeneity and Motivation in Open Innovation Communities
Preliminary Findings
Knowledge
Heterogeneity
0.77*** Level of
Financial
Activity Level Monetary
Incentive
Reward
Self
Affirmation
Christian Lüthje / Karsten Frey / Simon Haag | 2008 International User and Open Innovation Workshop 4
The Role of Knowledge Heterogeneity and Motivation in Open Innovation Communities
The posted projects should challenge the innovators to prove their skills
and creativity in order to achieve the desired self affirmation.
Christian Lüthje / Karsten Frey / Simon Haag | 2008 International User and Open Innovation Workshop 5
Using Network Visualization to
Understand Participation on
SourceForge.net
Nate Oostendorp
Site Architect
SourceForge Inc
Topics of interest
• What are the differences in
participation between members & non-
members of projects in the SF
network?
• Do these participation patterns enable
us to identify meaningful communities
in SF?
Representing Clusters
Visually
• Even small clusters can have large
numbers of users
• Edge is the key data element
• Blue for member participations
• Yellow for nonmember participations
• Edge width proportional to weight
Pretty Pictures: Zope/Plone Projects
Victoria Stodden
Berkman Center for Internet and Society
Harvard University
August 5, 2008
Computational Science
• Becoming more pervasive as a
research methodology - across and
within fields
• Research work increasingly freely
revealed in a fully reproducible way -
facilitating greater innovation
Research Agenda
• Characterize the types of problems that lend
themselves to reproducible research
• Uncover why contributors reveal research to
the commons
• Seed a commons where conditions are right -
“infant commons”
• Do citizens engage when the research is
reproducible?
User-Innovation – Barriers to Democratisation and IP Licensing
Book Presentation:
User-Innovation -
Barriers to Democratization and IP Licensing
User-Innovation Workshop,
Harvard Business School
August 2007
Focus on User-Innovation
– Academic
• Studies
• Special Issues
• Democratizing Innovation, von Hippel
– Governmental
• Need to address the dysfunctionalities of technological progress
– Industrial
• Open-innovation impetus to outsource R&D efforts to more suitable parties
User-Innovation – Barriers to Democratisation and IP Barriers
Impediments
• Organizational Difficulties
– Time
– Cost
– Management
User-Innovation – Barriers to Democratisation and IP Barriers
Democratisation:
“Users of products and services - both firms and individual consumers - are
increasingly able to innovate for themselves” (von Hippel 2005).
Goals:
• Contact Details: