HBS - MIT User and Open Innovation Workshop 2008 August 4-6, 2008 Harvard Business School, Boston, MA Short

Presentation Slides Track 1 2 3 4 5 6 7 8 9 10 11 Title Lead User and User Innovation Policy and User Entrepreneurship Communities Communities Open Innovation Intellectual Property Open Source Lead User and User Innovation Open Innovation Intellectual Property Communities & Open Source Research Update 1 Research Update 2 Research Update 3 Research Update 4 List of Attendees Page 2 43 74 99 128 153 183 213 251 295 326 372 398 423 461 493

Track 1: Lead User and User Innovation (Hawes 101) Monday Aug. 4 2:00 - 3:30 "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 Sung Joo Bae MIT Sloan
sjbae@mit.edu

Language difference as the consequence of learning
Manufacturer Side
Manufacturer Learning

User Side
User Learning

Language A

Language B

Learning in Joint Product Development Projects

The influence of language difference on joint product development
Manufacturer Learning User 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
Shipping 185 hrs

Templating N = 899 projects

Duration

Communication Pattern
700 642

Number of Communication Instances

600

500

400

396 368

300

Frequency

200

104 100

0 Initial contacts prior to official start of projects Design iteration Manufacturing After the delivery of the product

Project Phases

n = 1510 74 call logs (5%)

Local learning – Language acquisition
Customer Representative
At 06:07 AM 4/26/2005, you wrote: Dear Sam, We have received your order by phone for the following part: 1 x 1U 19" rackmount, consisting of front panel, rear panel, chassis, cover and 2 hub mounts, 11 gage plain steel front panel, 18 gage plain steel for remaining parts, powder coated matte black You will receive an e-drawing of your order within 24 hours for your approval. Your Order Number is: A042605001. Once approved your order will enter production. Best Regards, Paul Simon Business Development Protocase Inc. Ph 1-866-849-xxxx Fax (902) 567-xxxx Email: simon@protocase.com www.protocase.com

User

what is the e-drawing?... and how will it differ from what i sent you?... e-drawing required because of the material thickness change? sean

Customer Representative

Hello Sam, 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. You can view the e-drawing with your regular Internet browser. Feel free to give me a call or send me an e-mail if you have another question.

Best Regards, Simon

Content Analysis
Communication Pattern during the Joint Development Projects
500 450 400

Number of Cases

350 300 250 200 150 100 50 0 Initial contacts prior to official start of projects Design iteration Manufacturing After the delivery of the product PRICE DESIGN SHIPPING LANGUAGE COMMUNICATION FEEDBACK

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)

Under what conditions do user innovators start their own firms?

Networks, geography, specialty

How did the Fogarty catheter become the “industry standard” in medicine?

Who is Thomas Fogarty?  Physician  Professor of Surgery at Stanford Medical School  Inventor  Over 70 surgical patents  Entrepreneur  Founded over 30 companies Revolutionized minimally invasive surgery and helped 15 million patients  Catheter is now marketed by Edwards Lifesciences

We investigate the nature of user innovation in the medical device industry

What is the extent of user innovation in the medical device industry?
How, if at all, are user innovations different from industry innovations?

What are the implications of this result for understanding the trajectory of medical device innovation? How do firms collaborate with users to access valuable knowledge?

We match 2 sources of data to create the unique dataset used for this paper

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) Variable # claims # Nonpatent Cites # Cites Made # Industry Cites Made # Cites Rec’d # Industry Cites Rec’d Generality # Distant Cites Rec’d Full Sample 17.11 2.71 16.68 10.41 13.16 10.88 0.39 5.35 Doctor Inventions 17.71 3.84 15.70 9.12 15.23 12.55 0.41 6.46 Non-Doctor Inventions 16.97 2.44 16.91 10.72 12.66 10.47 0.39 5.09 Difference (Doc-NonDoc) 0.74** 1.40** -1.22** -1.61** 2.57** 2.07** 0.02** 1.37**

We also have some preliminary insights into the various motivations driving manufacturer-user collaborations

The largest, least research intensive device firms appear to be working with doctors for purposes of exploitation

Patent based measure using repeat and self citations

Smaller, more research intensive firms appear to be working with doctors for purposes of exploration

Patent based measure using new citations

More results to come....

Thank You!

User Innovation:
Incidence and Transfer to Producers

Jeroen de Jong
RSM Erasmus University & EIM Business and Policy Research The Netherlands

Eric von Hippel
MIT Sloan School of Management

August 4 2008

Industrial products Printed Circuit CAD Urban and von Hippel (1988) Pipe Hanger Hardware Herstatt and von Hippel (1992) Library IT Systems Morrison et al (2000) Software security features Franke and von Hippel (2003) Surgical Equipment Lüthje (2003) Consumer products Outdoor Products Lüthje (2004) “Extreme” sports equipment Franke and Shah (2003) Mountain biking equipment Lüthje et al (2002)
Source: Von Hippel (2005, p. 20)

n 136 74 102 131

% innovating 24.3% 36% 26% 19.1%

261 n 153 197 291

22% % innovating 9.8% 37.8% 19.2%

Research objectives
Incidence of user innovation in broad surveys?
Develop indicators Apply to a broad sample of SMEs

Comparison with traditional innovation indicators? Transfer to producer firms? Exploratory study drawing on two surveys
Broad survey of 2 416 SMEs in the Netherlands Detailed survey of 498 technology-based SMEs

Conclusions
User innovation is out there
21% of all SMEs Everywhere, no just manufacturing

Current innovation indicators record only part of it User innovations spill over
Most user innovators do not protect their innovations
25% of user innovators are aware of adopting producer firms Compensation is none or at best informal

This implies that...
Current innovation surveys (CIS) can be improved, i.e. should be further detailed It is legitimate to develop policies for user innovation

Founder identity and variation in opportunity recognition & exploitation
E. Fauchart, M. Gruber, S. Shah
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)
Salah S. Hassan, Ph.D. Chair & Professor of Marketing GW School of Business The George Washington University E-mail: hassan@gwu.edu User and Open Innovation Workshop August 4-6, 2008 Harvard Business School

RESEARCH MOTIVATIONS & OBJECTIVES

The high failure rates of substantial number of innovations in the marketplace.
Consequently a better understanding of the factors influencing innovation diffusion is becoming a top priority for marketing researchers and managers, particularly those in high-tech firms. The objectives of this paper are:
1) to evaluate the influence of lead users and opinion leaders on accelerating the diffusion rate, 2) to evaluate the degree of fit between the perceived innovation attributes of lead users, lead users with opinion leadership qualities and that of the perceived innovation attributes of non-lead users, and 3) to report on research findings/ testing hypotheses that would provide directions for future research.

AN INTEGRATIVE RESEARCH MODEL

The proposed research model posits that both lead users and opinion leaders affect the evaluation of innovation attributes, which subsequently affect the rate of innovation diffusion.

AN INTEGRATIVE RESEARCH MODEL
Lead Users Characteristics Need Dissatisfaction w/ existing products Value/ benefit seekers Capabilities Motivation Experience P 3a, b P 4a, b Opinion Leaders Characteristics Knowledge Social Influence Community Active Innovativeness Information Sharing Creativity Perception of the Innovation’s Current Attributes P 1a, b Relative Advantage Compatibility Complexity Trialability Observability Usability Communicability

Diffusion Rate
Intent to Purchase
Intent to Communicate WOM

Ideal Innovation’s Expected Attributes Relative Advantage Compatibility Complexity Trialability Observability Usability Communicability

P 2a, b

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 Characteristics Need Dissatisfaction w/ existing products Value/ benefit seekers Capabilities Motivation Experience

1st Stage

Participation in a TIC*
Opinion Leaders Characteristics Knowledge Social Influence Community Active Innovativeness Information Sharing Creativity

Radical Ideas / Ideal Innovation

Control Variables
Socio-Economic, Demographic, and Marketing Mix Variables

* TIC, Tookit for Idea Competition, see Piller and Walcher, 2006
Copyright © 2007, Salah S. Hassan, Ph.D. All rights reserved

Clustering Ideas

Using Experts the original 34 ideas where clustered into a “finished product” form to allow for a better evaluation/adoption measure. Agreement between expert was high (ICC) on the clustering.

34 most innovative

8 clustered Laptop

76 ideas collected
Expert Panel Ideas above the mean

Operationalization of the Research Model
Lead Users Characteristics Need Dissatisfaction w/ existing products Value/ benefit seekers Capabilities Motivation Experience

2nd stage

TIC ideas

Opinion Leaders Characteristics Knowledge Social Influence Community Active Innovativeness Information Sharing Creativity

Evaluation of Existing versus Ideal Innovation

• Intent to Purchase • Intent to Communicate WOM H3 and H4

H1 and H2
Control Variables

Socio-Economic, Demographic, and Marketing Mix Variables

* TIC, Tookit for Idea Competition, see Piller and Walcher, 2006
Copyright © 2007, Salah S. Hassan, Ph.D. All rights reserved

Innovation Adopters & Diffusion Patterns
Lead Users
From Collaborative User communities To Mass Market

% of Adopters

Opinion Leaders

Bell-shaped 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

The dynamics of user innovation – Drivers and impediments
User and Open Innovation Workshop

HBS-MIT, Boston, August 4th – 6th, 2008

The Flying Dinghy Project
Study focus • How does the level of user innovation activity evolve over time? • What drivers and impediments affect activity levels?

Methodology • Longitudinal case study based on secondary data, in-depth interviews, and survey

Research field • International Moth sailboat • Characteristics: Development class of performance sailboats with high innovation activity historically driven by users

Source: C. Herstatt, C. Raasch

- 1-

User innovation activity in the Moth class does not wane
• Cyclical pattern in the pace of design progress
Phase 1 Phase 2 Phase 3

10 9

Age of winning design in years

8 7 6 5 4 3 2 1 0 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Year of championship

: International championships (world or European) ▲: National championships (Australian or UK)

• Co-existence of standardisation and user innovation activities at any point in time • No evidence of users being supplanted permanently by manufacturers
Source: C. Herstatt, C. Raasch

- 2-

Instead, users consecutively open up new design spaces

Focus of activity

Hull

Foils

Rigging

1960

1970 Proliferation of glass fibre reinforced plastic, later carbon

1980

1990

2000 Decreasing benefits to incremental improvements

2010 ?

User activity declined due to

Standardisation rules

Manufacturer forcing “one-design“

Drivers/ User satisfaction impediments of user Technology complexity innovation activity Barriers to user innovation

Market structure

Technology maturity
Source: C. Herstatt, C. Raasch

- 3-

Implications for ‘dynamically expandable’ design spaces

Technology maturity
High

In our case study we find… • A re-focusing of user activity after exogenous or endogenous changes in the innovation environment • No mining-out of the entire design space
Innovation barriers
High

Technology complexity
High

Market concentration
High

User Innovation Activity
Customer satisfaction
High

High

Low

This suggests that, given a supportive environment, users may not withdraw, but simply move on!

Source: C. Herstatt, C. Raasch

- 4-

For further information…

• Please attend our session:
Track 3, Hawes Hall 201, today, 2-3.30 p.m.

• 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 HBS-MIT User and Open Innovation Workshop Boston, MA August 8, 2008

Background
 For

a long time (1750-1990) it appeared to most people that producer innovation was the only economic way to realize large, complex designs  Free, open innovation driven by collaborative users is a newly important way to realize large, complex designs  Is this a contest? Who will win?

Slide 2

© Carliss Y. Baldwin and Eric von Hippel 2008

Answers —
 Is

it a contest? No, in the large Yes, in the small  Who will win? It depends (this is a contingent theory)  On what? The technological profile of an artifact … At a given time … Within a given institution

Slide 3

© Carliss Y. Baldwin and Eric von Hippel 2008

Who wins for different combinations of design cost and communication cost
B A A B C D E F G H I No Innovation Singleton User Innovation Only Producer Innovation Only SUI and Producer Innovation Coexist SUI OR Producer Innovation Collaborative User Innovation Only CUI and Producer Innovation Coexist CUI and SUI Coexist All Three Forms Coexist

Communication cost, b

E D C G I H F

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!

User Innovation in the UK The New Inventors
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
Re-frame regulation to promote user-led innovation

Establish a User Innovation Forum
Extend R&D tax credits
CENTRIM/SPRU

The New Inventors The New Inventors
How users are changing the rules of innovation

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) • What drives the timing of technological discontinuities in an industry?
– Existing research: limits of “old” technology, technological progress driven by firms – This paper: Users!!

• Preference Discontinuities -- radical changes in what users value – make “radical” technology from other industries relevant

Analog Phototypesetter Machine Speed, 1949-1982
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)
• Where do firm founders come from?
– Existing research: spin-offs from existing manufacturers, university-based technology transfer – This paper: users!

• 84% of juvenile products firms founded from 1980-2007 (and alive in 2007) were founded by users • Process was often
– “accidental” – innovated for own use, others saw product and requested it, demonstrating demand – Collective – members of user communities provided feedback and improvement ideas

Thinking about Technology: applying a cognitive lens to technical change Research Policy, 2008 (with S. Kaplan) • When/ why do users innovate?
– Existing research: economic incentives – This paper: different cognitive framing enables users to view problems in a fundamentally different way.

Innovation, corporate venture capital, and entrepreneurial clinicians:
Returns to CVC investment in the medical device industry
Sheryl Winston Smith, Ph.D.
Fox School of Business Temple University HBS-MIT User and Open Innovation Workshop

Intro

Methods

Model & Data

Results

Conclusions

Extra

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 ecosystem to invests in companies with innovation, driven “As a strategic investor, JJDChelp accelerate the pace oftechnologies that by “The whole idea hybrid internal and external research model to identify, was “Leveragingaddressto get aunmet medical needs. JJDC will seek to maximize its ever-advancing customer needs” (IBM VP corporate strategy, group potentially our is major pulse of the industry….the investmentClaudia Fan the eyes in commercialize promising new technologies” and the National nurture onand ears of Medtronic.”any other VC. ” Munce, investment, similar to (Michael Ellwein, former return and The MoneyTree™, PricewaterhouseCoopers Chief Development Officer) Venture Capital Association, 2006)

8/4/2008

CVC and Entrepreneurial Clinicians

2

Intro

Methods

Model & Data

Results

Conclusions

Extra

Research overview: CVC and Entrepreneurial Innovation

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

CVC and innovation strategy

Production of knowledge that is directly relevant to investor
Founder attributes of startup matter

 

Project level dynamics and staging of investment Competitive investment by rivals
• •

Diminished innovation performance Other goals matter
CVC and Entrepreneurial Clinicians 3

8/4/2008

Intro

Methods

Model & Data

Results

Conclusions

Extra

CVC and Entrepreneurial Clinicians
 Clinicians

can be entrepreneurial users

Physician innovators who come up with innovation based on experience in the clinical setting
Who it is not: not patient, not engineer, not serial entrepreneur

 Lead
• •

users matter

Ties strongly cultivated Medically/commercially significant breakthrough advances
Dr.Lillihei with external pacemaker. Circa 1957 Dr. DeBakey sewing Dacron aortic grafts on his wife’s sewing machine. Circa 1953

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CVC and Entrepreneurial Clinicians

4

Intro

Methods

Model & Data

Results

Conclusions

Extra

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

Model: E[cij|Xij] = exp(Xij +Zj )
cij = number of citations by incumbent device firm j to a patent filed by PCi Xi j = vector of project-specific characteristics
Zj = vector of firm specific attributes of incumbent device company j

unit of analysis : CVC investment-project level

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CVC and Entrepreneurial Clinicians

5

Intro

Methods

Model & Data

Results

Conclusions

Extra

Hypotheses

CVC and Innovation

H 1: CVC investment is associated with innovation performance directly relevant to the investing firm H 2: CVC investment in entrepreneurial user founded companies should perform better than companies founded by other types of entrepreneurs

Incomplete contracting

H 3: As the total level of CVC investment increases in a given project, innovation performance is expected to be U-shaped H 4: As the number of rounds of CVC investment in a given project increases, diminishing returns to innovation performance are expected

Competitive coinvestment

H 5: CVC investments made for “competitive strategic” goals will have lower innovation performance relative to other CVC investment

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CVC and Entrepreneurial Clinicians

6

Intro

Methods

Model & Data

Results

Conclusions

Extra

Sample selection
Avg Per Comp (USD Mil) 3.03 3.62 5.54 7.37 Rank (all VC in industry) 20 46 70 78 Rank (device comp. CVC) 1 2 3 4

Firm Name Johnson & Johnson Development Corporation Medtronic, Inc. Boston Scientific Corporation Guidant Corporation
*1987-2007

No. of No. of Avg Per Deal Deals Comp (USD Mil) 58 33 22 20 37 22 14 10 1.93 2.41 3.52 3.68

Avg Per Firm (USD Mil) 112.13 79.56 77.55 73.70

Sum Inv. (USD Mil) 112.13 79.56 77.55 73.70

 

Four largest medical device companies engaged in CVC Period: 1978-2007
• •

SDC/VentureXpert database 134 portfolio companies, 144 “projects”

Source: SDC VentureXpert, author calculations
8/4/2008 CVC and Entrepreneurial Clinicians 7

Intro

Methods

Model & Data

Results

Conclusions

Extra

Regression results (full sample)
Table 7. Negative binomial regression results, full sample
Dependent variable: c_ij (1) 0.048413 (5.02)*** 0.939814 (3.21)*** ---------------Yes 0.23686 (0.64) (2) 0.051628 (5.32)*** 0.847496 (2.88)*** 0.570657 (2.16)** ----------Yes -0.13544 (-0.40) (3) 0.047933 (4.64)*** 0.631986 (2.05)** 0.570582 (2.17)** 1.486823 (2.87)*** -----Yes -0.0583 (-0.17)8 (4) 0.0472726 (4.52)*** 0.6757906 (2.10)** 0.53324 (1.89)* 1.459434 (2.79)*** 0.3367666 (1.00) Yes -0.0786359 (-0.22)

H1: CVC investment is associated with innovation performance directly relevant to investing firm

pat_j invest user acquire_cvc acquire_nocvc firm dummies cons

no. obs. Log psuedolikelihood Wald chi2

449 -853.14356 62.97

449 -850.3077 71.68

449 -847.01525. 69.36

449 -846.71006 71.75

H2: CVC investment in entrepreneurial user founded companies should perform better than investment in non-user founded companies

Negative binomial regression estimators with heteroskedasticity-consistent standard errors (t-statistics in parentheses)
* ** ***

p < 0.10. p < 0.05 p < 0.01

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Intro

Methods

Model & Data

Results

Conclusions

Extra

Conclusions and implications
CVC is important part of firm level innovation strategy

Strategic venturing associated with enhanced innovation performance

Startup IP directly incorporated by investing firm

User founded firms (entrepreneurial clinicians) outperform others
Robust across specifications  Entrepreneurial clinician generated innovation is the “complementary asset” of the medical device industries

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CVC and Entrepreneurial Clinicians

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Intro

Methods

Model & Data

Results

Conclusions

Extra

Conclusions and implications
Incomplete contracting for innovation

Level and staging of CVC investment matters
• •

Strategic venturing may involve “riskiest” ventures Biggest return in first rounds, but have to stick around enough rounds to benefit (-) sign on ln(cvc), (+) sign on ln(cvc)2

U-shaped relationship
• Invest in most exploratory research, least like existing internal body of knowledge? Have knowledge to build on now from prior investment?

As invest further, likelihood of citation increases…

CVC investment by rivals
 

Decreased innovation performance “Competitive strategic” investment

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Professional-User Innovation Commercialization and Entrepreneurship
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
Embedded in organization Uses product in professional life Create innovation in different industry as organization.

 Professional-user:
  

Summary: Process of Professional-User Innovation Commercialization and Entrepreneurship
Firm internalizes production of innovation No additional innovation needed Firm partners with another to produce innovation

Professional- user creates innovation to meet need

Innovation solves problem

Internal demand remains

Firm sells IP of innovation to firm to produce Firm sells IP of innovation to professionaluser to spin-off

Propositions
Firm internalizes production of innovation No additional innovation needed Firm partners with another to produce innovation

Professional- user creates innovation to meet need

Innovation solves problem

Internal demand remains

Firm sells IP of innovation to firm to produce Firm sells IP of innovation to professionaluser 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) "The Emergence of Architecture: Coordination across Boundaries at ATLAS, CERN" (Philipp Tuertscher, Vienna University of Economics and Business Administration)

*no slides available

Revisiting Generalized Exchange:
Extending Theory to Understand Wikipedia, Open Source & Other Collaborative Communities

Sonali K. Shah & David Gomulya University of Washington

GENERALIZED EXCHANGE: A BRIEF OVERVIEW
C A
Common pool

D

B

E

THE PUZZLE
• Observation: exchange patterns in Wikipedia, open source & other collaborative communities look like generalized exchange • Current Theory: However, theory posits that one or more of the following mechanisms must be in effect for generalized exchange systems to function: • Altruism • Group norms • Rational action and enforcement
• Theoretical puzzle: But, these mechanisms are not present or appear relatively weak in many collaborative communities

OUR RESEARCH

What are the mechanisms and structures supporting generalized exchange in collaborative communities?
A theory paper with illustrative data from Wikipedia

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 “There [at the LEGO Group] it's a job, they have to do it. Here it’s passion…”

In 1998 the LEGO Group launched LEGO Mindstorms Robotics Invention System

• •

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
Castle

>250 sets
>850 sets
Town Trains

Space

>4.000 products
Yahoo! Group Yahoo! Group EJTC FGLTC … … … Robotics … … Group message LEGO set database LEGO set reference

>350 sets

Official LEGO sites
Train Clubs

Group message

Recent 7 days Recommended group messages

LEGO sets ranked
Group message

Peeron

Yahoo! Group

Guide to LEGO products

>6.000 sets inventoried >12.000 unique parts listed

> 500 links

Parts reference

Spotlight
Links
LEGO listings

Shopping guide

Jeff Hall

Auctions

Marketplace … Members

>3.500 member profiles
Jeff Block

Bricklink

Online shops Dear LEGO … Admin.

>3.000 shops
Off-topic

Andy Blau


BrickFest

LEGO Ambassadors

Events

64 different forums
74 different Local User groups DK

Forums
BrickWorld … … 1000 Steineland

Space Trains

CAD …

Help/FAQ

Israel Chile

USA Acronym guide History of LEGO

Lugnet FAQ

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. BRAND COMMUNITY LITERATURE • User communities go through stages of development. • Some stages foster a more innovation-friendly environment than others. • Shared brand meanings rather than shared consumption practices hold the community together. • User community membership provides an important learning ground for users.

MY MOST IMPORTANT FINDINGS
USER INNOVATION LITERATURE:

Innovations do more than satisfy needs for functional and performance related needs. They satisfy important social and identity related needs as well. Innovation in brand communities can be described via four interacting key factors: individual, mood, brand community, and external environment factors.

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

Ned Gulley (The MathWorks) Karim R. Lakhani (Harvard Business School & Berkman Center)

Overview of findings
 Collaborative innovation involves taking pre-existing (old) knowledge/designs and combining them with new knowledge/designs Re-use of old knowledge/designs by others is a function of:
  Increasing visibility of contribution Understanding/cognition of contribution by others:
   Inverse-U relationship with novelty in contribution U-relationship with reused code of others in contribution Technical complexity of contribution

Technical performance of contribution is function of:
   Increasing borrowing of code from others Quality of contributor Less frequent participation

Broader question for discussion: How do we resolve tension between novelty/reuse?

2

MATLAB Programming Contest is a Unique Setting to Explore and Inform Collaborative Innovation Theory

3

A One Week “Wiki-like” Programming Contest rules standings
1 Carliss 2 Stefan 3 Eric

view entry
Carliss fcn f(x) ...

standings
1 2 3 4 Joachim Carliss Stefan Eric

Joachim fcn f(x) ...

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

Darkness Twilight

Daylight

6

111 Authors - 3914 Entries

Dramatic Improvement in Performance

Better

7

Time

Reuse of Code Dominant Feature of Contest
Number of Different People in Leading Entry % of Borrowed Code in Leading Entry

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

Philipp Tuertscher (WU-Wien) Raghu Garud (Penn State University) Markus Nordberg (CERN)
HBS-MIT User and Open Innovation Workshop Cambridge, MA, August 2008

Coordination of complex technological systems
The role of architecture and modularity …

• Architecture determines path for distributed development of technological systems • Coordination is embedded in architectures by pre-specifying modules and interfaces • Coordination cost is reduced as long as architecture is clearly understood and stable over time
• Yet, there is very sparse literature as to how architectures emerge

Where do architectures come from?

The ATLAS Experiment at CERN
A complex technological system with an emergent modular design …

• • • • • • •

Largest experiment ever in high energy physics (HEP) 25 m in diameter, 45 m long, weight of 7.000 tons 2000 scientists and engineers From more than 165 institutions in 34 countries Collaborate to design, build and run a detector In the absence of traditional organizing principles In a decentralized setting

• One-of-a-kind technological system • Involving various expertise areas
(HEP, electronics, semi-conductor technology, material science, cryogenics, optoelectronics, electrical engineering, mechanical engineering, computer science, …)

• Impossible to extrapolate from a dominant design • Uncertainties and conflicting requirements complicate specification

Interactive Emergence of ATLAS
… through ongoing negotiation between component groups

• • • •

Architecture did not emerge in a deterministic way Deviations from “baseline” as the design emerged Changes in one module had impact on other modules These changes caused controversies about previously agreed upon specifications

• As the design was unfolding, ongoing negotiation took place within and across groups • Renegotiation of the interfaces eventually changed the architecture itself • Interlaced knowledge emerged at interfaces: local knowledge bases of interdependent groups overlapped

Conclusion

• Classical view on modularity: • Assumes that architecture is pre-specified • No justification if specifications are taken-for-granted • Very efficient from information processing perspective, development lock in on pre-specified path
• The case of ATLAS: • Architecture remained ambiguous and continued to change • Instead of blackboxing and information hiding, continuous questioning of interfaces preserved rich context • Better understanding of each others’ context and requirements • Enabled to interrelate heedfully as unforeseen changes occurred

Track 4: Communities (Hawes 101) Tuesday August 5 2008 2:00 - 3:30 "Community-Based Knowledge Production: Team Composition and Task Conflict in Wikipedia" (Ofer Arazy, University of Alberta) "Do Lead Users Appreciate the Community Around Product Co-Design? Evidence from Stated Preferences for a Mobile Gaming Portal" (Christoph Ihl, RWTH Aachen University) "Organizing for Collaborative Innovation: The Community of Firms Model" (Christopher Lettl, Aarhus School of Business) "Explaining Progression Without Hierarchy: Lateral Authority in Context" (Siobhan O'Mahony, UC Davis) "Complex Innovation Projects Without Managers" (Eric von Hippel, MIT)

Community-Based Knowledge Production: Team Composition and Task Conflict in Wikipedia

Ofer Arazy* Oded Nov** Ray Patterson* Lisa Yeo* * = The University of Alberta ** = NYU Polytechnic

Team Composition in Open Innovation Projects

Insiders Middle

Outsiders

Group Composition Functional Diversity & Typical Function
Functional Diversity High 25% 35% 40% 40% 35% Insider Middle Outsider

25%

45% 5% 55% Low

55% 5% 45%

Outsider

Insider

Typical Member Function

Research Model
Functional Diversity

H3: +

H1: +
H5a: +

Team
Functional

Task Conflict

Product Quality

Composition
H4: H2: -

H5b: -

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 Diversity .34**/.60** * = P<0.10

.24**/.37** .48**/.71**

Team
Functional

Task Conflict
R2=14% / 20%

Product Quality -.30**/-.38*
R2=29% / 27%

Composition
-.27**/-.32**

-.52**/-.81** Typical Function

Do lead users appreciate the community around product co-design?

Boston, August 5th 2008

Christoph Ihl & Frank Piller, RWTH Aachen University Johann Füller, Hyve AG and University of Innsbruck

Research motivation: trends in co-design

• What we refer to as product co-design:
- not autonomous user design and innovation - together with firms: direct collaboration  remote, reliance on firm infrastructure - coordination: (in-) formal rules  price mechanism

- e.g. R&D collaborations  mass customization toolkits

• Trend towards open co-design in and for user communities:
- (open source) user networks (von Hippel 2002) vs. communities hosted by profit-oriented firms (Jeppesen and Frederiksen 2006)
- crowdsourcing (Howe 2006) - user community develops solution space and votes for its realizations - e.g. Threadless

- user manufactures / entrepreneurs (Piller 2007)
- users not only design but also market their products to a community - e.g. Spreadshirt

Research questions
• How can lead users be attracted to a co-design platform?
– active in taking from and giving to the community (Jeppesen and Laursen 2007) – thus, attractive segment to firms as they could make the difference

• Do lead user characteristics drive the decision to adopt co-design?
– lead user characteristics have been related to new product adoption (Schreier and Prügl 2006; Schreier et al. 2007)
– but how do these characteristics (inter-) relate to the adoption of 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
H1: mass customization toolkits (e.g. Dellaert / Stremersch 2005; Franke et al. 2008); user communities (e.g. Jeppesen 2005)

Co-design features • Number of base products • Access to user modules • User forum • Product exchange • Price Expected benefit
H5a H5b

Functional product value Ease of co-designing Enjoyment of co-designing Symbolic product value

H1

H2-H4: lead user theory & extensions (e.g. Franke et al. 2006, Schreier / Prügl 2006); technology adoption (e.g. Yi et al. 2006; Argawal / Prasad 1998) Co-design utility

H2

H4

H3

ε

H6

H5: benefit-attribute compatibility (e.g. Chernev 2003; Ratneshwar et al. 2001) service co-production (e.g. Batson 1985; Van Raaij / Pruyn 1998)

Innovativeness

Use experience

Trend position

Product expertise

Leading market position

H6: resource matching theory (e.g. Anand / Sternthal 1989) cognitive costs (e.g. Bettmann et al 1990) preference uncertainty (e.g. Fischer et al. 2000)

Summary of findings, implications and outlook
• 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

• Attractive co-design platform features additionally drive LU adoption
– on average, however, user forum and product exchange are insignificant
– but: (un-) observed heterogeneity points to LU

– LU prefer features to be complementary to their expected benefits
– e.g. access to user modules is valued because of functional & symbolic value

– LU tend to be less price sensitive; but: focus on GET, how about GIVE?

• Firms should listen to the voice of lead users
– LU make more accurate choices, face less uncertainty: variance decreases with expertise – they better grasp and foresee the features that might be are compatible with the idea of co-design – firms should integrate LU in the development of the platform
– market research vs. active development?

Organizing for Collaborative Innovation: The Community of Firms Model
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.  Identify potential members by their relevance to the community’s purpose and invite them to join.  Facilitate the growth of the community through:
 


a culture of trustworthiness and equitable treatment a Central Services Office that provides community services general protocols for guiding member behavior community-owned mechanisms for turning ideas into valuable products (e.g., an “idea bank” on the community website)

Overcome conceptual, institutional, and philosophical barriers to implementation.

Our Presentation in the Paper Session

Blade.org is an example of a new organizational form – a community of firms that facilitates collaborative development AND commercialization By joining a community of firms, an individual firm:
  

Can innovate more than it could on its own Gains far more than it spends or invests Learns valuable collaborative skills Can influence market and technological development

Progression Without Hierarchy: Lateral Authority in Context
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 is typically associated with vertical authority over others (Althauser, 1989; Doeringer and Piore, 1971)
• However, scientific and technical experts often seek advancement in merit and status without authority over others (Gouldner, 1957; Ritti, 1968; Zabusky and Barley, 1996) • Separate technical “career ladders” are one approach (Kornhauser, 1962; Allen and Katz, 1989; Bailyn, 1991; Katz, Tushman and Allen, 1995) but difficult in practice

Research Question
How do people progress in organizations that rely upon lateral authority and horizontal coordination as opposed to vertical hierarchy? Open source projects are the ideal context to explore this question…..

Progression to the Center on the GNOME project

Progression to Increased lateral authority

7-11 Elected leaders

Governing authority over the project but do not gain authority over individuals.

300-400 members

Member authority over the project and can elect a governing body and have a voice on project decisions.

250-600 code committers

4200-7000 mailing list contributors

Independent variables from 1999-2004, dependent variable from 2000-2005 From CVS, mailing list foundation data

Findings
Technical merit is significant for member authority... ...but only social engagement and coordination work for governing
Social engagement H1: H2: Creating new dialogue Structurally central Member authority + Governing authority + +

Coordination Work H3: H4: H5: Dialogue across sub-community boundaries Technical contributions accepted in peer review Collaborate with a larger number of subcommunities + + + Technical merit

Gaining Lateral Authority: Post Progression Behavior Changes
Members double their efforts!
Measure Before member (n=547) 395.30 6.2413 After member (n=547) 605.53 9.3492 t-test

Technical merit:
Number of commits Technical collaborations *** ***

Social engagement:
Number of new threads Number of ties Coordination: Number of responses to threads Sub-community participation 40.61 .0618159 106.03 .0826997 *** *** 9.05 .0112789 11.96 .0191237 ** ***

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
• Formal granting of lateral authority systems may “give license” for individuals to take on neglected coordination work • Demonstrates positive feedback look between lateral authority and coordination work that may be critical for project survival

Under what conditions can complex innovation projects function without managers?

Karim R. Lakhani, Harvard Business School Eric von Hippel, MIT Sloan School of Management

Overview of our findings

Development of new OS features is a complex innovation process Core OS team members are assumed in the literature to be “management” - but we find they do no managerial tasks – there ain’t no managers!!! (Instead we find innovation participants with “better” information supported by toolkits.) Narrow result – complex feature development without managers is feasible in OS. Broader question for discussion – Under what general conditions can we do without managers?

Literature identifies key functions managers perform

 

Set strategic and tactical direction (Lorsch et al 1978)
Recruit and select individuals (Lorsch et al 1978) Design, allocate, and coordinate tasks (Mintzberg 1977, Chandler 1977)


Obtain and allocate resources (Raymond 1999)
Link internal and external environments (eg: market feedback) (Mintzberg 1977, Wheelwright & Clark 1992)

Postgres OS project feature development appears “organizationally complex” yet efficient

Phase

Number of Contributors

% of contributions used in Rel 7.4 (Average) 85% (42 – 100%) 63% (33 – 100%)

Total feature
Phase 1 – Problem Definition Phase 2 Development till first source code committed Phase 3 – Refinement from use

9.4
3.3 4.9

7.6

78% (40 – 100%)

“Core” PG members are involved in feature development but seldom perform “managerial” tasks (Core project members are technical experts and market evaluators instead – and these functions can be / are increasingly being replaced by toolkits)

Managerial Function Set strategic direction Information hub for organization Recruit and select individuals

% of Features Developed 0 0 0

Design and allocate tasks Coordinate activity amongst individuals
Link internal and external environments (market feedback)

5 8
0

Discussion Question – under what conditions are managers not needed?
In OS project feature development, there are fewer “managerial” tasks (Raymond 1999):

- No management / allocation of resources required – all volunteered
- Tools available to test solution quality and generality of user interest in a feature (and to decide on project strategy?).

Will similar conditions apply to more / all aspects of OS projects? (E.g., what about “strategy?”) Apply to all “open” projects? Apply to “all” innovation projects?

Track 5: Open Innovation (Hawes 102) Tuesday August 5 2008 2:00 - 3:30 "Facets of Open Innovation: Development of a Conceptual Framework" (Kathleen Diener, RWTH Aachen University) "Testing the Relation Between Purchasing Early Inclusion in New Product Development, Early Supplier Integration and Innovation Success in an Open Innovation Environment" (Holger Schiele, Jacobs University Bremen) "Individual Innovativeness in a Firm-hosted Online Community: The importance of Internal Position and External Participation" (Lars Frederiksen, Imperial College) "Managing Open Innovation Networks: Lessons from Mobile Phones" (Joel West, San Jose State University)

Facets of Open Innovation: Development of a Conceptual Framework

User and Open Innovation Workshop
Harvard, 5th August 2008

Kathleen Diener
Frank T. Piller

Research background and research question

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. manufacturing; Fredberg et al., 2008) difference between classical innovation and What is the most distinguishable

networks and the concept of open innovation?

Research dilemma: 2. When not been openness, howcompared adequately because a an overall framing is Results can there is aggregated and does closeness looks like? lacking

3.

How must an overall framework of open innovation be composed that is also

Reason: to include traditional concepts of collaboration and knowledge transfer? able Heterogeneity regarding the definition and understanding of open innovation Heterogeneity regarding the operationalization of open innovation as a variable to measure

Diener/Piller – Facets of Open Innovation, Harvard, 5th August 2008

2

Conceptual Framework - Model of collaboration Research Approach
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 Task assignment configurations of open 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
Facet II
Knowledge Transfer

formalized

Interaction Communication

Informalized (self organization)

Facet III

IP

Exploitation

Open license

Diener/Piller – Facets of Open Innovation, Harvard, 5th August 2008

3

Research Approach
Objective

suggesting a reliable construct of open innovation construct is based on the understanding OI is a continuum between closeness and openness derive different facets of openness of an innovation process to distinguish between various configurations of open innovation 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 Research Approach
Literature review of existing definitions and operationalizations of open innovation to derive Intermediary important constructs classical Manufacturer External Actor Explorative analysis of intermediaries as a proxy for OI operational modes, offering classical vs. or/and open innovation methods to derive possible facets of how to determine an open open Innovation accelerators innovation process Level of analysis is therefore the unit of an innovation project within a company Innovation process is viewed as a process of problem solving
Diener/Piller – Facets of Open Innovation, Harvard, 5th August 2008 4

Sample composition
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 Total sample contains 45 intermediaries (OIAs) describing approaches and methods for Open Innovation Listing all approaches and methods we get a total sample size of N=61

Diener/Piller – Facets of Open Innovation, Harvard, 5th August 2008

5

Diener/Piller – Facets of Open Innovation, Harvard, 5th August 2008

6

Results of Analysis
• 8 dominant patterns of collaboration between manufacturer and external actors
1 Screen for a very specific solution with the knowledge where to find it. Assign an external actor who holds the solution to solve the problem. The Collaboration can be either outsourced or integrated in the innovation process. e.g. Innovation Consultancy, Design Agency 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 3 Screening for a certain solution openly with a few presumptions. Integrate the external holder of the solution and work collaboratively on solving the problem. e.g. LU method, innovation communities 4 Post an innovation task openly to an own pre-defined group of possible solvers. The external actors solve the task collaboratively. e.g. Innovation challenge/contest

Diener / Piller - User and Open Innovation Workshop - Harvard, 4th August 2008

7

Results of Analysis
• 8 dominant patterns of collaboration between manufacturer and external actors
5 Posting a problem to an unknown pre-defined external network of experts. Potential solvers select themselves and solve the problem independently from each other. e.g. restricted expert communities 6 Posting a specific problem or idea, start a contest to an known pre-defined group. External actors must be qualified as potential solver. e.g. community with restricted access 7 Post a challenge or a problem to an undefined big group of experts. Potential solvers select themselves and solve the problem independently from each other. e.g. open expert communities 8 Posting ideas, tasks or do an online brainstorm with a broad unknown heterogeneous community. Collaboratively working on innovation tasks. e.g. user communities etc.

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

Dr. Holger Schiele

Cambridge, MA, August 2008

The relevance to analyse the neglected downstream part of the supply chain in open innovation research
Point of departure

The process of innovation is best been accommodated in an "open innovation" approach, according to which innovation processes extend along the supply chain (Chesbrough, 2006) One of the four factors explaining the advent of the open innovation paradigm is the increasing competence of suppliers Supplier

Producer

User

focus of this study

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*** ,91

,32

ISUP1
,57

ISUP2
,95 ,47 ,50
,49**

,64

Innovative contribution supplier

Supplier inclusion

res_ ISUP

res_ 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

OUI Workshop, HBS, Aug. 2008
Erkko Autio, Linus Dahlander & Lars Frederiksen

Motivation

• Where do entrepreneurs come from? – The demand-side perspective have been overlooked in entrepreneurship research (Aldrich, 1990) • Plenty of research on users being innovators in the community, but what are key determinants in the transition from being a user to become an entrepreneur? (Tripsas and Shah, 2007, Baldwin et al. 2006) • New organizational forms serve as vehicles for opportunity creation/recognition and resource mobilization

Quotes from user entrepreneurs
“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)

“I definitely used the online community to develop my original product idea as well as my firm. I use the community to market my software as it complements the Propellerhead Reason product. Also, two times I got really qualified beta-testers involved through the Propellerhead community” (Dec. 2007, user and CEO/founder of ‘Peter Tools Software’)

Hypotheses
• Hypothesis 1: Individuals, who perceive themselves as having lead user characteristics, will have greater entrepreneurial activity than other users in an online user community • Hypothesis 2: The greater agenda-shaping activities of a given individual within an online user community the stronger association with entrepreneurial activity. • Hypothesis 3: The greater an individual’s social standing in an online user community, as reflected in the number of responses received to her postings, the greater will be her entrepreneurial activity.

Results

• Current understanding of lead users as inventors, but sometimes also as entrepreneurs - Both individual attributes and structural explanations - Social status and agenda-shaping pursuit in the community matter for becoming an entrepreneur - Compared with individuals with a similar communication pattern from the outset, entrepreneurs’ activities in the community

differ over time

Implications - theory

• New insights to an unattended research area in the user innovation and the entrepreneurship literature
• Increased focus on evolution of entrepreneurial roles • A structuration view (agency, structure and content) on entrepreneurship • Entrepreneurial opportunities are constructed over time

Implications – management
Openness: Firm strategy to encourage entrepreneurial activities by users
• “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 HBS-MIT User and Open Innovation Workshop, Session A3 August 5, 2008
Page: 1

Research

“User and Open Innovation”
Focal Firm Vertical Come see more at X integration Suppliers Customers Rivals

User Innovation and Firm Boundaries: User X † X innovation Innovation by Users Organizing for
Cumulative Monday 12:20 p.m. X innovation Anaheim Convention Center, 203B Open innovation

X

X

X

X

X

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

• Ecosystems are necessary and good, but…
• Unanswered questions remain
1.Where does an ecosystem come from? 2.How does it evolve over time? 3.Can ecosystems even be planned beforehand?

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

• Three phase of ecosystem strategy
1.Ad hoc generalization from PDA strategy 2.Increasingly integrated and coordinated

…Also adapted to specifics of mobile phone industry
3.Automated, cheaper, more scalable

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!
For more, see

Track 5 — Hawes 102 (2pm)
blog.OpenInnovation.net

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) "Piracy and Outlaw Community Innovations" (Stefan Wagner, LMU Munich)

T o o l k it fo r U s e r In n o v a t io n B r a n d C o m m u n it y B r a n d in g

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D e v e l o p m e n t C o m m u n it y In n o v a t io n B r a nd

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T o o l k it fo r C o m m u n it y

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Costless Brand Creation by User Communities Implications for Producer Owned Brands
U s e r In n o v a t io n s
B r a nd C o m m u n it y U s e r

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C o mmu D e v e l o p m e n t C o m m u Füller, Eric e n B r a n d C r Johann n it y D r iv von Hippel In n o v a t io n s B r a n d C r e a t io n T o o l k it fo r
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MIT User and Open Innovation Workshop 2008
Harvard Business School, August 4 - 6, 2008

In n o v a t io n s
U s e r

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C r e a t io

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1

B r a n d in g

B r a n d C o m mvonn it y Johann Füller, Eric u Hippel

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Community Brand: Outdoorseiten.net

Summer Summit 2005

MIT User and Open Innovation Workshop 2008
Harvard Business School, August 4 - 6, 2008

2

Johann Füller, Eric von Hippel

Outdorseiten.net - „Placing it right on the company‘s logo...“
Now, I only have to think about how they could best show to advantage on my backpacks. At the moment, I do not have any better idea than probably replacing the big macpac-label by the Batch. I had the same idea. Place them right on the Haglöfs Logo. I’m wondering if the size fits. (Erny, outdoorsseiten) Now, I transform my Haglöf backpack into an outdorrseiten.net one. They cover the Haglöf patches well. That would be something: “outdoorseiten.net” as a new backpack brand…(Silvia, Outdoorseiten.net).

Summer Summit 2005

To put it directly on the company name is a good idea. There they are most noticeable. (boehm22) Apart from that, I believe brand labels used as status symbols are quite apish. (Silvia)

MIT User and Open Innovation Workshop 2008
Harvard Business School, August 4 - 6, 2008

3

Johann Füller, Eric von Hippel

ODS Community – A Valuable Brand

ODS WTP Relative Price Premium
Based on a 250 Euro Backpack

56,3 € 22.55%

Favorite Brand 84,5 € 33.82%

Non-label 24,7€ 9.89%

Impact of attachment and expertise on backpack label preference
ODS vs. Favorite Brand
β Brand Attachment -.506* ODS Community Attachment .535* ODS community members have more outdoor experience and expertise than does the manufacturer of my favorite .321* commercial backpack brand. ODS community members have less product development & production expertise than does the manufacturer of my - .474** favorite backpack brand. R2 (Nagelkerkes) R2 (Cox & Snell) .283 .205 Std. Error .245 .219 .134 Wald 4.264 5.952 5.719 P .039 .015 .017

.163

8.424

.004

Summer Summit 2005

R2 (McFadden) -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
Harvard Business School, August 4 - 6, 2008

.178

4

Johann Füller, Eric von Hippel

Implications
Community brands have the potential to drastically transform the market

User communities are able to create valuable brands, meanings, and identities at no costs Community brands create new business opportunities for design support, production, and logistics

Community brands can become serious competitors or partners

MIT User and Open Innovation Workshop 2008
Harvard Business School, August 4 - 6, 2008

5

Johann Füller, Eric von Hippel

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

Pre-history of the airplane 1860s Aeronautical clubs and journals arise 1894 Book by Chanute surveys the field 1903 Wright brothers’ powered-glider flight 1909 An industry exists Experiments and designs developed slowly Many were documented and shared openly Open innovation extreme, against challenges
I

Chanute’s 1894 book Progress in Flying Machines refers to many experimenters and authors
Experimenter / group
Pages ref’ing
Location (background) Britain (from US) Germany France Algeria, Egypt (from France) Australia (from Britain) Britain France US Britain Britain

Maxim Lilienthal

33 31 22 21 19 19 17 16 15 14

Penaud
Mouillard Hargrave Moy Le Bris Langley Wenham Phillips

These people wrote and published and were known to one another. Historical accounts refer to them heavily. The activity/network was international The Wrights became part of this network, then broke away. Before 1903, fixed-wing aircraft patents exist, but don’t matter much. This ecosystem is open.

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

Imagine two of them, with interest in one another’s experiments Assume total uncertainty about future competition  They’d share findings with other tinkerers  They prefer not to bother with intellectual property  Moderator/evangelist role arises naturally  They’d be willing to specialize to avoid duplication  They’d be willing to standardize design and tools Market processes are not necessary for this progress

Questions and Implications

Invention of airplane looks like open innovation
 

Right? What evidence is needed? Anybody know about European 19th century patents?

Tinkerer model assumptions generate this kind of innovation

From hobbysts, basic research, or skunkworks

This process can generate new industries.

Examining the impact & interplay of formal & informal institutions on knowledge production in the life sciences & beyond
Tradition of informal institutions

Small elite communities based on close personal relationships e.g. Erdos Limited number of knowledge inputs Exchanged and accumulated peer-to-peer under shared norms & culture Informal means to deal with competition, lack of reciprocity etc.
Royal Society started meeting in the mid1640s to discuss the ideas of Bacon A.H. Sturtevant in the Drosophila stock room. Courtesy of the Caltech Archives ©

FLIES were gathered, bred & shared under the watchful eye of Thomas Hunt Morgan (Kohler 1988) & his former post-doc Sturtevant

Democratic on some level, Shapin (1984) has vividly described how participation was closely guarded & tied to being a “gentleman”

Transformation of knowledge production necessitates emergence of formal institutional arrangements

Small elite communities with close personal relationships e.g. Erdos, & shared pedigrees Limited number of knowledge inputs Exchanged and accumulated peer-to-peer under shared norms & culture

>> people, now dis-intermediated, with islands of personal ties

Richer mix of players e.g. firms, user communities etc.
>> complex legal arrangements around access, rewards & sanctions

Reliance upon disclosure in publications & source code etc.
Need to access materials via centralized repositories Formal institutions overlay rather than replace existing informal institutions

Informal mechanisms to deal with competition, lack of reciprocity etc.

What is the impact of changes in formal institutional arrangements on knowledge accumulation?

Which institutions have the greatest impact on knowledge accumulation? To what extent do institutional changes increase or decrease the rate of knowledge accumulation? (dK/dt)

i.

Increasing intellectual property rights in biotechnology research (Murray & Stern ‟07, ‟08) ii. Patent thickets & anti-commons on the human genome (Jensen & Murray „05; Huang & Murray „08) iii. Changing licensing requirements associated with patented materials e.g. Oncomouse, cre-lox mice (Murray „08; Murray, Aghion, Dewatrapoint, Kolev & Stern)

How does the interplay of formal & informal institutional arrangements shape the social structure of the scientific community?

Do changing formal institutional change participation in knowledge accumulation? Do they substitute for informal arrangements or complement them? Do they democratize innovation?

i.

ii.

Improving access to biological materials– do formal access institutions increase participation in science? (Furman & Murray „08) Reducing access & autonomy–do US stem cell regulations change the structure of collaboration among scientists? (Murray „07;
Furman & Murray in progress)

Methodological Strategy Combining Qualitative & Quantitative Approaches

“Experimental” approach:

Citation-based approach :

Recognize that knowledge is published in one institutional environment, BUT over time may SHIFT to a different one Assuming SHIFT is “exogenous” then observe variation in the impact in these two institutional environments This provides a window into the impact of the institutional SHIFT on knowledge accumulation

Quantitative aspect

Identify a “piece of knowledge” as embodied in a specific scientific publication Observe citations to that article in other scientific publications over time as a measure of accumulation (dK/dt) and code for different characteristics of citers

Results - Changing Access to Research Mice
Negative Binomial Models Dep Var. Annual Forward Citations 1.709 1.132 Fixed Y 70% Boost in citations After IP sharing Agreement enforced

Post-Cre-lox agreement Post-NIH sharing agreement Article Effects Age FE, Calendar Year FE, Transition Window Effects

Evidence for the positive impact of “openness” and open access to complex research materials on scientific accumulation

New questions…
Collaboration & knowledge exchange across boundaries

Across industry boundaries: Can firms find more effective mechanisms to exchange knowledge e.g. experiment with prediction markets for drug discovery (with Peter Coles & Eric Von Hippel)

Across national boundaries: Can countries entering the global scientific community build formal & informal institutional capacity for accumulation? Do they build on knowledge generated across the globe e.g. analysis of China (with Devin Fensterheim)

Across expert-layman boundaries: How do different institutional arrangements facilitate or limit the role of non-experts in knowledge exchange e.g. patient populations with academic or for-profit partners, patient advocacy e.g. 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 Kathryn Walsh, Wolfson School, Loughborough University

The problem
• Revealing
– By users (Franke/Shah 2003, von Hippel 1987) – By producers (Allen 1979, Nuvolari 2004)

• Essential trade-off: gains from follow-on innovation vs. losses from information leakage (Arrow 1962) • Existing analyses focused on selective ‘revealing’ (Henkel 2006) • Here we focus on an organizational solution to dilemma: use of trusted intermediary

Findings: a ‘trusted intermediary’
• In-depth study of ‘Structural Genomics Consortium’
– An open science initiative in drug discovery at Toronto, Oxford & Stockholm Universities – Aim: determine 3D structure of proteins – Part-financed by GlaxoSmithKline, Merck, Novartis – 2003-2011, budget $30/year, 180 staff

• Roles of the trusted intermediary
– Enabling influence: allow participants to determine direction of research – Selective information brokering: protect confidentiality and hence reduce ‘unnecessary’ information leakage – Motivating cumulative innovators: encourage followon research among academic community

Implications
• Role of boundary organizations (O’Mahony/Bechky
2007) – Can provide organizational solutions to overcome revealing dilemma – This goes beyond ‘brokerage’ (Hargadon/Sutton 1997) – We emphasize social-integrative role of intermediary, vs. information transmission/storage

• Key message: trusted intermediaries may increase revealing propensity in weak intellectual property regimes

Piracy and Outlaw Community Innovation Abstract
User Innovation Workshop August 4th – 6th 2008 Boston Celine Schulz & Stefan Wagner g

What exactly is ‘outlaw innovation’?
In consumer electronics manufacturers often do not grant full access over hardware to users As a consequence, users modify these products in order to bypass security mechanisms (sometimes violating IP rights)
Apple‘s IPhone: Unlocking of SIM cards, possibility to run homebrew Playstation Portable: Hacking allows to run homebrew software (more than 1,400 programs listed in www.psp-homebrew.eu) Microsoft XBOX: prime target for modifications as it is cheap and compatible with standard PC hardware, e.g. harddisks or RAM

Often, Often user communities develop high-quality software
Playstation Portable: first web-browser developed by community XBOX Media-Center ported to LINUX and Mac-OS p
Piracy and Outlaw Community Innovation / Slide 2

However, modifications also allow to run pirated software

XBOX Media Center – Screenshot

Piracy and Outlaw Community Innovation / Slide 3

XBOX Media Center – Screenshot

Piracy and Outlaw Community Innovation / Slide 4

Motivation
User communities have been found to be beneficial for users AND manufacturers (symbiotic relationship, Jeppesen & Molin 2003, Jeppesen & Frederiksen 2006, Prügl & Schreier 2006). Dark side of user communities: bypassing legal or technical safeguards that prevent users from unsolicited usage of the manufacturer’s products (Mollick 2004, Flowers 2006) Little systematic evidence how participation in communities influences users’ pirate behavior What is the relationship between community participation and users’ pirate behavior?

Piracy and Outlaw Community Innovation / Slide 5

Survey Design – xbox-scene.com
Participants of www.xbox-scene.com were surveyed in 2006 with an online questionnaire hosted on the INNO-tec server Xbox-scene.com is the largest online community hosting discussions of modifications and homebrew-software for homebrew software Microsoft XBOX More than 300 000 registered users/ participants 300.000 Postings related to illegal software and to tutorials how to obtain and to run pirated software strictly forbidden Link to our survey posted in the major (general) forum of xboxxbox scence.com More than 2 000 responses – 1 396 complete questionnaires 2.000 1.396
Piracy and Outlaw Community Innovation / Slide 6

Descriptives – Dependent Variable (Piracy)
Respondents were asked to indicate the number of
g games for the xbox they own ( g y (original AND copies) p ) original games (NOT pirated or illegally downloaded)

Piracy defined as the share of illegal copies relative to all games owned by a respondent Descriptive Statistics:
N All games Original games Pirated games Share of pirated games 1396 1396 1396 1396 mean 58.28 13.00 45.28 45 28 0.64 sd 69.83 24.67 67.14 67 14 0.35 Median 40 7 25.5 25 5 0.78 min 1 0 0 0 max 500 410 500 1

Piracy and Outlaw Community Innovation / Slide 7

Findings
Two types of participants in outlaw community with different motivational background identified g
Innovators: Contributing hacks and software to community Adopters: ‘Consuming’ innovation provided by community

Innovators pirate less Level of community participation moderates level of piracy Active user innovators play a crucial role in creating an antianti piracy climate in user communities 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 help in responding to

the business needs ?

Belbaly Nassim (Ph.D., M.A) Associate Professor

GSCM, Montpellier Business School n.belbaly@supco-montpellier.fr
Boston - 4-6th July - 2008

How Open Source Software Design help in responding to the business needs ?
-Theoretical background on OSS development + real OSS

applications  to respond to the business needs in OSS
-Find adequate theory to respond OSS business needs -From OSS business needs build a theoretical background

Boston - 4-6th July - 2008

What is the objective of a researcher in OSS?

– Find solutions to the business problems

– Apply the knowledge detained in the knowledge bases and transfer it to managers and researchers
– Create value on existing business processes – Innovate and enhance business management

Come back to basics in order to explain phenomena's, constructs, variables etc..

Boston - 4-6th July - 2008

How Open Source Software Design help in responding to the business needs ?
- Adapt and integrate the Design theory/ artifacts/ knowledge base/

environment to respond to the business needs
Design cycle

Relevance cycle Requirement Field testing

Rigor cycle Grounding Addition to KB

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 ?
OSS Design theory

Design science
OSS research

Natural Science Justify
Evaluate Applicable knowledge

Develop
Business needs

Build

Design cycle

Rigor/ Relevance

Relevance cycle Requirement Field testing

Rigor cycle Grounding Addition to KB

OSS business

People Organizations Environment

Technology

Foundations

Methodologies

Knowledge Base

Boston - 4-6th July - 2008

Thanks for your attention

Boston - 4-6th July - 2008

Open Source Software: What we know (and do not know) about motives to contribute
Georg von Krogh, Sebastian Spaeth, Stefan Haefliger, Martin Wallin ETH Zurich, MTEC

Agenda
 Phase One
  

Factors that motivate people to contribute to FLOSS development Literature review Shortcomings Interrelations between motivation, contribution, and institutional arrangements Literature review Shortcomings 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
Stefan Haefliger | Strategic Management & Innovation | shaefliger@ethz.ch 2

 Phase Two
  

 Phase Three
  

Phase One - Literature review

Stefan Haefliger | Strategic Management & Innovation | shaefliger@ethz.ch

3

An Alternative Framework for Motivation
 Craft motives

 Compensation
Motives

 Moral concern

Desire to achieve expertise and technical skills Wish to extend the social practice, innovate and develop improved standards of excellence

Desire for rewards including money Reputation Power Compensation motives don’t have to be selfinterested

Contributions to the greater good Responsibility to observe ethical standards Obligations towards other practitioners and the wider society

  

Martin, 2000; 2002
Stefan Haefliger | Strategic Management & Innovation | shaefliger@ethz.ch 4

Future Research: The Context of Motivation
 Practitioners are primarily motivated to preserve their social practice  Research questions in the framework of the motivation-context matrix
(excerpts: full list in the paper)
Individual Craft motives Social Practice Collective Goods Institutions Compensation motives Moral concerns

Stefan Haefliger | Strategic Management & Innovation | shaefliger@ethz.ch

5

Industry Equilibrium with Open Source and Proprietary Firms
Gastón Llanes
Harvard Business School
August 4, 2008

Gastón Llanes (HBS)

Open Source and Proprietary firms

August 4, 2008

1/4

Motivation

Co-existence of Open Source (OS) and Proprietary (P) firms. Want to understand: Motivation of commercial firms to participate in OS. Competition between OS and P firms. Investment in product quality in OS or P.

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. Difference: OS share R&D, P do not. Firms profit by selling complementary goods and services.

Gastón Llanes (HBS)

Open Source and Proprietary firms

August 4, 2008

3/4

Findings

Equilibrium where OS and P co-exist. Asymmetric market structure. Few large P, many small OS. P have higher quality. Key: trade-off between free-riding and duplication of effort. Equilibrium with only OS.

Gastón Llanes (HBS)

Open Source and Proprietary firms

August 4, 2008

4/4

Open Source Architecture

Open Architecture: Do Products Mirror the Organizations that develop them?
Alan MacCormack (MIT) John Rusnak, Carliss Baldwin (HBS)
HBS-MIT User and Open Innovation Conf. Boston, August 2008

©Alan MacCormack, John Rusnak, Carliss Baldwin 2007

1

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

• But little empirical work that develops robust, repeatable Measures of Architecture and highlights predictive power
– Categorical and theoretical work: Ulrich 1995; Schilling 2000 – Empirical studies use very different measures at different levels of analysis, e.g., outsourcing-Schilling, 2000; patents-Fleming, 2004

Our Research aims to Address this Gap
©Alan MacCormack, John Rusnak, Carliss Baldwin 2007 2

Open Source Architecture

The Mirroring Hypothesis
Product Architecture

Functional Requirements

Organizational Structure

Source: Adapted from Ulrich, 1995

Do the Designs that Emerge from Communities differ Systematically from Designs that Emerge from Firms?
©Alan MacCormack, John Rusnak, Carliss Baldwin 2007 3

Open Source Architecture

The Opportunity: Software
• Software = information based product: design consists of instructions (source code) which tells computer what to do
– Designs can be processed automatically to capture dependencies

• Can track the “living history” of a design over time
– Software tools track versions – open source versions freely available

• Software architecture work has long history, yet few metrics
– Parnas, 1972: proposed the concept of information hiding for dividing code into modular units – separate internal design from interfaces

• A Natural Experiment: Different modes of organization for development; Open source versus Closed source (proprietary) H1: Open (distributed) source products are more modular
©Alan MacCormack, John Rusnak, Carliss Baldwin 2007 4

Open Source Architecture

Making Product Architecture Visible
Directory and Source File View Design Structure Matrix View

Method: Extract Function Calls between Source Files
©Alan MacCormack, John Rusnak, Carliss Baldwin 2007

Propagation Cost = 21.7%
5

Open Source Architecture

Research Approach: Matched Pair Products
• Compare Products of Similar Size and Function
– Open Source Software: globally distributed teams of volunteer developers (e.g., Raymond; von Hippel and von Krogh) – Closed Source Software: co-located teams in firms; sharing of information about different parts of the design easier, encouraged

• Problem1: Many Open source projects are tiny, no community
– Choose only those widely used and have a minimum size (~300 SFs)

• Problem2: Difficult to access Closed (proprietary) code
– 1: “Ideal” Pair – Open and Closed equivalents can be found – 2: “Proxy” for Closed Source Product – First release of Opened Version – 3: “Implied” – Open project has limited source commit; small team

©Alan MacCormack, John Rusnak, Carliss Baldwin 2007

6

Open Source Architecture

Pairs: Financial Mgmt (“Ideal”)
Financial Management Software

Propagation Cost = 8.8%
©Alan MacCormack, John Rusnak, Carliss Baldwin 2007

Propagation Cost = 42.5%
7

Open Source Architecture

Pairs: Operating System (“Ideal”)
Linux versus Open Solaris (NB different level of complexity)

Propagation cost =7.2%
©Alan MacCormack, John Rusnak, Carliss Baldwin 2007

Propagation cost = 21.8%
8

Open Source Architecture

Results: Hypothesis True in 4/5 cases
Open (Distributed)
1: Financial Mgmt 2: Word Processing 3: Spreadsheet 8.8% 2.8% 23%

Closed (Proprietary)
42.5% 29.7% 4.1%

Test Stat (MW-U) p<0.1%
p<0.1% p<0.1%

4a: Operating System
4b: Operating System 5: Database

7.2%
7.4% 9.4%

21.8%
19.1% 33.6%

p<0.1%
p<0.1% p<0.1%

WHY IS GNUMERIC SO DIFFERENT?
©Alan MacCormack, John Rusnak, Carliss Baldwin 2007 9

Open Source Architecture

Gnumeric = Open; but not Distributed
Others, 11.7% Kasal, 1.0% Icaza, 6.0% Goldberg, 38.1% Meeks, 6.9% Tigelaar, 2.6% Iivonen, 2.4% Hellan, 5.9% Guelzow, 6.9% Welinder, 18.4%
Goldberg Welinder Guelzow Hellan Iivonen Tigelaar Meeks Icaza Kasal Others Total 2007 29.2% 37.9% 18.5% 2.0% 2006 32.2% 46.4% 3.8% 5.0% 2005 35.4% 32.8% 0.3% 6.8% 2004 48.7% 25.6% 9.0% 5.3% 2003 43.9% 22.0% 21.8% 5.9% 2002 41.2% 18.8% 17.9% 13.0% 0.9% 0.2% 0.1% 2001 55.0% 10.8% 3.4% 4.4% 0.6% 11.5% 0.2% 0.1% 14.1% 100% 2000 46.2% 9.5% 8.2% 3.7% 4.4% 10.8% 5.3% 12.0% 100% 1999 14.2% 11.9% 0.9% 10.2% 30.6% 20.7% 11.5% 100% 7.7% 58.8% 32.5% 100% 1998 1.0% Total 38.1% 18.4% 6.9% 5.9% 2.4% 2.6% 6.9% 6.0% 1.0% 11.7% 100%

Analysis Method: Count appearances in the feature/change log (not all projects have this)
One person does ~40% of the work Four people do ~90% of the work

12.4% 100%

0.3% 12.3% 100%

11.9% 12.9% 100%

2.5% 8.8% 100%

6.3% 100%

7.9% 100%

©Alan MacCormack, John Rusnak, Carliss Baldwin 2007

10

4-6 August 2008 - UIC Workshop, HBS

The growth of OSS communities

Sladjana Vujovic
Department of Marketing and Statistics

4-6 August 2008 - UIC Workshop, HBS

“The growth of an OSS community: An organizational life cycle perspective”
 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

“The growth of an OSS community: An organizational life cycle perspective”

 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. The following mechanisms are used to deal with these consequences: (i) coordination (ii) member retention (iii) structuring.

4-6 August 2008 - UIC Workshop, HBS

“The growth of an OSS community: An organizational life cycle perspective”

 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)

User and Open Innovation Workshop
Harvard Business School Boston, MA August 4-6, 2008

Introduction
• • • • • User firms as user innovators
1982; von Hippel, 1976) (von Hippel, 1988; 2005)

Radical and incremental innovation

(e.g., Hollander, 1965; Riggs & von Hippel, 1994; Rosenberg,

Many improvements from (deliberate) learning by doing
Thomas, 1984; Hatch & Mowery, 1998; Pisano, 1997; von Hippel & Tyre, 1995)

(Argote, 1999; Dutton &

Production floor workers as source of innovation Innovation-promoting practices
Scott & Bruce, 1994; Subramaniam & Youndt, 2005) (cf. Garvin, 1993; Laursen & Foss, 2003; Leonard-Barton, 1992;

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?)
User and Open Innovation Workshop August 4-6, 2008 HBS - Boston, MA

Marcel Bogers “Process Innovation in User Firms: Promoting Innovation through Learning by Doing”
5-min abstract presentation

2

Literature Overview: Capabilities and Managerial Practices
• Capabilities and managerial practices
– Human capital for learning, experimentation and innovation (Baron & Kreps, 1999 ; Becker, 1993; Cannon & Edmondson, 2005; Lazear, – Information sharing and communication – Monitoring and support
1992)

1998; Lee et al, 2004; Milgrom & Roberts, 1992; Thomke, 1998; 2003; von Hippel, 1994; von Hippel & Tyre, 1995)

(Galunic & Rodan, 1998; Iansiti, 1998; Ichniowski et al., 1997; Laursen & Foss, 2003; Leonard-Barton, 1988; Macher & Mowery, 2003; von Hippel & Tyre, 1995)

(Baron & Kreps, 1999; Garvin, 1993; Leonard-Barton,

– Incentives and rewards
5-min abstract presentation

(Amabile, 1996; Baron & Kreps, 1999; Deci & Ryan, 1985; Edmondson, 1999; Ichniowski et al., 1997; Lee et al., 2004; Milgrom & Roberts, 1992)
User and Open Innovation Workshop August 4-6, 2008 HBS - Boston, MA

Marcel Bogers “Process Innovation in User Firms: Promoting Innovation through Learning by Doing”

3

Some Main Findings
• Firms “often” develop their own process innovation:
– 14% for “major improvement” process innovation – 60% for “minor improvement” process innovation

Firm-level capabilities and practices (based on factor analysis):
– Innovation-promoting managerial practices (active and passive support for innovation) – Rewards (individual and collective rewards) – Human capital (relationships and experience)
Capabilities & practices Learning by doing Process innovation

Promoting process innovation through learning by doing:
– Major and minor process innovation: Production floor autonomy – Major process innovation: Relationships – Minor process innovation: Support for innovation and rewards

Interactions:
– Major: Collective rewards – autonomy – Minor: Individual rewards – relationships

Marcel Bogers “Process Innovation in User Firms: Promoting Innovation through Learning by Doing”
5-min abstract presentation

User and Open Innovation Workshop August 4-6, 2008 HBS - Boston, MA

4

Conclusions and Implications
• Complementary sets of learning- and innovation-promoting practices
– Support for innovation – Rewards – Human capital

• Managerial implications:
– Delicate balance of practices – Long-term strategy

• “Climate for innovation”
– Freedom to gain experience, do experiments, make mistakes, share ideas and make decisions – Also monitoring and rewards

• Implications for theory:
– Agency literature ignores capabilities? – Capability literature needs incentives?
Marcel Bogers “Process Innovation in User Firms: Promoting Innovation through Learning by Doing”
5-min abstract presentation

User and Open Innovation Workshop August 4-6, 2008 HBS - Boston, MA

5

online Dec 2008

Innovating e-recruiting services – an Austrian case study
Elfi Ettinger University of Twente, Netherlands

online May 2008

online May 2007 Celeste Wilderom University of Twente, Netherlands online May 2006 Klaus Furtmueller Pro Karriere, Austria

8/8/2008

1

Project
• How can e-recruiting platforms innovate their services so as to achieve long-term participation of its users (applicants)? • Comparison of ideas collected in interviews with registered applicants with ideas collected in a lead user workshop (applicants, recruiters, system designers, management, marketing)

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 erecruiting •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
• Users are more inclined to re-use the same e-recruiting platform throughout their career stages if it includes:

Community & social network applications for specified user segments sharing:
– Similar social identity – Pre-exisiting offline social ties – Engineers are not keen on developing or maintaining strong networks with fully unknown registered engineers

Classical “Monster-like“ Job-boards:
– Seen as exchange-based career services – No value or interest to participate in the long run – No interest to frequently update profiles

8/8/2008

5

Some Innovations
• Enhance self-esteem & playfulness

• Check your market value
– Match different jobs ads with resume – Show me how I rank compared to other users, friends in my network, all graduates from a specific school etc.  cause users to search for what job ad they are the top candidate – Show educational offers if skills are missing for a specific job

• Insider/ VIP/ Fanclub of company XY
8/8/2008 6

Implications
• A mere niche e-recruiting approach is not enough to maintain an active and long-lasting userbase. 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).
7

8/8/2008

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

6th Annual International Open and User Innovation Workshop August 4-6, 2008

Research Interest
Aim of this paper: Explore customer-manufacturer relationships in MC. • • • Empirical studies in mass customization (MC) so far focused on the user-productdyad. (Dellaert and Stremersch 2005; Franke and Piller 2004; Randall, Terwiesch, and Ulrich 2007; Schreier 2006) Conceptual claims that MC locks customers into a long-term, highly durable relationship (Peppers and Rogers 1997; Pine, Peppers, and Rogers 1995) Strong affective relationships are relevant: they predict a number of behavioural outcomes such as
 loyalty and positive word of mouth intentions (Thomson, McInnis, and Park 2005)  higher willingness to pay (WTP) (Carroll and Ahuvia 2006)  positive evaluations of brand extensions (Greifeneder, Bless, and Kuschmann 2007)

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?

© User Innovation Research Initiative Vienna (www.userinnovation.at)

2

Overview of Empirical Studies (I)
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 than customers of a standard product. • Attachment matters: MC customers are willing to pay a premium of 54% for brand extensions (cereal bar).
Customer Integration (MC vs. Non-MC) Behavioural Outcomes (WTP for brand extension)

Study 1

H1 (+)

Company Attachment

H2 (+)

Argument 1: Preference fit • MC products deliver superior customer value because the customer gets exactly what s/he wants. (Addis and Holbrook 2001;Pine
1999; von Hippel 2001; Wind and Mahajan 1997)

Argument 2: Customer Empowerment • Personal accomplishments are achieved by satisfying the need for autonomy and competence. (Dahl and Moreau 2007)

• As a result, customers are locked into long-term, strong relationships. (Peppers
and Rogers 1997; Pine, Peppers, and Rogers 1995)
© User Innovation Research Initiative Vienna (www.userinnovation.at)

• Relational inputs that make a person feel autonomous and competent promote stronger attachments. (Ryan and Deci 2000;
Thomson 2006)
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 than customers of a standard product. • Attachment matters: MC customers are willing to pay a premium of 54% for brand extensions (cereal bar). Scenario-based experiment (“PAT-Study”, n=444) • Preference fit plays a key role in explaining why customers of MC products forge stronger attachments. • However, also the mere effect of “doing it oneself” leads to higher attachments. Scenario-based experiment (“PAT-Study”, n=343) • Generalization of Study 2 • Findings are robust if we manipulate product category [hedonic/utilitarian] and product category involvement [low/high]
4

© User Innovation Research Initiative Vienna (www.userinnovation.at)

Study 3

Study 2

Study 1

Practical Implications
Mass customization is a powerful instrument to lock customers into an affective, longterm relationship.

Even if customers of MC come up with a design that is only as good as a standard product (“worst case”), MC companies will forge stronger customer relationships. A company might want to offer MC for one or a limited number of products only. However, this strategy will have positive “spill-over” effects for other products in the portfolio.

© User Innovation Research Initiative Vienna (www.userinnovation.at)

5

Effects of User Innovation on Industry Growth: Refining Technology of Japanese Steel in the 1950s and 1960s

2008 User and Open Innovation Workshop 4-6 August 2008 Tsuyoshi Nakamura Tokyo Keizai Univ.

Hiroshi Ohashi Univ. of Tokyo

1

Basic Oxygen Furnace as Process Innovation

Scrap

Open Hearth (OHF)

Blast Furnace
Pig Iron

Basic Oxygen (BOF)

Crude Steel (Ingot)

BOF substantially reduced operation time to 45 minutes from 6 hours with OHF. “The BOF was the greatest breakthrough in steel refining in the last century”

Steel Refining Process
Steel Products

Our Focus 1950s to 1960s

2

BOF as User Innovation

Japanese Steel Makers: (Yawata)

MHL

OG system

Austrian Steel Makers: 3 (Vöest, Alpine, Von Roll, and Huttenwerke Huckingen)

Goal and Motivation of the paper
• • We wish to quantitatively assess contributions of BOF on industry growth and productivity. To perform such quantitative analyses, we need to overcome two technical issues:
1. Get plant/furnace-level data to identify impact of BOF, separately from other unobserved supply shocks.
2. Nail down causality, i.e., BOF adoption causes industry growth and productivity, not the other way around.

This paper focuses on BOF’s associated with Japanese innovations; on which clean and detailed data are available. The data:
– – Allow us to estimate total factor productivity of BOF. Combined with the productivity estimates, allow us to simulate an economic model to quantify the importance of user innovations
4

Importance of BOF: Casual Observation

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? An Analysis of Effect Sizes and Moderators

Nikolaus Franke, Peter Keinz & Christoph Steger WU Vienna University of Economics and Business Administration

6th Annual International Open and User Innovation Workshop August 4-6, 2008

Individualization as future strategy in new product development
A large body of literature and empirical findings point at the potential economic advantages of individualization of products as a business strategy Conceptional arguments indicating the potential benefit of individualization: - User needs are too heterogeneous to be satisfied by one standard product
Smith 1956, Pine 1995, Franke , Reisinger & Hoppe 2008

- 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 would have wanted…

- do not know their real preferences and/or - are unable to express their real preferences properly and/or

Conceptual arguments:

- are not interested in the exact product specifications, individualized products will fail to deliver additional benefit compared to standard or segment-specific products

…and what they order often doesn‘t correspond.…

Huffman & Kahn 1998, Kramer 2007, Simonson 2005, Zipkin 2001

Research interest and hypotheses
Traditional marketing questions the customers’ ability to provide precise information on what they want. 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 (based on measured preferences) H2 (+) Preference insight H1 (+) Perceived benefit

H3 (+) Ability to express preferences

H4 (+) Product involvement

Method - Overview
We conducted a highly realistic experiment in order to measure the value of individualization  Aim of the study: Measurement of the value of individualization based on self-expressed preferences and of moderating effects - experiment (Between- and within-subject-design) - Representative sample of 1,589 participants - Research field: newspaper market Study - Comparison of standard, segment-specific, and individualized newspapers

- Segment-specific newspapers were generated via Latent Class Analysis
- Dependent variables: WTP, Purchase intention and Attitude toward the product

- Moderators: preference insight, ability to express preferences and product involvement

Findings and implications
Individualization seems to be a promising strategy. The benefits that can be derived from individualized products depend on the customers’ characteristics.  Findings: Level of individualization (based on measured preferences) H2 (+) Preference insight  Implications: - Individualization seems to be a more promising strategy than segmentation – even if it is based on expressed preferences - However: the benefits of individualization are contingent upon characteristics of the customers; manufacturers should support the customers in exploring and learning their preferences H1 (+)

 

Perceived benefit

H3 (+) Ability to express preferences

H4 (+) Product involvement

X

Questions remaining unanswered

- What about  product involvement? generalizeabiltiy?

Study II

 To learn more, come to our session (Track 8, Hawes 101)!

User-manufacturers, Pre-entry Experience, and the Emergence of Technical Subfields in Industrial Robotics

Raja Roy MB Sarkar

Tulane University Temple University

Rajshree Agarwal

University of Illinois, Urbana-Champaign

User and Open Innovation Workshop Harvard Business School August 4-6, 2008

Competitive Advantages of User-Manufacturers with Pre-entry experience
Prescient Upstream Knowledge of Technology That will be Disruptive at the industry level

Successful leverage of technological competence during the emergence of technical subfield

Prescient Downstream Knowledge of New Markets

Upstream knowledge: Tension in the literature
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

Von Hippel View:
• Users engage in exploratory search: good for innovations during emergence of technical subfields

Relationship with Customers UM NUM
Core technology involved in disruption COMPETENCY Destroying Enhancing

Entrant types

I
In-house customers AND prior experience in core technology of emerging technical subfield

II
NO in-house customers; ONLY prior experience in core technology of emerging technical subfield

III
ONLY in-house customers but NO prior experience in core technology of emerging technical subfield

IV
NO in-house customers and NO prior experience in core technology of emerging technical subfield

Context and Findings
• Industrial Robotics industry: 1975-1992
– – Electronically controlled robots: Emerging technical subfield Hydraulically controlled robots: Existing technical subfield

Sources of data: Archival data
– 170 robot manufacturers (of which 52 firms are UMs)

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

• Shared platforms may prevail
– Citibank ATM network vs. Cirrus – AOL vs. Internet

• Proprietary and shared platforms may coexist
– – – – Macintosh and Linux ECNs and NYSE Skype and SIP Mall and High Street
2

Context: Platform-Mediated Networks
User A User B

Platform
Components - Hardware - Software - Services Rules - Standards - Protocols - 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

• 60 of the world’s 100 largest companies (by market cap) earn > 50% of revenue from platform-mediated networks
4

Platform Roles
• Providers are users’ primary point of contact with platform • Sponsors do not deal directly with users; rather, sponsors hold rights that determine: – Who may change platform technology – Who may participate in network

• Each role may be filled by one party or many; often, a single party fills both roles
5

Structural Types
One Provider One Sponsor
Proprietary •Macintosh •eHarmony •Mall of America

Many Providers
Licensor •Windows •American Express •Scientific-Atlanta
Shared •Linux •Wi-Fi •Real Estate MLS
6

Joint Venture •CareerBuilder Many Sponsors •Orbitz •Covisint

Conditions Favoring Proprietary vs. Shared Models
• Aspiring platform providers with a big edge (e.g., strong patents) should always pursue proprietary approach • If many evenly-matched parties simultaneously can launch rivals platforms, then… • Share if mature market is likely to be served by a single platform (i.e., winner-take-all)
– Users worry about hold-up – Providers worry about big losses (WTA = losers take nothing)

• Stay proprietary if free rider problems exist due to user subsidies and/or upfront spending on centralized infrastructure
7

Internalizing Network Externalities: Subsidization Strategies
Externality
Pioneer > Late Adopter

Solution
•Penetration Pricing (e.g., PayPal, PS3)

Side A > Side B
(and vice versa)

•Permanent Subsidies to One Side (e.g., PDF, Monster.com) •Integration into Sell-Side User Role (e.g., Xbox + Halo, Mac + iLife) •Exclusivity (e.g., anchor store, Blu-ray)

Marquee User > Hoi Polloi

8

WTA Potential? Yes Proprietary Favored •Proprietary examples: PayPal, Yellow Pages in smaller cities •Shared examples: WWW, real estate MLS Shared Favored •Shared examples: DVD, fax, barcodes, Wi-Fi, SMS No Proprietary Favored •Proprietary examples: video games, paid search •Coexistence examples: NYSE/ECNs; credit cards Coexistence Common •Coexistence examples: Symbian + Blackberry; Linux + Mac

Yes Free Rider Issue? No

9

Missing from framework: When does
shared approach yield superior platform?
• Positive factors
– Multiple parties = greater collective R&D effort – Darwinian pressure to incorporate best technologies – Regular user feedback and input throughout design cycle, not just in alpha/beta – Specifying module interfaces avoids “spaghetti code”

• Negative factors
– Delays due to politics and coordination processes – Modular design forfeits opportunities for tight integration (as with iPod/iTunes) – Least common denominator design to ensure support of less skilled parties – Vested interests may obstruct innovation
10

HBS-MIT User and Open Innovation Workshop August 4-6, 2008

TWO SPECIFIC FACTORS THAT DETERMINE COOPERATION WITH USERS: STICKY INFORMATION AND HETEROGENEOUS NEEDS

Gloria Sánchez González
(gloria.sanchez@unileon.es)
Universidad de León

Index

Objective

Theoretical background

Empirical model

Findings and Implications

Objective

Investigate the factors determining cooperation between manufacturing firms and users

Index

Objective

Theoretical background

Empirical model

Findings and Implications

Theoretical background

What are the conditions under which choosing to cooperate with users would be the right thing to do?
Sticky Information

Heterogeneous Needs

Theoretical background

STICKY INFORMATION

“The stickiness of a given unit of information in
any given instance is defined as the incremental expenditure required to transfer that unit of information to a specified locus in a form usable by a given information seeker”
(von Hippel, 1994:430)

Theoretical background

Sticky information on needs

USERS

INFORMATION
COOOPERATION

Sticky information of technical nature

ASYMMETRIES
(von Hippel, 1994, 1995, 1998, 2001b; von Hippel y Katz, 2002; Thomke y von Hippel, 2002)

MANUFACTURER

Theoretical background

What are the conditions under which choosing to cooperate with users would be the right thing to do?
Sticky Information

Heterogeneous Needs

Theoretical background

HETEROGENEITY OF NEEDS
“The heterogeneity of needs in a group is the degree to which the needs of i individuals can be satisfied with j standard products which optimally meet those needs”
(von Hippel, 2005: 39)

Theoretical background

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

Findings and Implications

Empirical model

STICKY INFORMATION ON NEEDS

H1 (+)

TECHNOLOGICAL STICKY INFORMATION
HETEROGENEOUS NEEDS

COOPERATION WITH USERS
H2 (+)

H3 (+)

Size

Foreign capital

Export intensity

R&D Experience

Public Subsidies

Tecnonological sector

Adquisition & Demerged

Economic Year

Innovation and cooperation control variables

Panel control variables

Index

Objective

Theoretical background

Empirical model

Findings and Implications

Findings and Implications

• Sticky information on needs: access to a deeper understanding of market needs and identify needs that the user is not aware yet. • Sticky information of technological nature: avoid to waste time and effort in solving technical problems that the user can face during the use of the innovation. • Heterogeneneous needs: offer differenciated products in less time, with lower costs and with higher degree of acceptance from buyeres (loyalty).

HBS-MIT User and Open Innovation Workshop August 4-6, 2008

TWO SPECIFIC FACTORS THAT DETERMINE COOPERATION WITH USERS: STICKY INFORMATION AND HETEROGENEOUS NEEDS

Gloria Sánchez González
(gloria.sanchez@unileon.es)
Universidad de León

Cooperative Resource Exchange & Value Creation Through Open Technology Platforms
Sonali Shah Patrick Wagstrom Jim Herbsleb

THE OBSERVATION
• Eclipse: a new and interesting “business focused” application of the open source model

Open source community controls the code A commercial consortium drives "marketing" and commercial relations; create for-profit tools built on top of it.

Firms pay to participate and commit to contributing to the project. Contributions licensed under terms that allow it to be used for nearly any purpose by anyone. To-date, over 175 companies are contributing to the open platform and the majority of these companies are also offering a commercial product based on the platform Eclipse is THE development environment for many languages and fields (e.g. Java, embedded devices)

THEORETICAL PUZZLES & RESEARCH QUESTIONS
• Collective Action: How are “tragedy of the commons” problems avoided (Olson 1965, Ostrom 1990, Knoke 1990)? • How is this platform being cooperatively developed, maintained, and extended?
• Intellectual Property & Commercialization: firms motivated by profit and supported by strong intellectual property right regimes, drive product innovation and commercialization (Schumpeter, 1934; Arrow, 1962; Demsetz, 1967; Nelson and Winter, 1977; Nelson and Winter, 1982; Dosi, 1988). The platform is a digital good and open by design – and therefore non-rival and non-excludable: • What strategies do firms use to create and protect commercial products built upon an open platform?

KEY FINDINGS

1. Business Models: Diversity of business models and motives amongst participating firms appears to lead to a diversity of behaviors and hence a more robust community 2. Governance: a number of checks and balances are used to increase communication, cooperation, and trust. Transparency is critical 3. Firms are very strategic in how they deploy their resources and what they choose to share and when

INTERESTED IN HEARING MORE?

Come to our talk!

Innovation, Openness & Platform Control

Geoffrey Parker Tulane University
© 2008 Parker & Van Alstyne

Marshall Van Alstyne Boston University & MIT

Sponsored by NSF IIS-0338662, and grants from CISCO & Microsoft Corporations

Motivation & Research Questions
• How can IP be used to promote open innovation?
– Effects of reuse, size of developer pool, technology, uncertainty, time to bundle…

• Does competition help or hurt innovation? • Do developers prefer sponsored platforms or open standards?
– Which is better cooperation or coercion?

© 2008 Parker & Van Alstyne

User Led Innovation

© 2008 Parker & Van Alstyne

Results & Policy Implications
• • • • Platforms can increase downstream innovation by optimally controlling openness and bundling. Openness dominates subcontracts when (i) network effects rise (ii) subsidy or opportunity costs fall (iii) developer output rises (iv) technology improves (v) when there are many developers. Antitrust – the social optimum is to open sooner and more fully. Rising costs cause social planners to behave more like platform sponsors! Technological Uncertainty intrinsically reduces openness. A larger developer pool reduces this both by (i) increasing output and (ii) reducing risk.


Developer competition reduces openness & innovation. Platform competition raises openness & innovation.
Common intuitions can fail in platform markets
– Double Marginalization – Fixed Fees

Developers can prefer sponsored platforms over standards. Property rights need to be longer for platforms.

© 2008 Parker & Van Alstyne

T9 – Hawes 102

© 2008 Parker & Van Alstyne

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

Problem “e-collective work” refers to Complexity online knowledge-based work Individual Capability towards which a large number of individuals, Natural, Educatio geographically distributed and acting independently, n, Financial, contribute as a collective whole. etc.
-4.2 -3.7 -3.2 -2.7 -2.2 -1.7 -1.2 -0.7 -0.2 0. 2 0. 6 1 1. 3 1. 7 2 2. 3 2. 7 3 3. 3 3. 7 4

del.icio.us Tagging

Gutenberg DP

OSS Linux InnoCentive

Google Image Labeler

Facebook Translation Amazon Mechanical Turk

Villarroel & Tucci, 2008 – www.epfl.ch/csi

2

Aug, 2008

Traditional Work

e-Collective Work Online Communities: large, distributed, external

Teams: small, local, internal
Central Product-oriented Closely held assets Tight IP protection Formal Contractual ties Physical work environment

Distributed Task-oriented
Openly shared assets „Loose‟ IP Informal Collaboration Virtual work environment

Personal synchronous interactions Impersonal asynch. contributions Monetary and Power incentive
Villarroel & Tucci, 2008 – www.epfl.ch/csi

Altruistic, Fun and Monetary ?
3 Aug, 2008

Problem Complexity

What are the motivation factors affecting Individual Capability Natural, firm-sponsored e-collective work ? Educatio n, volunteerism vs. non-volunteerism Financial,
etc.
-4.2 -3.7 -3.2 -2.7 -2.2 -1.7 -1.2 -0.7 -0.2 0. 2 0. 6 1 1. 3 1. 7 2 2. 3 2. 7 3 3. 3 3. 7 4

del.icio.us Tagging

Gutenberg DP

OSS Linux InnoCentive

Firm-sponsored e-collective initiatives
low
Villarroel & Tucci, 2008 – www.epfl.ch/csi 4

Google Image Labeler

Facebook Translation Amazon Mechanical Turk

medium

high
Aug, 2008

I would keep working on this even if I were never paid at all challenge
VA_he lp
7
0.0 37.8 34.2 0.0 18.9 0.0 7.2 0.0 0.0 0.0 0.0 0.0 1.8 0.0

I share an interest with others in this community

fun
FU_e njoy
7
0.0 41.7 44.3 0.0 11.3 0.0 0.9 0.0 0.0 0.0 0.9 0.0 0.9 0.0

cause
VA_cause
7
0.0 34.2 36.9 0.0 16.2 0.0 7.2 0.0 1.8 0.0 0.0 0.0 3.6 0.0

frequency
SO_shar e dinter e st FQ_ofte n
7
0.0 30.6 30.6 0.0 25.2 0.0 8.1 0.0 0.0 0.0 0.9 0.0 4.5 0.0

duration
W_hrswee k
60
0.0

CA_workforfre e
7
0.0 68.5 19.8 0.0 6.3 0.0 2.7 0.0 0.0 0.0 0.0 0.0 2.7 0.0

CH_gral
7 6
0.0 7.3 0.0 15.6 37.5 0.0 26.0 0.0 9.4 0.0 3.1 0.0 1.0 0.0

7
0.0

33.3 26.0 0.0 2.1 0.0 4.2 0.0 6.3 0.0 22.9 0.0

6 5 4 3 2 1

6 5 4

6 5 4 3 2 1

6 5 4 3 2 1

6 5 4 3 2 1

6 5 4 3 2 1
5.2 0.0

50 40 30 20 10 0

1.0 0.0 2.1 1.0 2.1 2.1 12.5 7.3 17.7 14.6 37.5

5 4 3 2 1

N=115

3 2 1

M G_he lp
7
0.0 42.6 26.8 0.0 19.6 0.0 6.0 0.0 2.6 0.0 0.9 0.0 1.7 0.0

CA_workforfree
7
0.0 20.5 26.3 0.0 21.4 0.0 15.2 0.0 5.4 0.0 5.4 0.0 5.8 0.0

CH_gr al
7 6
0.0 2.4 0.0 5.7 27.4 0.0 33.5 0.0 17.0 0.0 13.2 0.0 0.9 0.0

FU_e njoy
7
0.0 34.0 37.5 0.0 16.2 0.0 9.7 0.0 1.2 0.0 0.8 0.0 0.8 0.0

VA_cause
7
0.0 12.9 25.4 0.0 27.2 0.0 19.2 0.0 2.7 0.0 3.6 0.0 8.9 0.0

SO_shar e dinter e st FQ_ofte n
7
0.0 12.9 20.5 0.0 29.0 0.0 20.1 0.0 4.9 0.0 6.3 0.0 6.3 0.0

W_hrswee k
60
0.0

7 6

2.8 0.0 6.6 0.0 12.3 0.0 13.7 0.0 25.0 0.0 30.2 0.0

6 5 4 3 2 1

6 5 4 3

6 5 4 3 2 1

6 5 4 3 2 1

6 5 4 3 2 1

50 40 30 20 10

0.0 0.0 0.5 0.0 0.9 0.5 0.9 0.9 2.8 18.9

5 4 3 2 1

5 4 3 2 1
0.0

N=259

2 1

9.4

0

74.1

CA_money
8
0.0

CA_workf
8
0.0 43.5

CH_gral
8
0.0

FU_e njoy
8
0.0

VA_cause
8
0.0

SO_shar e
8
0.0

FQ_often
8
0.0

W_hrswee
60
0.0 29.4

7
0.0

7 6 5

2.0 0.0 5.6 0.0 11.0 0.0 12.3 0.0 12.8 0.0 20.2 0.0

7 6 5

1.0 0.0 2.0 0.0 13.8 0.0 33.8 0.0 20.7 0.0 18.4 0.0

7
0.0

19.2 33.0 0.0 30.2 0.0 9.7 0.0 4.3 0.0 2.8 0.0 0.8

7 6

4.1 0.0 12.8 0.0 17.1 0.0 29.7 0.0 6.9 0.0 10.7 0.0 18.7

7
0.0

5.9 11.3 0.0 25.1 0.0 29.7 0.0 8.4 0.0 9.2 0.0 10.5

7
0.0

50 40

0.5 0.3

6
0.0

29.7 16.9 0.0 5.9 0.0 2.3 0.0 0.8 0.0

6 5 4 3 2 1

6 5 4 3 2 1

6
0.0

35.3 11.0 0.0

1.0 0.0

5 4 3 2

5 4 3

5 4
0.0

30
9.5

2.1 0.8

4 3 2

4 3 2

3 2

4.6 0.0 9.0 0.0 1.3

20 10 0

4.9 3.9 10.2 22.1

N=391 Villarroel & Tucci,12008 – www.epfl.ch/csi10.2 36.1 1 1.0 1

5

2 1

1

Aug, 2008

54.2

Conclusions

We analyzed motivational factors leading to greater participation and contribution in two firm-sponsored ecollective initiatives

“volunteerism is not a good predictor of performance”

Firms may consider using both monetary and fun incentives strategically to mobilize external resources.

Villarroel & Tucci, 2008 – www.epfl.ch/csi User and Open Innovation Workshop at HBS

6

Aug, 2008

THANK YOU !

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

Design for appropriability – Modularity Induced by Intellectual Property

Joachim Henkel, Carliss Baldwin

2008 User and Open Innovation Workshop

HBS, August 6th, 2008

Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06

1

Technische Universität München

Source: http://www.cback.de/spiele/bilder/css1.jpg

Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06

Source: http://www.gulli.com/fileadmin/news_teaser/counterstrike-screenshot.jpg

2

Technische Universität München

Counter-Strike
Valve Software modularized the code of its PC game Half-Life:

core engine, proprietary

complementing code, publicly available, modifications allowed

Valve profits by selling the core engine

Users developed the popular modification Counter-Strike

* Source: For the history of Counter-Strike see Jeppesen, “Profiting from innovative user communities”, 2004

Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06

3

Technische Universität München

IP modularity enables value appropriation
core engine complementing code

• •

Same value creation would have been possible with revealing the entire code base BUT: value appropriation severely hampered

 IP modularity affects value appropriation

Note: Established dimensions of modularity (design, production, use) all address value creation

Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06

4

Technische Universität München

IP Modularity: Categories

IP status certain uncertain “outgoing,” own IP; IP status of modules can be specified specification of IP status of own artifact

TYPE OF IP MODULARIZATION

flexibility to adjust IP status; option value
flexibility to react to inadvertent infringement

“incoming,” external IP; IP status of modules externally given

avoid foreseeable hold-up

Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06

5

Technische Universität München

More examples (outgoing / certain): Ships, cameras

Korean shipbuilders outsource non-IP-sensitive modules to China

US maker of digital cameras: outsourced production to China, protecting the IP-sensitive architecture by modularization
6

Sources of figures: http://www.shippingtimes.co.uk/images/inp_negotiatior.jpg, http://www.digitalcamerareview.com/assets/6072.jpg

Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06

Technische Universität München

Propositions (tentative…)
Uncertainty about existing IPRs Extent of distributedness of value creation upstream Complexity of technology

Relevance of IPRs

Unpredictability of environment Opportunities for distributed value creation downstream (incl. outsourcing) Importance of standards and compatibility

Prevalence of reactive | proactive IP modularization

All arrows indicate positive effects
Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06

Heterogeneity of needs downstream
7

Collective Invention in History and Theory
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 selforganization 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

Inventors choose among Patenting Trade secrecy Free Revealing Based on estimation of private benefit

FOUR PROJECTS
1) Research Tool Use Exemption - based on researcher innovator model 2) Business Method Use Exemption - for some types of business methods likely to be user innovation 3) Researcher Innovator Communities Model - social norm theory - based on W. Cohen survey data - policy implications 4) Proposal for Innovation Policy Agenda at WIPO (cf. Development Agenda)

1) and 2) USE EXEMPTION to PATENT INFRINGEMENT For Business Methods and Research Tools • Analysis of incentives to invent, disclose, disseminate suggests patent incentives generally less important and patenting social costs higher for user innovation • Can doctrine implicitly separate user and seller innovations? • User infringement  User invention Seller infringement  Seller invention

Argument: Use exemption will often leave both user innovator and seller innovator incentives intact

PATENTS AND REGRESS IN THE USEFUL ARTS
UNIVERSITY OF KANSAS SCHOOL OF LAW UC IRVINE BREN SCHOOL OF INFORMATION AND COMPUTER SCIENCE

DR. ANDREW W. TORRANCE

DR. WILLIAM M. TOMLINSON

PATENTS AND INNOVATION
• United States Constitution

• Hypothesis

 “To promote the Progress of…useful Arts, by securing for limited Times to…Inventors the exclusive Right to their…Discoveries.” (Art. I, Sec. 8, Cl. 8)  The prospect of patent or patent/open source protection for inventions “promote[s] [greater] Progress of…useful Arts” than does the commons

Patents in the Knowledge-Based Economy
National Academies Press (2003)

• “The literature on the impact of patents on innovation must be considered emergent.” • “[T]he effect of patent policy has many dimensions, some fundamental to understanding the determinants of innovation generally, and these continue to challenge scholars both theoretically and empirically.”

GOALS OF THE PATENT GAME (PATENTSIM™)

• 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)  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)  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)

Productivity*

Societal Utility*

*Pure patent and patent/open source
systems not significantly different

RESEARCH PROJECTS
• Ongoing trials will investigate:
 Whether patent, patent/open source, or commons systems spur more innovation, productivity, social utility, and other phenomena  Which parameters affect performance of patent, patent/open source, and commons systems, and how they do so
 E.g.
• Prosecution costs (time and money), enforcement costs (time, money, certainty, and expense), patent term, prior art, information cost, number of players, game duration, damages, injunctions

 How patent, patent/open source, and commons systems affect outcomes for individual players versus populations of players  Whether outcomes depend on player characteristics  Whether optimal sets of parameters can improve patent, patent/open source, and commons system performance

CONCLUSION

Track 11: Communities & Open Source (Hawes 202) Wednesday August 6 11:00 - 12:30 "Developer's Behavior in Open Source Projects: An Integrative Model of MotivationsBehavior-Outcomes" (Hind Benbya, Montpellier Business School) "Modeling the Bazaar: Understanding the Inner Structure of Collaborative Knowledge Development" (Masayuki Hatta, University of Tokyo) * "Crowdsourcing Product Design: How to Stimulate User-Participation in CompanyCentered Innovation Communities" (Katharina Klausberger, Vienna University of Economics and Business Administration) "What Drives Collaborative Photo Sharing? An Extended Abstract" (Oded Nov, Polytechnic Institute of NYU) "Lead Users as Facilitators of Knowledge Sharing in an Online User Community" (Lars Jeppesen, Copenhagen Business School) "Democratizing Social Innovation: The Case of Teacher Involvement in School Design" (Nuno Gil, Manchester Business School) *no slides available

Developer’s Behavior In Open Source Projects:
An Integrative Model of Motivations-Behavior-Outcomes

August 4-6, 2008

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
Ideology
• Stallman (1999) • Stewart and Gosain (2006)

Individual
Career benefits
• Lerner and Tirole (2002)

Enjoyment-based Reciprocity
• Raymond, (1999), (2001) • Lakhani and Wolf (2003) • Hars and Ou (2002)

Affiliation and Identity
• Hertel et al. (2003)

Monetary rewards
• Hann et al. (2006)

By large each of these motives has been studied independently and results have not been entirely consistent

Study Objective
• Why and How will software developers participate to these projects ?

Motivations

Behavior

Outcomes

Theoretical bases
   Behavior--> Theory of Reasoned Action (Ajzen & Fishbein, 1980) Motivations --> Social exchange theory & Social Movement Research (Blau,1964) Psychology --> Goal orientation:Learning and Performance (Dwett & Leggett, 1988)

Model and Hypotheses
Motivations
Individual Incentives Behavior Learning orientation Performance orientation
H1

Behavior

Outcomes Results Learning outcomes

Involvement
H2 H6

Attitude
H7

H8 a H8 b H8 c

Replication Adaptation Innovation Satisfaction Level

Social Incentives
Reputation Reciprocity Identification
H3

Participation
H9 a H9 b H4

Team
Project

Salary

H5

Project Complexity

Data Collection

2007 : + 154 500 projets & + 1,6 millions of users) 1st phase • Open-ended questions with project administartors • 100 administrators of most downloaded projects • 34 administrators • Qualitative data collected used to adapt the questionnaire wording 2nd phase • 50 projets selected limited to a similar domain (enterprise application development). • Questions based on validated scales measured on a five point likert scale • 92 responses from 310 developers contacted (29,7%)

Thank You!

Crowdsourcing Product Design:
How to stimulate user-participation in company-centered innovation communities

Nikolaus Franke* and Katharina Klausberger*

6th International User and Open Innovation Workshop Boston, August 2008 *Institute for Entrepreneurship and Innovation Vienna University of Economics and Business Administration

1

Crowdsourcing: THE future business model?
• Internet allows new business models
generate innovation user user user user outsource innovation sell products

company

(mass) market

submit ideas, concepts…

e.g. Threadless, STATA, Innocentive,…

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…

Many crowdsourcing start-ups failed (e.g. Cajong, CottonCow, Gorilla Tank, Cambrian House,…) “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)

Research question: what does user motivate to submit innovations?
 Is the conventional economic paradigm of self-interest sufficient for understanding this decision?  Or must it be complemented by the fairness perception?  How must business models be designed in order to appear profitable and fair?

9

Method

Pilot studies


8 Crowdsourcing communities
41 interviews with users, operators and community experts

Quantitative experiment • • 2*2*2*2*2 between-subject experiment (n=734) simulation of 32 business models

10

Findings
The architecture of the business model clearly influcences user perceptions. Selfinterest AND fairness perceptions impact the users’ intention to submit innovations.
business model dimensions
sales participation reputation rewards p < .001

user perception
p < .001 self-interest p < .001

user response
attitude towards the company p < .001 p < .001

p < .001

p < .05
n.s.

p < .001

IP right transfer
company profit

p < .1 p < .001
n.s.

distributive fairness

n.s.

intention to submit designs p < .05 p < .001

p < .001

p < .001 selection mechanism

procedural fairness

n.s.
n.s.

p < .001

WOM intention

leaduserness
n = 734 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 11

No moderator effect

Discussion

Motivation to contribute innovations:  not only self-interest counts  also fairness perceptions by users are crucial for success  effects hold also for the subgroup of lead users

Users‟ attitudes and behavioral intentions can be impacted by the architecture of the business model
Clear advice which business models are most promising     sales commission [%] visibility of originator IP transfer only temporary community-based selection process

12

Why and how do people share what they know? Evidence from Wikipedia, Flickr, and open source software projects

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
• Communities of users who exchange information and contribute content (e.g. Flickr, Wikipedia, YouTube) • Such systems cannot survive without user information sharing

• Information sharing takes various forms:
– Reviews, meta-information, code, photos, movies, facts

• To sustain such systems, need to know why people share

Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008

Overview of research program
Focus on three types of questions as a framework for the study of information sharing: • Why: drivers of sharing • What: type of information shared • Where: context of sharing

Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008

Overview of research program
Drivers of sharing (why) Motivations: intrinsic (e.g. fun) to extrinsic (e.g. money) Structural properties Personality (e.g. personal values) Privacy concerns etc etc Meta-information (tags) Photos Context of sharing (where)

Type of information shared (what)
Code

Open source software development (Volunteering)

Wikipedia
Content/facts Flickr etc

Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008

Overview of research program
Drivers of sharing (why) Motivations: intrinsic (e.g. fun) to extrinsic (e.g. reputation building) Type of information shared (what) Context of sharing (where)

Code

Open source software development (Volunteering)

Structural properties (e.g. structural embeddedness) Personality (e.g. personal values) Privacy concerns etc

Content/facts

Wikipedia

Meta-information (tags) photos etc

Flickr

Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008

etc

Overview of research program
Drivers of sharing (why) Motivations: intrinsic (e.g. fun) to extrinsic (e.g. reputation building) Type of information shared (what) Context of sharing (where)

Code

Open source software development (Volunteering)

Structural properties (e.g. structural embeddedness) Personality (e.g. personal values) Privacy concerns etc

Content/facts

Wikipedia

Meta-information (tags) photos etc

Flickr

Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008

etc

Overview of research program
Drivers of sharing (why) Motivations: intrinsic (e.g. fun) to extrinsic (e.g. reputation building) Type of information shared (what) Context of sharing (where)

Code

Open source software development (Volunteering)

Structural properties (e.g. structural embeddedness) Personality (e.g. personal values) Privacy concerns etc

Content/facts

Wikipedia

Meta-information (tags) photos etc

Flickr

Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008

etc

Overview of research program
Drivers of sharing (why) Motivations: intrinsic (e.g. fun) to extrinsic (e.g. reputation building) Type of information shared (what) Context of sharing (where)

Code

Open source software development (Volunteering)

Structural properties (e.g. structural embeddedness) Personality (e.g. personal values) Privacy concerns etc

Content/facts

Wikipedia

Meta-information (tags) photos etc

Flickr

Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008

etc

Results
Individual motivations
Lakhani & Wolf, 2005 enjoymentbased intrinsic motivations communitybased intrinsic motivations Enjoyment

Commitment to the community

extrinsic motivations

Self development

Photo sharing

Structural

McLure-Wasko & Faraj, 2005

Structural: Degree centrality

Control

Control: Tenure in community
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

Department of Innovation and Organizational Economics Copenhagen Business School

[Joint paper with Keld Laursen, CBS]

Aim of the study
 Create a knowledge-based account of who can be expected to make knowledge contributions to online communities of practice.  Add to ‘motivation-based explanations’ of why knowledge contributions take place.

Rationale:
 Not all individuals should be considered equally important knowledge sources.  In low rivalry settings, ‘who are able’ to contribute matter more than ‘who are motivated’ to contribute.

Why should I share?
 Explaining contributions to online communities of practice:
 MANY papers on motivations
 Constant, Sproull and Kiesler (1996)
 (earn respect, part of my job, information provider resources, mentions LOW COST Provision)

 Lakhani and von Hippel (2003)
 (a range of intrinsic and extrinsic motivations - info provider monitors community to learn, and answers whenever a problem fits his/her profile -> LOW COST Provision)  Time to write a reply was twice as long for those that did additional search for a solution as compared to those that knew the solution already.

A knowledge-matching approach to the question of contributions
 We focus on the role of individuals who are capable of matching up their solutions to the problems posted in the community.  Those who have the knowledge are those likely to 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.  Who are likely to be able to match up solutions?

Two Prominent Modes of Communication of OCops are Mediating Contributions
Problem Posting:
• The disclosure of problem information to a pool of potential knowledge providers with a request for a solution/answer Broadcasting problem information to large crowds of solvers can draw on the awareness of many (Goodman and Darr, 1999)

Discussions are ”ahead of the archive”:
• Email lists and bulletin boards which serve as automatic and searchable archives that members can (and should) consult before posting Avoiding exchanges of already solved problems

Activities are primarily focused at solving “up-to-date problems

Under these conditions which key individuals will be active in knowledge sharing?
 Given their characteristics Lead users will be ahead of mainstream practice and make them more likely to have answers to novel questions,  Lead users have three characteristics:
1. They are early adopters of the product or service; 2. They experience the need for a given innovation earlier than the majority of the target market; and 3. They are users who expect attractive innovation-related benefits from a solution to a problem.

Main Hypothesis: Lead User characteristics are positively related to user community members’ propensity to give knowledge to the community.

User Characteristics Lead User Boundary Spanner Innovator Controls
H1 (+) H2 (+) H3 (-)

Knowledge Behaviors

Knowledge Give

Setting and Data
 Data collected through a web-based questionnaire to the users located in Electronic Music Instruments Software community.  The objective of the survey was to collect data on users’ personal characteristics particularly those regarding leading edge users, knowledge sharing and innovation.  Coder evaluations of knowledge contribution found in the web log

Finding(s)
 Lead user characteristics are positively related to user community members propensity to give knowledge to the community.  Lead User characteristics have a positive and significant parameter in explaning proportions of answers of total postings.

Implication(s)
 Lead users are a potentially interesting unit of analysis for explaining how knowledge spreads in various types of online communities

DEMOCRATIZING NEW SOCIAL INFRASTRUCTURE DEVELOPMENT: THE CASE OF TEACHER INVOLVEMENT IN SCHOOL DESIGN

Nuno Gil, Marcela Miozzo

Combining the strengths of UMIST and The Victoria University of Manchester

© Nuno Gil, nuno.gil@mbs.ac.uk, 2008

Research question
•Democratizing Innovation: –Look at end-users as source of innovation –Involve end-users in design development process –Notion grounded in new commercial product development •Can notion of democratizing innovation be extended into social infrastructure development ? – What does it mean to democratize new infrastructure dev? – What are end-users‟ contributions?

– Does concept of lead-user apply?

Combining the strengths of UMIST and The Victoria University of Manchester

Theoretical Framing
User Innovation literature
(e.g., von Hippel 1976, 1977, 1988, Franke and Shah 2003, Jeppensen and Frederiksen 2006, Lutje 2003, Riggs and von Hippel 1994, von Hippel 1976, 1977, 1988, 2006, etc.)

– user innovation complementary to manufacturer‟s – users help to develop new functionalities – user‟s information on context-of-use/needs is sticky and local – users reveal freely their innovations – divides production costs as work is distributed – “many minds make better designs” – manufacturers exhorted to „democratize‟ innovation: •satisfy needs of real users within real contexts •enhance firm‟s commercial performance and increase social welfare
Combining the strengths of UMIST and The Victoria University of Manchester

Research Setting
•£450m Manchester BSF Programme – Part of vast 15-year, £45bn programme initiated in 2002 to rebuild/renew UK‟s 3,500 schools – Manchester secured £450m from Department for Education and Skills (DoES) to rebuild/ renew 33 schools – School budgets set based upon #pupils, state of existing facilities – Co-development approach: construction cannot start unless headteacher agrees & signs off design documents –Ethos: “beyond bricks and mortar (…) develop capacity to deliver 21st century learning experience and provide children with greater opportunity to foster talent and succeed outside education”

Combining the strengths of UMIST and The Victoria University of Manchester

Research Method
• Exploratory study Summer 2007=> DRUID paper
• In-depth Multiple Case Study

•Theoretical Sample of School Co-development Processes
– Co-development processes incorporating innovations – Co-development processes rejecting innovations

• Data Collection (May 2007 – ongoing)
– Almost 50 focused, face-to-face interviews with project/programme/educationalists (Council) design managers/ architects (consultants), school heads/deputy heads/ heads of faculty – Archival documents (press clips, technical articles, floor plans, school visions, specs, standards, programme procedures) – Visits to new school sites

Combining the strengths of UMIST and The Victoria University of Manchester

Empirical Findings
Educational Philosophy/ Policy Personalised learning; project-based learning Extended school Better value for money Better pastoral care Vision for New School Designs

Incorporate open layouts as supplement to traditional layouts (corridor+30-pupil classrooms)

Increase # areas accessible to local community; no shutters on windows; low fences Rationalize provision of science labs; no suspended ceilings New approach to toilette design; sensorial rooms; covered play areas

Combining the strengths of UMIST and The Victoria University of Manchester

Empirical Findings
School cases (1) School profile Open layouts No Local community areas Yes Rationalization of science labs No Pastoral care innovations New toilette design; covered courtyard No evidence Located in very deprived area; comprehensive school “outstanding school” (Ofsted) 50% pupils from deprived families; voluntary aided (catholic) “good school” (Ofsted) Located in deprived area; voluntary aided (catholic) “good school” (Ofsted) Located in one of the most deprived areas in UK; comprehensive “Outstanding school” (Ofsted) Youngsters may commute 4050km to get to school; top academic performer; voluntary aided (Jewish) “Outstanding school” (Ofsted)

(2)

Six flexible classroo ms No

Limited

Yes

(3)

Limited

No

No evidence

(4)

Yes

Yes

No

Sensorial rooms for SEN; Flexible hall-theatre space No evidence

(5)

No

No

No

Combining the strengths of UMIST and The Victoria University of Manchester

Data Analysis: User Diversity vs. Policy Uniformity
Tension on implementing extended school notion
Extended Schools Policy

(“Every child matters”)

Local community (catchment area for Council school)

Catchment area for Diocese
Catchment area for Jewish community
Combining the strengths of UMIST and The Victoria University of Manchester

Data Analysis
Tension on implementing extended school policy
“ We‟ve council expectations, such as having a bay change room because they want community use, but we aren‟t a community school. The land and the buildings don‟t belong to the local authority , they belong to the diocese. In effect, there will be little community use of the facilities because although they want it, they don‟t give us the budget to run care takers and heating and lighting outside school hours.” (Deputy head, VA school 2008) “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)
Combining the strengths of UMIST and The Victoria University of Manchester

Data Analysis
Project-based learning/ personalised learning

Tension on innovating layout of teaching areas
“Traditional”

“Open”

Combining the strengths of UMIST and The Victoria University of Manchester

Data Analysis
Tension on implementing open layouts “We‟re saying „why teach in 30s?‟ Some kids could be in groups of 45 and some in a 15, so perhaps you need a more flexible space, where some kids will be doing personalized learning, some watching a video in one corner, some working on their own” (Learning Transformation Lead Officer 2007) “Education is changing all the time, we agree, our learning environment needs to be ready for that, but you‟ve got to start with something that serves what you do now and can be twisted all the way along. You‟re still going to need rooms where 30ish kids are going to be in ─ visions that exclude that aren‟t realistic” (Deputy head teacher 2007)

Combining the strengths of UMIST and The Victoria University of Manchester

Discussion
•Notion of lead-user as anticipating new mainstream needs has limited applicability –Every end-user (school) thinks different (relation to community, socio-economic background of students, academic vs. value added goals – End-users seek alignment between their own educational views and design – Developer’s willingness to involver end-user non-profit motivated – Developer wants to capture end-user knowledge as much as transform it • But end-users have sticky knowledge on needs/context-of-use: – on practice of teaching

– on practice of moving around 900 youngsters daily,
– on managing pupils with challenging behaviour & special learning needs •Takes time/requires hard evidence – For developer to persuade end-users to embrace innovative ideas

– For users to persuade developers of educational reasons/know-how behind their design views/reluctance to innovate
– Involves willingness to compromise & make trade-offs when resources are scarce
Combining the strengths of UMIST and The Victoria University of Manchester

Implications to Theory
• Uncover nuances to user innovation literature • End-users transitory role vis-à-vis facilities’ operational longevity empowers developer to challenge end-user legitimacy

–end-users are not buying: landlord-tenant analogy emerges
–but teacher-users position themselves as advocates of user-children •End-users face institutional obligations/responsibilities –Makes them wary that innovations in educational philosophy and school design will be deleterious to school performance & capability to care

•Giving end-users share-of-voice in social development is genuine effort to democratize innovation
–Allow end-users opportunity to incorporate as much as reject innovations
Combining the strengths of UMIST and The Victoria University of Manchester

Research Updates (R1) Monday Aug. 4 9:00 - 10:30 "Sense-marking Strategies of the Innovations in Virtual Worlds" (Peder Burgaard, Innovation Lab) "EMOTIO: Embedded Open Toolkits for User Innovation and Co-Design – Exploration of a New Research Area and Feasibility Study" (Uwe Gross, RWTH Aachen University) "Impact of transaction cost on contribution to information commons" (Benjamin Mako Hill, MIT) * "User-innovation Beyond Market Barriers: The Case of Machinima" (Peter Jaeger, ETH Zurich) "User Innovation and the Regulated Medical Imaging Device Industry : A Swiss and US Perspective" (Stephane Lhuillery, EPFL) "The Nature of Ideas within Distributed Innovation Systems" (Marion Potz, Copenhagen Business School) "User Innovation Measurements- An Empirical Review of the User Innovation Literature" (Vandana Ujjual, University of Sussex) * "Constructing Innovation Policy from the User Innovation Literature: Challenges and Opportunities" (Georgina Voss, University of Brighton) * *no slides available

Sense-Making Strategies and UserDriven Innovations in Virtual Worlds
Project update presented at HBS-MIT User and Open Innovation Workshop August 4-6 2008

Project: The research project Sense-making strategies and user-driven innovations in virtual worlds: A critical analysis of virtual market dynamics, cultural and social innovation and knowledge construction runs from 2008 through 2011. 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 Copenhagen Business School: the interdisciplinary research group LIKE – Leadership, Innovation, Knowledge and Entrepreneurship UNI-C - Centre for Education and Research in collaboration with the DK*CERT Computer Emergency Response Team Innovation Lab : Private consultancy firm

Project Overview: In this research project the concepts of user driven innovation and innovation processes in the practice of virtual worlds (VW) e.g. Second Life and World of Warcraft are studied with reference to three empirical fields: 1. new market dynamics and management, 2. social and cultural innovation and 3. knowledge construction.

Project Objectives Are: 1. through theoretical and methodological reflection to discuss the concepts of user driven innovation and innovation processes in the practice of virtual worlds (VW); 2. critically to analyze such innovation processes and potentials in collaboration with actors in virtual worlds; 3. to develop process- and dialogue-oriented methods for collaboration and the communication of research with actors outside of the scholarly community; 4. by means of qualitative case studies to provide empirically based research knowledge about innovation in virtual worlds through the application of active observation, qualitative methods and methods of intervention in the areas of: new market dynamics and management, social and cultural innovation, construction of knowledge and knowledge sharing.

Project Website: 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

User and Open Innovation Workshop
Cambridge, 4th August 2008

Uwe Gross
Frank T. Piller

1

Our idea: "Postponing into the user": A new paradigm to reduce the NPD risk and increase NPD efficiency
 Aim: To develop a method which enables customers to directly transfer their needs into an artifact that highly corresponds with their needs. This means to shift some specifications of the product into the domain of the user. This shall be done not before the product is manufactured (= engineer-toorder or mass customization) but after the product has reached the user. The idea is to isolate the source of uncertainty, i.e. sticky information about user needs, and to place it entirely outside the boundary of the manufacturer. This is a fundamental break with the current understanding of the innovation process (Piller & von Hippel, 2007). Embedded toolkits as a new concept to increase NPD success and overall product quality.
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
Georg von Krogh, Stefan Haefliger, Peter Jäger

HBS/MIT 2008

Model of Horizontal User Innovation

User community

1

Domain knowledge

2 6a
Learning Horizontal User Innovation

Preference towards revealing

3

Complementary assets

4

6b

Tolerance towards exploitation

5

HBS/MIT User Innovation Workshop – August, 2008

Georg von Krogh | Stefan Haefliger | Peter Jäger

2

Results
Domain Knowledge

Proposition 1 & 2: confirmed

 The community of users (Machinimators) played an important role for the sharing of domain
knowledge AND for the integration of domain knowledge with complementary assets

 Domain knowledge in the film industry was necessary to innovate in the motion picture
industry Complementary Assets assets

Proposition 3 & 4: confirmed

 The game companies preference towards free revealing provided users with complementary  Machinima companies relied on complementary assets for their horizontal user innovations
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
Implications for Research

 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
Implications for Management

 For incumbent firms in market A
freely revealed tools and assets can be used in other markets - suggesting monitoring

 For incumbent firms in market B
1) entry barriers may be undercut by users, 2) users introduce previously unknown complementary assets, and 3) users operating under the radar may become serious competitors

 For users who become venture leaders
solving IP issues early on may be crucial to sustain business

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
Dominique Foray (EPFL) Karine Lamiraud (U of Lausanne) Stephane Lhuillery (EPFL) Pierre Rossel (EPFL)

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

To understand the innovation done by medical device users is: • A fundamental step to understand the dynamic of technology (Core in Economics of innovation) • A prerequisite to understand the evolution and stakes of the health care cost evolutions (Core in Health economics).
Health care costs are “iceberg costs” (Samuelson): • The total cost is not delivered to patients. • The missing part is user innovation cost. Introduce health economist to user innovation

Why a combined Swiss and USA perspective?
Switzerland and USA are: • Most intensive health care expenditures • Lead inventors and users in medical devices and medical interventional techniques • Specialized into medical instruments and devices • The most intense academic research on medical fields (with Sweden) • Federal regulation + state or canton regulatory frameworks In Switzerland: a regulation done by the FOPH • Marketing control with licenses to users: Device references, users’ ID and address. Data cropped for 1996-2008: . • Post marketing control by FOPH agents In the US: the regulation is done by the FDA • Pre-marketing device approval or licenses to suppliers: Device references, suppliers’ ID and address. Data on line. • Post marketing control by FDA agents • Users’ experiences are registered and available . Some data on line.

Some Expected Value Added
Questionnaires and econometric treatments on large sample: Controlling for the characteristics of devices Controllling for the novelty and age of the installed devices Taking into account the role of complementary goods in user innovation : investments goods (robots or CAD software) or intermediate goods (radioisotope) and services (training, maintenance). To investigate the role of failures as a source of innovation by device users and suppliers .

The Nature of Ideas within Distributed Innovation Systems
Marion Pötz* and Martin Schreier**

HBS - MIT User and Open Innovation Workshop 2008 Boston, August 4-6, 2008

* Department of Innovation and Organizational Economics, Copenhagen Business School ** Institute for Entrepreneurship and Innovation, Vienna University of Economics and Business Administration

© 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

Organization
Problem Novel Solution

Develop Ideas Inside

OR
Identify Ideas Outside

© Marion Pötz

Research Design
Outside an organization, potential solutions to innovation-related problems can be found within different distributed sources

OT
Target Industry

Low Distance

IT

Medium Distance

Near Analogous Industries

High Distance

IAN

Far Analogous Industries

IAF

© 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 Inside vs. Outsideb Quality of Idea Descriptiona B 0,450** 0,388*** Std. Error 0,235 0,156

Near Analogous Industries

IAN

Linear Regression, F-value=3,597**, R=0,044, R2=0,032, n=159 a 5-point rating scales (1=low, 5=high) b 0=Inside, 1=Outside

Far Analogous Industries

IAF

© 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 (n=51) Novelty

I T* (n=52)

IAN* n=(25)

IAF* (n=31) Mean (SD)

Dimension Mean (SD) Mean (SD) Mean (SD) Near Analogous Industries

IAN

2,12 (1,14) 2,60 (1,27) 1,76 (1,27) 2,35 (1,45) p<0,05 p<0,05

ANOVA, F=2,783**, n=159

Far Analogous Industries

IAF
* Target Industry ideas were identified via Broadcasting (self selection might positively influence the quality of ideas!), Analogous Industry ideas via Pyramiding (no self seletion)
© 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 (n=51) Novelty

I T* (n=52)

IAN* n=(25)

IAF* (n=31) Mean (SD)

Dimension Mean (SD) Mean (SD) Mean (SD) Near Analogous Industries

IAN

2,12 (1,14) 2,60 (1,27) 1,76 (1,27) 2,35 (1,45) p<0,05 p<0,05

ANOVA, F=2,783**, n=159

Far Analogous Industries

IAF

© Marion Pötz

Research Updates (R2) Monday Aug. 4 11:00 - 12:30 "Towards a Value Theory of Innovation" (Richard Ferrers, University of Queensland) "Developing Improved Indicators for Measurement of User Innovations" (Fred Gault, IDRC) "Mass Customization in Commodity Markets: Evaluating the Utility of User- Co-Design for Energy Commodities" (Evalotte Lindgens, RWTH Aachen University) "Expansion of Collective Innovation to Customer Support Services: Case of Q&A Site as Efficient and Gentle Solution Tool for Beginners" (Manabu Mizuno, Hannan University) "Exploring How User Communities Facilitate Entrepreneurial Process" (Pradeep Kumar Ponnamma Divakaran, Aarhus School of Business) "Applicability of Open Source Principles in other than Software Industries" (Hirendra Vikram, Aarhus School of Business)

User and Open Innovation Workshop 4-6 August ‘08

Towards a value theory of innovation
Richard Ferrers University of Queensland Business School University of Melbourne, Centre for Global Innovation and Entrepreneurship, Australia www.valman.blogspot.com

Project Outline
• Research Question:

User and Open Innovation Workshop 4-6 August ‘08

– 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?

Key Findings
• 12 dimensions of value

User and Open Innovation Workshop 4-6 August ‘08

– 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

Key Implications

User and Open Innovation Workshop 4-6 August ‘08

• An innovation fails, when it fails to create VALUE • Strategies to increase profit, may decrease VALUE eg price rises • VALUE dynamic, so ongoing connection with customers, to understand their changing needs • VALUE key driver of technology adoption
– Replacing early/late adopters, S curve, linear adoption process – User innovation is Users creating more VALUE

Capturing the effects of user innovation in official statistics Purpose of this project:
Much user innovation is currently not captured in government

statistics: Improved measurement is essential to focus government policymakers on the importance of user innovation

Fred Gault IRDC and OECD Innovation Strategy Team Member, Responsible for Indicators and Developing Countries Eric von Hippel MIT Sloan School of Management

There are currently NO government measures of innovation by “consumer” users - yet it is very important
Examples of studies of the importance of user consumer good innovation: •Franke and Shah – In extreme sports equipment 38% of (expert) users innovate; •Luethje et al – 19% of (expert) Mountain Biking users innovate The approach we plan to test to fill this measurement gap: Put a screener question into an existing survey of households asking something like: “Has anyone in this household created or modified a product for their own use?” Follow up on positive responses with a more detailed questionnaire

We are also improving measurement of user FIRM contributions to process innovation
Advanced Manufacturing Technology (AMT) use by method of introduction (1) (2) (3)

Only purchase AMTs off the shelf or license

In-house customization

Develop new AMTs in-house

AMT users in category (%)

46%

26%

28%

Source: Arundel and Sonntag 1999 Users in Col. (1) only purchase or license. Users in Col. (2) must customize, but may also purchase or license Users in Col. (3) must develop, but may engage in the activities of Cols (1) and (2).

Current Work - Summer 2008

AT08 Q4: How does your business unit acquire or integrate advanced technologies?
– Similar to 1998, but asks about acquisition through – Merger or Acquisitions

Follow-up to AT08 for modifiers or creators
– – – – Nature of work Source of funds Collaboration Transfer of the technology to other firms and IP protection

Questionnaires: http://www.statcan.ca/english/sdds/00513ti.htm

Mass Customization in Commodity Markets: Evaluating the Utility of UserCo-Design for Energy Commodities

User and Open Innovation Workshop
Cambridge, 4th August 2008

Evalotte Lindgens Christoph Ihl & Frank T. Piller

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 Service Locus of Control Default Configuration
• Purchase Intention (WTP) • Decision satisfaction • Switching intention

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
Manabu Mizuno, PhD

The Maker / User Deadlock Syndrome

The PC maker

Lack of Reference Data Lack of Product Knowledge Lack Printer errorof Authority
There was an error during the last operation: please refer to trouble-shooting.

The printer maker

Collective Innovation

Q&A Sites as Popular Solution Means
Fact: 30% of Japanese Users
Makers
e.g. NC Network Software Developers have visited Q&A sites when they have trouble. e.g. Trend Micro

OEM
Link

On-line Communities Survey by Kanden CS Forum Inc. , 2008
OEM

Link

Facts: 3, 000, 000 users exchange solutions monthly. OEM 15, 500, 000 questions have been answered to date.
Major Portal Sites
e.g. MSN Japan, Goo
by NTT

1

Ambiguous Questions
are asked in everyday words, not technical terms.

Features of Q&A Sites

2

Practical Experiences
are exchanged between various types of users.

3

Wide Range of Issues
are covered from PC matters to personal affairs.

4

Friendly Communities
accommodate all levels of users.

Dias 1

Exploring how User Communities Exploring how User Communities facilitate entrepreneurial processes entrepreneurial processes facilitate
Pradeep Divakaran
Pradeep Divakaran
Aarhus School of Business, Denmark. Innovation Open Innovation Workshop User and Management Group August 4-6, 2008. Harvard Business School.

Dias 2

Exploring how user communities facilitate entrepreneurial processes
User community

Exploring how User Communities facilitate entrepreneurial processes
Facilitate

Opportunity Recognition

Opportunity Evaluation

Opportunity Exploitation

Example: To what degree Innovation Management Group Example: In what ways does collaborative filtering do user communities help serve as a valid test market identifying entrepreneurial for new products,concepts opportunities? or ideas?

Pradeep Divakaran

Example: How does the collective development of

solutions goes along with
private commercialization?

Collaborative filtering of ideas by user communities Unit of analysis: A specific idea, concept or prototype

Dias 3

Exploring how User Communities facilitate entrepreneurial processes
User community Product ideas/concepts/prototypes Collaborative filtering/screening of ideas
Facilitated by

User communities facilitating entrepreneurial processes

Opportunity exploitation

New firm creation


• • •

What is the response time of community members giving feedback to a specific idea?
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?

Pradeep Divakaran

Innovation Management Group

Collaborative filtering of ideas by user communities Unit of analysis: Community as a whole

Dias 4

Exploring how User Communities facilitate entrepreneurial processes
User community User community User community

User community

Potential variables to look at: • •

Pradeep Divakaran
Group

Innovation Management Number of community members

• Social network structure of the community. Ex. Network density Governance structure of the community. Ex. Purpose of community, rules and norms.

Dias 5

Possible empirical settings

Exploring how User Communities facilitate entrepreneurial processes

Pradeep Divakaran
Innovation Management Group

Pradeep Divakaran (prad@asb.dk)

Hirendra Vikram

August 4, 2008

Applicability of Open Source Principles in other than Software Industries

Hirendra Vikram

August 4, 2008

Applicability of Open Source Principles in other than Software Industries
Open Source Hardware Open Source Bioinformatics

Open Source Biotechnology

Biobricks

Nanotechnology

Hirendra Vikram

August 4, 2008

Applicability of Open Source Principles in other than Software Industries
Research Questions  What are the factors which make it desirable for an industry to go Open Source ?

 What are the conditions which facilitate or hinder the application of Open Source Principles in an industry ?
 How does the establishment of open source principles influence the competitive dynamics in the industry ?
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) "Open Innovation within the Firm" (Kathrin Moeslein, University Erlangen-Nuremberg) “'Whose Fault Is Their Success?': Motivations for and Mechanisms of Blame and Credit in Situations of Innovative Risk" (Sarah Otner, London School of Economics) "Network Neutrality" (Wendy Seltzer, Harvard University) "Wexla-The Modular Shoe System" (Dominik Walcher, Salzburg University)

Internal Capabilities for User/Open Innovation

User and Open Innovation Workshop
Cambridge, 5th August 2008

Dennis Hilgers

This research is part of the bmbf project "INTEGRO"
1

Modeling the internal capabilities for user/open innovation
Although firms are getting better using methods of open innovation, they still have problems to absorb and transfer the obtained information efficiently. Aim: Analyse which internal capabilities an organization must obtain to integrate widely distributed knowledge in an open innovation process. This research is based on:  An (extended) view of the theory of absorptive capacity (Cohen/Levinthal 1990; Zahra/George 2002; Todorova/Durisin 2007)  A resource based view of the firm (Barney 1991, 2001; Wernerfelt 1995)  A relational and network based view of the firm (Coleman, 1990, Dyer/Singh 1998)  An (extended) view of the NIH-problem that knowledge from beyond the boundaries is rejected (Katz/Allen 1982)

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) Organizational structures and processes to encourage integration (e.g. hierarchical coordination of integration) System of incentives and rewarding (e.g. to focus staff on external input)

This research is based on an empirical study at SMEs in German high-tech and mechatronical sector by:
1) Explorative interviews to identify a companies open innovation disposition 2) Deriving and testing measures to improve the internal capabilities for

open innovation
3

Information Markets for New Ideas: A theory to improve accuracy. (Gerrit Kamp)
Information Markets

Prediction Markets
(sports, elections, sales, project completion) Reported Accuracy: Extremely accurate
• Hanson (2003) • Forsythe/Rietz/Ross (1999) • Berg/Rietz (2003) • Gruca/Berg/Cipriano (2003) • Spann/Skiera (2003) • Chen/Fine/Huberman (2004) • Oliven/Rietz (2004) • Wolfers/Zitzewitz (2004)

Preference Markets
(consumer preferences) Correlation 0.7-0.85
• Chan/Dahan (2002) • Dahan/Hauser (2002)

Idea Markets
(ranking of ideas)

Correlation 0.1-0.45
• Ho/Chen (2007) • Hoit (2006) • LaComb/Barnett/Pan (2007) • Soukhoroukova/Spann/Skiera (2007)

Information Markets for New Ideas: A theory to improve accuracy.

Information Markets for New Ideas: A theory to improve accuracy.

Idea entry restrictions Number of participants Extrinsic incentives Trading experience

Accessible information per idea

Market design: Trade fees, interest rates, short selling, market structure

Truth-seeking trading behavior

Accuracy of idea market

Price-modifying algorithms

Cliff Lampe
Department of Telecommunication, Information Studies and Media

Lifecycles of Participation in 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?

Cliff Lampe - lampecli@msu.edu Participation Patterns in Online Communities

Everything2.com
QuickTime™ and a decompressor are needed to see this picture.

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)

Cliff Lampe - lampecli@msu.edu Participation Patterns in Online Communities

E2 Tenure

Cliff Lampe - lampecli@msu.edu Participation Patterns in Online Communities

Thanks!
• Cliff Lampe • lampecli@msu.edu

Cliff Lampe - lampecli@msu.edu Participation Patterns in Online Communities

Open but Competitive –
Who succeeds on Facebook’s Platform for Applications?

HBS – MIT User and Open Innovation Workshop 2008 Boston, August 5, 2008 Research Update (R3)
Philip Mayrhofer (mayrhofer@cdtm.de)

Institut für Innovationsforschung, Technologiemanagement und Entrepreneurship

Motivation & Research Gap
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
• Opened on May 27, 2007 • Low barriers of entry for developers:
• Free to join • Production costs low: “one weekend coding” • Operating costs zero in case of “no success” and “smoothly” scaling in case of success • Distribution costs potentially low (zero) due to word-of-mouth • No IP protection: imitation easy and quick

• Status (July 2008):
• • • • Many, many applications (approx. 22k) 95% have used at least one application Users seem to get tired of invites Applications are free to use; only indirect monetization

HBS-MIT User and Open Innovation Workshop / 05-AUG-08

Slide -4-

P. Mayrhofer

Contact
Please contact me if you have questions, ideas, suggestions!

Philip Mayrhofer - mayrhofer@cdtm.de • Doctorate student with Dietmar Harhoff, Munich • Visiting Fellow at Harvard, Sept. 08 – Jan. 09

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
Kathrin M. Möslein
University Erlangen-Nuremberg Germany & Center for Leading Innovation & Cooperation (CLIC) at HHL Leipzig

Anne-Katrin Neyer
University Erlangen-Nuremberg Germany & Center for Leading Innovation & Cooperation (CLIC) at HHL Leipzig

Neyer, & Doll, 2008

1

Types of innovators
Type of innovator Definition Open innovators

Traditional innovator

Innovators in the corporate R&D function
(e.g., Schumpeter, 1934; Wheelwright & Clark, 1992; Visserss & Dankbaar, 2002)

Core inside innovators

Peripheral innovator

Motivated employees across all business units
(e.g. Berger et al., 2005; Huff, Möslein , Piller & Fredberg, 2006; Neyer, Bullinger & Möslein, 2008)

Peripheral inside innovators

User innovator

External actors participating in the innovation process
(e.g., von Hippel, 1978, 1982; Henkel & von Hippel, 2003; Piller, 2005)

Outside innovators

Neyer, & Doll, 2008

2

Preliminary findings
The role of three types of innovators depends on strategic positioning of the firm:
The relationship between absorptive capacity* and its antecedents, i.e. the types of innovators involved, is different for differentiator and price seeker.
Price leader (Einhell) Social integration Weak ties Many Differentiator (Fein & Marquardt) Many

mechanisms

Strong ties
Symmetric

*
* Single decision-maker ****

Few
Step 1: Peer Review Step 2: Jury ****

Power relationship Asymmetric Core inside innovators Importance of type of

Peripheral inside innovators
innovator Outside innovators
Neyer, & Doll, 2008

**
**

***
**
3

• Defined as social integration mechanisms and power relationships (Todorova, & Durisin, 2007)

Open–I: Open innovation within the firm

 Why do many companies open their innovation processes towards customers, but not across team and business units boundaries?  Why are organizational practices and processes potential obstacles for open innovation within the firm?  How to motivate employees to get excited about the exchange of ideas across team boundaries?  What role do social support software tools play to foster the engagement in open innovation within the firm?

Neyer, & Doll, 2008

4

“Whose Fault Is Their Success?”: Motivations for and Mechanisms of Blame and Credit in Situations of Innovative Risk
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

The Theory of Blame sequence:

Event with Negative Consequences  Judgments of Causal Controllability  Judgments of Responsibility  Judgments of Blameworthiness  Behavioral Response

• Theory-building, comparative case studies –
Shaver,

supplemented with archival and survey data

K. G. (1985). The attribution of blame: Causality, responsibility, and blameworthiness. New York: Springer-Verlag.

CONTEXT 1
• Examines the “credit” situation • Focuses on individual motivations to contribute

solutions to seeker firms’ challenges in crowdsourcing situations • Seeks to identify financial the threshold of extrinsic motivation • Research Questions

– What motivates individuals to sacrifice their potential intellectual property and reputation amplification for the chance of financial awards? – What is the compensation threshold above which individuals relinquish (other forms of) credit? – What mechanisms of accountability operate to ensure solution quality and also fair use? – Can we design an appropriate system, and what would it encompass?

CONTEXT 2
• Will examine the “blame” situation • Research Questions – Is the amount of blame an individual would receive in the case of a failure disproportionate to the amount of credit she would receive in the case of a success? – What motivates individuals to incur such risk at the personal level when the nature of the system necessitates reward at the collective level? – Can we design a relevant “Credit Score” procedure, and what would it entail? • Methodology: Critical case study approach +

Archival research + In-depth, structured interviews

CONTRIBUTIONS
• Isolate mechanisms of blame/credit (including

attribution, splitting, and impression management) and of contribution (including motivation, barriers to collaboration and other issues of knowledge management, as well as thresholds of compensation) that begin a process of blame attribution) with acts of commission (in successful crowdsourcing Challenges that begin a process of credit attribution) compensation, mechanisms of reputation-building and impression management

• Compare acts of omission (among failed outcomes

• Yield theoretical implications for systems of contingent

CONTACT INFO
s.m.otner@lse.ac.uk www.sarahotner.com
Employment Relations & Organizational Behaviour Group (EROB) Department of Management London School of Economics (LSE) Houghton Street London WC2A 2AE United Kingdom
tel. (UK): +44 (0)789 470 1010 tel. (US): +1 973 731 9377

Network Neutrality:
Preserving platforms for democratic participation and open innovation
Wendy Seltzer -- wendy@seltzer.org Fellow, Berkman Center for Internet & Society

HBS – MIT User and Open Innovation Workshop
August 4-6, 2008

Law often distorts the field for innovators
• Transaction costs • Platform discrimination • Can it be more neutral or even promote democratic user innovation?

Transaction Costs
• Copyright anticircumvention
– WIPO Copyright Treaties – DMCA §1201 – EUCD

• Copyright holders refuse to "authorize" user modification of works or technologies

Platform discrimination
• Incumbent Internet carriers threaten the neutral communications platform
– "They use my lines for free -- and that's bull," Ed Whitacre, SBC (2005) – Source or application blocking or preference, e.g. Comcast

Keeping platforms open
• How does user innovation challenge the incentive story behind intellectual property laws and competition policy? • How can we lower legal barriers? • How and where should we regulate to preserve democratic innovation?

Thanks!

Wendy Seltzer -- wendy@seltzer.org

Dominik Walcher – Salzburg University of Applied Sciences dominik.walcher@fh-salzburg.ac.at

Combine modules

Buy new parts for the fraction of price of complete new shoes

Select designs Rebuy of worn / broken parts

Aesthetic and Comfortable
Support of regional work No glued connections

Low rate of labor costs  profitable production in Germany / Austria

Genuine separation as base for Cradle-to-Cradle recycling / biodegradability

Production close to the market
Avoidance of long distance shipping

Research Updates (R4) Tuesday August 5 2008 11:00 - 12:30 "Openness as an Alternate IP Strategy" (Oliver Alexy, Technical University of Munich & Imperial College London) "Which Users Drive the Diffusion of a Fashion Innovation?" (Katharina Braun, Vienna University of Economics and Business Administration) "The Social Structure of Wikipedia" (Andreea Gorbatai, Harvard Business School) "The Role of Knowledge Heterogeneity and Motivation in Open Innovation Communities" (Simon Haag, University of Bern) "Visual Exploration of Project Clusters on SourceForge.net" (Nate Oostendorp, SourceForge, Inc.) "The Commons and Scientific Research" (Victoria Stodden, Harvard University) "User-Innovation - Barriers to Democratisation and IP Licensing" (Viktor Braun, MIT & Hamburg University of Technology)

Openness as an Alternate IP Strategy
Research Project Outline

Oliver Alexy1,2, Karim Lakhani3 1Technische Universität München, TUM Business School 2Imperial College London, Tanaka Business School 3Harvard Business School 2008 International User and Open Innovation Workshop Boston, MA, August 4-6, 2008

An Example of Open IP: IBM “IBM PLEDGES FREE ACCESS TO PATENTS INVOLVED IN IMPLEMENTING 150+ SOFTWARE STANDARDS Promise to not assert patent rights is single largest commitment of its kind; latest in a series of IBM patent pledges and support for open standards Armonk, NY, July 11, 2007 IBM today announced that it is granting universal and perpetual access to certain intellectual property that might be necessary in implementing more than 150 standards designed to make software interoperable.”
(IBM Press Release)

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? • Under which circumstances do they choose openness, i.e, why do they continue to be open? • Which organizational elements are important to firms choosing openness? Shifts? Learning? • What are the effects of openness (market, competition) in particular from an IP perspective (with F. Jell and T. Fischer of TUM Business School)

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
Katharina Braun, Philipp Türtscher, Nikolaus Franke

The story of the Hush Puppies
For some reason the shoes passed a certain point in popularity in the 1990ies • Brand (established in 1958) was almost dead by 1994

• • •
• • •

Kids started wearing them because no one else would Shoes became hip in the clubs and bars of Manhattan Other people got infected with the Hush Puppies “virus”
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…”

→ What was driving the growing popularity?
(Gladwell 2001)

Network research

Explanation of diffusion dynamics of such a “virus” depending on networks

500 randomly chosen users
(Barabasi, 2007)

Day 1 7 5 3

500 most active users

7 Day 5 1 3

Research Project
Study of a fashion network to examine how new styles infect a community


• •

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

 Akin to public good provision when group sometimes rejecting your voluntary contribution!

What are the conditions under which people do not leave the project even if their work is edited out?

SOCIAL STRUCTURE KEEPS THEM IN:

I have a stable group of buddies with whom I interact
 

If I co-edit with the same people on a set of articles, I am more likely to stay even if I get edited out sometimes Contrast with: I edit various articles where I encounter different people on every article

My buddies hang out with each other , too
 

If my co-editors work together a lot, I am more likely to stay even if I get edited out sometimes Contrast with: I edit with the same people, but each of them is interested in different articles

DATA AND MODEL

Data
1,679,399 edits, Jan - June 2004, English Wikipedia  Eliminated vandalism, reverts, bots and anonymous users  1,213,148 contributions from 14,221 registered editors  239,161 articles

Random effect estimation

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

Idea competitions as a method for open innovation

How does it work? • Companies announce their projects in a virtual community • User design ideas together • Companies evaluate the solutions and award prizes to the best ideas

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

Details on the study

 Data collection: Online questionnaire to community members User profile Server log-files  Sampling and response rate: Sampling of frequent posters (three or more postings) Response rate: 85 % (n=113)  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

Financial Incentive Fun

0.77*** Activity Level 0.46*** Motivation

Level of Monetary Reward

Self Affirmation

*** = significant at 0.01-level 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

Implications for open innovation communities

To obtain a high activity level within the community it is necessary to provide both financial incentives as well as enjoyment. The posted projects should challenge the innovators to prove their skills and creativity in order to achieve the desired self affirmation. As an individual’s knowledge heterogeneity positively impacts the activity level within a community, the community building process should focus on attracting users with diverse functional backgrounds and interests.

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 & nonmembers 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

• 

The Plone Collective, Archetypes, Plone Internationalization Effort, ZCoMIX - CMI for Zope, Plone, MailManager, Ingeniweb Products, Zope Group Calendar

Pretty Pictures: Gene Ontology

• 

Gene Ontology, Turnkey, Generic Model Organism System Database, biopackages, SQL Fairy, Apache::MP3, nelsonlab, Sequence Ontology, Open Biomedical Ontologies

What you can see up close:
•  These projects have several members in common, yet two heavy participants have non-member status

Network Time Animation
•  Animation at http://sfnetworkviz.sourceforge.net

•  Each participation has a time component, can “bin” into 1 month frames •  Animation Reveals:
–  light and heavy months of participation –  projects starting independently and integrating over time –  point at which membership becomes “locked” –  Slowdown as projects mature

Understanding Incentives to Contribute to the Commons
MIT User and Open Innovation Workshop August 4-6, 2008

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

Dr. Viktor Braun Visiting Scholar 2007-2008 Sloan School of Management Massachusetts Institute of Technology

Professor Cornelius Herstatt Institute of Technology & Innovation Management Hamburg University of Technology

User-Innovation – Barriers to Democratisation and IP Barriers

Focus on User-Innovation
– Academic
• Studies • Special Issues • Democratizing Innovation, von Hippel

– Mainstream non-academic literature
• The Wisdom of Crowds, Surowiecki • The Wealth of Networks, Benkler • Wikinomics, Tapscott and Williams

– 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
• Growth of Global Intellectual Property Rights: Difficulty of Access • Corporate Resistance to users usurping innovative role
– Technological Control Mechanisms – Restrictive Contracts – Controlling Platforms

• 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:
• • • • Analyze current impediments/barriers to user-innovation Test these empirically in different industries Determine the factors affecting the dynamics of user-innovation Scrutinize how licenses can be used to allow enhanced user-manufacturer collaboration

User-Innovation – Barriers to Democratisation and IP Barriers

• The book is expected to be published in the late autumn of this year. • Thank you for your attention! • Contact Details:

Dr. Viktor Braun viktor@drbraun.us

Professor Cornelius Herstatt c.herstatt@tuhh.de

Last Name Alexy Ali Amjad Antorini Arazy Bae Baldwin Bateman Bauer Belbaly Benbya Bessen Bogers Braun Braun Bray Burgaard Cai Carter Chai Chapman Chatterji de Jong Diener Dorosh Eisenmann Ettinger Evers Fauchart Ferrers Fjeldstad Fleming Flowers Franke Frederiksen Frey Füller Funke Furtmüller Gault Gil Gomulya Gorbatai Gross

First Name Oliver Ayfer Iram Yun Mi Ofer Sung Joo Carliss Chester Julia Nassim Hind James Marcel Viktor Katharina David Peder Yuanfang Anne Kah-Hin Kristen Aaron Jeroen Kathleen Daria Tom Elfi Steffen Emmanuelle Richard Oystein Lee Steve Nikolaus Lars Karsten Johann Thomas Klaus Fred Nuno David Andreea Uwe

Institution Technical University of Munich & Imperial College London Harvard Business School Massachusetts Institute of Technology Aarhus School of Business University of Alberta Massachusetts Institute of Technology Harvard Business School Oregon State University Vienna University of Economics and Business Administration Montpellier Business School Montpellier Business School Boston University School of Law EPFL Hamburg University of Technology Vienna University of Economics and Business Administration Massachusetts Institute of Technology Innovation Lab Drexel University Brandeis University National University of Singapore SourceForge, Inc. Duke University Erasmus University RWTH Aachen University Fashion Institute of Technology & University of East London Harvard Business School University of Twente Technical University of Berlin University of Lausanne University of Queensland BI-Norwegian School of Management Harvard Business School University of Brighton Vienna University of Economics and Business Administration Imperial College London University of Bern Innsbruck University Vienna University of Economics and Business Administration Linz University International Development Research Centre Manchester Business School University of Washington Harvard Business School RWTH Aachen University

Email alexy@wi.tum.de aali@hbs.edu irumak@mit.edu yma@asb.dk ofer.arazy@ualberta.ca sjbae@mit.edu cbaldwin@hbs.edu chester.bateman@gmail.com julia.bauer@wu-wien.ac.at n.belbaly@supco-montpellier.fr benbya@gmail.com jbessen@bu.edu marcel.bogers@epfl.ch vfb@mit.edu katharina.braun@wu-wien.ac.at d_bray@mit.edu Peder@innovationlab.net caiyuanfang.cs@gmail.com carter@brandeis.edu iseckh@nus.edu.sg kchapman@corp.sourceforge.com ronnie@duke.edu jjo@eim.nl diener@tim.rwth-aachen.de dbas@mindspring.com teisenmann@hbs.edu e.ettinger@utwente.nl evers@cs.tu-berlin.de e.fauchart@bluewin.ch r.ferrers@business.uq.edu.au oystein.fjeldstad@bi.no lfleming@hbs.edu sf29@sussex.ac.uk nikolaus.franke@wu-wien.ac.at l.frederiksen@imperial.ac.uk frey@imu.unibe.ch johann.fueller@hyve.de thomas.funke@gmail.com

fgault@idrc.ca nuno.gil@mbs.ac.uk dgomulya@u.washington.edu agorbatai@hbs.edu gross@tim.rwth-aachen.de

Last Name Gruber Grubhofer Haag Hader Haefliger Halkett Hassan Hatta Henkel Herstatt Hienerth Hilgers Hill Howison Hyde Ihl Jaeger Jeppesen Jin Jung Kaiser Kamp Keinz King Klausberger Koen Lakhani Lampe Leimueller Lettl

First Name Marc Susanna Simon

Institution EPFL Copenhagen Business School University of Bern Vienna University of Economics and Christopher Business Administration Stefan ETH Zurich Richard NESTA Salah George Washington University Masayuki University of Tokyo Joachim Technical University of Munich Cornelius Hamburg University of Technology Christoph Copenhagen Business School Dennis RWTH Aachen University Massachusetts Institute of Benjamin Mako Technology James Syracuse University Ben Apache Foundation Christoph RWTH Aachen University Peter ETH Zurich Lars Copenhagen Business School Chen Zhejiang University Vienna University of Economics and Stephan Business Administration Vienna University of Economics and Ulrike Business Administration Gerrit Stevens Institute of Technology Vienna University of Economics and Peter Business Administration Andy Harvard Business School Vienna University of Economics and Katharina Business Adminstration Peter Stevens Institute of Technology Karim Harvard Business School Cliff Michigan State University Gertraud Harvard University (Alumna) Christopher Aarhus School of Business Singapore Management University & University of Pennsylvania EPFL RWTH Aachen University Harvard Business School University of Bern Massachusetts Institute of Technology Harvard University LMU Munich U.S. Bureau of Labor Statistics Hannan University Massachusetts Institute of Technology Massachusetts Institute of Technology University Erlangen-Nuremberg

Email marc.gruber@epfl.ch susanna.grubhofer@gmx.at haag@imu.unibe.ch Christopher.Hader@wu-wien.ac.at shaefliger@ethz.ch Richard.Halkett@nesta.org.uk hassan@gwu.edu mhatta@gnu.org henkel@wi.tum.de c.herstatt@tuhh.de ch.ino@cbs.dk hilgers@tim.rwth-aachen.de mako@mit.edu james@howison.name bhyde@pobox.com ihl@wi.tum.de pejaeger@ethz.ch lbj.ivs@cbs.dk cjhd@zju.edu.cn Stephan.Jung@wu-wien.ac.at ulrike.kaiser@wu-wien.ac.at gkamp@stevens.edu Peter.Keinz@wu-wien.ac.at aking@hbs.edu katharina.klausberger@wu-wien.ac.at pkoen@stevens.edu klakhani@hbs.edu lampecli@msu.edu gertraud.leimueller@winnovation.at lettl@asb.dk

Levine Lhuillery Lindgens Llanes Lüthje MacCormack Maclay Mayrhofer Meyer Mizuno Mollick Mortensen Möslein

Sheen Stephane Evalotte Gaston Christian Alan Colin Philip Peter Manabu Ethan Mark Kathrin

sslevine@gmail.com stephane.lhuillery@epfl.ch lindgens@tim.rwth-aachen.de gllanes@eco.uc3m.es luethje@imu.unibe.ch amaccormack@hbs.edu cmaclay@cyber.law.harvard.edu mayrhofer@cdtm.de meyer.peter@bls.gov d-mizuno@xj9.so-net.ne.jp emollick@mit.edu markm@mit.edu kathrin.moeslein@hhl.de

Last Name Murray Nakamura Neyer Nov Nuvolari Ogawa Ohashi O'Mahony Oostendorp Otner Paquette Perkmann Piller Ponnamma Divakaran Pötz Raasch Roiser Rossi Lamastra Roy Sánchez-González Schaan Schiele Seltzer Shah Sharif Shaw Snow Sobel Spaeth Stephens Stodden Strandburg Thom Thomke Tomlinson Torrance Tripsas Tucci Tuertscher Turk Ujjual

First Name Fiona Tsuyoshi Anne-Katrin Oded Alessandro Susumu Hiroshi Siobhan Nate Sarah Scott Markus Frank Pradeep Kumar Marion Christina Susanna Cristina Raja Gloria Susan Holger Wendy Sonali Azita Aaron Charles Jon Sebastian Susie Victoria Katherine Nico Stefan John Andrew Mary Christopher Philipp Ross Vandana

Institution Massachusetts Institute of Technology Tokyo Keizai University University Erlangen-Nuremberg Polytechnic University of NYU Eindhoven University of Technology Kobe University University of Tokyo UC Davis SourceForge, Inc. London School of Economics University of Maryland Imperial College London RWTH Aachen University Aarhus School of Business Copenhagen Business School Hamburg University of Technology Vienna University of Economics and Business Administration Politecnico di Milano Tulane University University of León Statistics Canada Jacobs University Bremen Harvard University University of Washington Daedalus Software, Inc. & HBS '00 Harvard University Pennsylvania State University SourceForge, Inc. ETH Zurich Eli Lilly Harvard University DePaul University College of Law Deutsche Telekom Harvard Business School AICAD & Parsons the New School for Design University of Kansas School of Law Harvard Business School EPFL Vienna University of Economics and Business Administration SourceForge, Inc. University of Sussex Boston University & Massachusetts Institute of Technology K.U. Leuven Vienna University of Economics and Business Administration Aarhus School of Business

Email fmurray@mit.edu nakamura@tku.ac.jp anne-katrin.neyer@wiso.uni-erlangen.de onov@poly.edu a.nuvolari@tue.nl ogawa@kobe-u.ac.jp ohashi@e.u-tokyo.ac.jp somahony@gsm.ucdavis.edu noostendorp@corp.sourceforge.com S.M.Otner@lse.ac.uk spaquett@umd.edu markus.perkmann@gmail.com piller@tim.rwth-aachen.de prad@asb.dk mp.ino@cbs.dk raasch@tu-harburg.de susanne.roiser@wu-wien.ac.at cristina1.rossi@polimi.it rroy@tulane.edu gloria.sanchez@unileon.es susan.schaan@statcan.ca holger.schiele@ufo.uni-hannover.de wendy@seltzer.org skshah@u.washington.edu ASharif@DaedalusSoftware.com ashaw@cyber.law.harvard.edu csnow@psu.edu jsobel@corp.sourceforge.com sspaeth@ethz.ch Stephens_Susie_M@Lilly.com vcs@stanford.edu kstrandb@depaul.edu Nico.Thom@telekom.de sthomke@hbs.edu

torrance@ku.edu mtripsas@hbs.edu christopher.tucci@epfl.ch philipp.tuertscher@wu-wien.ac.at rturk@corp.sourceforge.com v.ujjual@sussex.ac.uk

Van Alstyne van Looy Vandor Vikram

Marshall Bart Peter Hirendra

mva@bu.edu bart.vanlooy@econ.kuleuven.be peter.vandor@wu-wien.ac.at hivi@asb.dk

Last Name Villarroel von Hippel Voss Vujovic Wagner Walcher West Winston Smith Woolley

First Name Andrei Eric Georgina Sladjana Stefan Dominik Joel Sheryl Jennifer

Institution EPFL Massachusetts Institute of Technology University of Brighton Aarhus School of Business LMU Munich Salzburg University San Jose State University Temple University Santa Clara University

Email andrei.villarroel@epfl.ch evhippel@mit.edu g.s.voss@brighton.ac.uk slv@asb.dk swagner@bwl.lmu.de dominik.walcher@fh-salzburg.ac.at Joel.West@sjsu.edu swinston-smith@umn.edu jenniferwoolley@yahoo.com