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HBS - MIT User and Open Innovation Workshop 2008

August 4-6, 2008
Harvard Business School, Boston, MA

Short Presentation Slides

Track Title Page
1 Lead User and User Innovation 2
2 Policy and User Entrepreneurship 43
3 Communities 74
4 Communities 99
5 Open Innovation 128
6 Intellectual Property 153
7 Open Source 183
8 Lead User and User Innovation 213
9 Open Innovation 251
10 Intellectual Property 295
11 Communities & Open Source 326

Research Update 1 372
Research Update 2 398
Research Update 3 423
Research Update 4 461

List of Attendees 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 User Side

Manufacturer User
Learning Learning

Language A Language B

Learning in
Joint Product
Development
Projects
The influence of language difference on joint
product development

Manufacturer User
Learning Learning

Language A Language B

Learning in
Joint Product
Development
Projects
Empirical Evidence
• Field study with a Canadian manufacturer of custom-made
enclosures
• Joint product development between users and the manufacturer

• Main customers
– Research labs and new product development teams & low-volume
manufacturers
– E.g. Boeing, IBM, three divisions of NASA, UCLA, Stanford University and MIT,
etc.
• Interviews at the manufacturing site (Sales support, Tech support,
etc.)
• Interviews with representative users
• Analysis of archival data
– Customer Relationship Management (CRM) & Order Management System (OMS)
– 899 projects
– 8400+ emails and call logs (5%)
Joint Development Projects
Type of
Interaction

Initial Contacts

Orders
2.74 hrs
Design Iteration

CAD Drawing
Confirmation Avg. 82 hrs

Manufacturing

Shipping 185 hrs

Templating

Duration
N = 899 projects
Communication Pattern
700
642
Number of Communication Instances

600

500

396
400
368

Frequency
300

200

104
100

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

Project Phases n = 1510
74 call logs (5%)
Local learning – Language acquisition
Customer At 06:07 AM 4/26/2005, you wrote:

Representative 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

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

sean

Hello Sam,
Customer The e-drawing is a 3d model of your rackmount. The e-drawing will give you
the opportunity to evaluate your part before we take it into production.
Representative You can view the e-drawing with your regular Internet browser.

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 PRICE
DESIGN
250
SHIPPING

200 LANGUAGE
COMMUNICATION
150 FEEDBACK

100

50

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

Project Phases
The Role of Physician Innovation, Collaboration and
Entrepreneurship in the Medical Device Industry

Aaron K. Chatterji
Kira Fabrizio
Duke University
Fuqua School of Business
This work is part of a research agenda on the
knowledge sources for innovation and entrepreneurship

 Dissertation work
 Spawning
 Several cases of doctors inventing devices and starting companies
 How important is “user innovation” in the medical device
industry?
 Extent and impact (under review)
 Conflicts of interest (under review)
 How do corporations access and exploit user knowledge?
 Exploration vs. Exploitation (preliminary results)

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

Printed Circuit CAD 136 24.3%
Urban and von Hippel (1988)
Pipe Hanger Hardware 74 36%
Herstatt and von Hippel (1992)
Library IT Systems 102 26%
Morrison et al (2000)
Software security features 131 19.1%
Franke and von Hippel (2003)

Surgical Equipment 261 22%
Lüthje (2003)
Consumer products n % innovating

Outdoor Products 153 9.8%
Lüthje (2004)
“Extreme” sports equipment 197 37.8%
Franke and Shah (2003)
Mountain biking equipment 291 19.2%
Lüthje et al (2002)
Source: Von Hippel (2005, p. 20)
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 Perception of the
Need Innovation’s
Dissatisfaction w/ Current Attributes
existing products
Value/ benefit P 1a, b Relative Advantage
seekers Compatibility
Capabilities Complexity
Motivation Trialability Diffusion
Experience Observability Rate
Usability
P 3a, b Communicability Intent to
Purchase

P 4a, b Intent to
Ideal Innovation’s Communicate
Expected
Opinion Leaders WOM
Attributes
Characteristics
Relative Advantage
Knowledge Compatibility
Social Influence P 2a, b Complexity
Community Active Trialability
Innovativeness Observability
Information Sharing Usability
Creativity Communicability

Control Variables
Socio-Economic, Demographic, and Marketing Mix Variables
Copyright © 2007, Salah S. Hassan, Ph.D. All rights reserved
Operationalization of the Research Model

Lead Users
1st Stage
Characteristics
Need
Dissatisfaction w/
existing products
Value/ benefit seekers
Capabilities
Motivation
Experience
Radical
Participation
in a TIC*
Ideas / Ideal
Innovation
Opinion Leaders
Characteristics
Knowledge
Social Influence
Community Active
Innovativeness
Information Sharing
Creativity Control Variables
Socio-Economic, Demographic, and Marketing Mix Variables

* TIC, Tookit for Idea Competition, see Piller and Walcher, 2006

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 8 clustered
innovative Laptop
76 ideas
collected

Expert Panel

Ideas above the mean
Operationalization of the Research Model
Lead Users 2nd stage
Characteristics
Need
Dissatisfaction w/
existing products TIC ideas
Value/ benefit
seekers
Capabilities
Motivation
Experience • Intent to
Evaluation
of Existing
Purchase
versus • Intent to
Opinion Leaders
Characteristics Ideal Communicate
Knowledge Innovation WOM
Social Influence
Community Active
Innovativeness
H1 and H2 H3 and H4
Information Sharing
Creativity
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 Bell-shaped
Leaders Frequency
curve

_ _ _ _
0 x - 2sd x - sd x x + sd
Time
THANK YOU!
Salah S. Hassan, Ph.D.
Chair & Professor of Marketing
School of Business
The George Washington University
E-mail: hassan@gwu.edu
Cornelius Herstatt, Christina Raasch Hamburg University of Technology

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

8
Age of winning design in years

: International
7
championships
(world or European)
6
▲: National
5 championships
(Australian or UK)
4

3

2

1

0
1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Year of championship

• 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 Hull Foils Rigging
activity

1960 1970 1980 1990 2000 2010

User Proliferation of glass Decreasing benefits ?
activity fibre reinforced plastic, to incremental
later carbon improvements
declined
due to
Standardisation Manufacturer forcing
rules “one-design“

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

Source: C. Herstatt, C. Raasch - 3-
Implications for ‘dynamically expandable’ design spaces

Technology
maturity
In our case study we find…
High
• A re-focusing of user activity
Technology
after exogenous or endo-
Market
complexity concentration genous changes in the
High High innovation environment

User • No mining-out of the entire
Innovation design space
Activity
Customer
High Innovation
satisfaction This suggests that, given
barriers
High High a supportive environment,
Low 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

A No Innovation
B Singleton User Innovation Only
B A C Producer Innovation Only
D SUI and Producer Innovation Coexist
E SUI OR Producer Innovation
Com- F Collaborative User Innovation Only
muni- G CUI and Producer Innovation Coexist
cation H CUI and SUI Coexist
cost, b I All Three Forms Coexist
E

D
C

G
I F
H
Design cost, d
Slide 4 © Carliss Y. Baldwin and Eric von Hippel 2008
This demonstrates the limits of
modeling…
Come to our session to see what we
plan to do instead!
UserThe
Innovation in the
New Inventors UK
Working to change the linear view of innovation

Steve Flowers
CENTRIM
University of Brighton
CENTRIM/SPRU
Overview
• Inform academic & policy community
– Linear model hangover
• Explore user innovation in UK context
• Case studies
• Metrics and indicators
• Questions:
– value, measurement, relevance,
significance…etc
CENTRIM/SPRU
Policy recommendations

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
“As ecosystem
a strategic investor, JJDCto help accelerate
invests the pace
in companies oftechnologies
with innovation, driven
that by
“The whole address
“Leveraging idea
ever-advancing
potentially iscustomer
tomajor
our hybridget aunmet
pulse
internal and
needs” of external
the industry….the
(IBM
medical VPresearch
needs. investment
JJDCmodel
corporate will group
to identify,
strategy,
seek Claudia
to was
Fanits
maximize
the eyes
nurture
Munce,
return on and
and
in ears
The of Medtronic.”
commercialize
MoneyTree™,
investment, similar (Michael
promising
any Ellwein,
new VC.
other former and
technologies”
to PricewaterhouseCoopers
” Chiefthe National
Development Officer)
Venture Capital Association, 2006)

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

8/4/2008 CVC and Entrepreneurial Clinicians 3
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. DeBakey sewing
Dr.Lillihei with Dacron aortic grafts on
external pacemaker. his wife’s sewing
Circa 1957 machine. Circa 1953

8/4/2008 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

8/4/2008 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

8/4/2008 CVC and Entrepreneurial Clinicians 6
Intro Methods Model & Data Results Conclusions Extra

Sample selection

Avg Per Rank Rank
No. of No. of Avg Per Deal Comp Avg Per Firm Sum Inv. (all VC in (device comp.
Firm Name Deals Comp (USD Mil) (USD Mil) (USD Mil) (USD Mil) industry) CVC)
Johnson & Johnson
58 37 1.93 3.03 112.13 112.13 20 1
Development Corporation
Medtronic, Inc. 33 22 2.41 3.62 79.56 79.56 46 2
Boston Scientific Corporation
22 14 3.52 5.54 77.55 77.55 70 3

Guidant Corporation 20 10 3.68 7.37 73.70 73.70 78 4
*1987-2007

 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
(1) (2) (3) (4)
variable: c_ij
0.048413 0.051628 0.047933 0.0472726
pat_j
(5.02)*** (5.32)*** (4.64)*** (4.52)***
H1: CVC
0.939814 0.847496 0.631986 0.6757906
investment is invest
(3.21)*** (2.88)*** (2.05)** (2.10)**
associated 0.570657 0.570582 0.53324
with user
------ (2.16)** (2.17)** (1.89)*
innovation 1.486823 1.459434
acquire_cvc
performance ------ ------ (2.87)*** (2.79)*** H2: CVC investment in
directly acquire_nocvc
0.3367666 entrepreneurial user
------ ------ ------ (1.00)
relevant to founded companies
firm dummies Yes Yes Yes Yes
investing firm should perform better
0.23686 -0.13544 -0.0583 -0.0786359
cons
(0.64) (-0.40) (-0.17)8 (-0.22)
than investment in
non-user founded
companies
no. obs. 449 449 449 449
Log
-853.14356 -850.3077 -847.01525. -846.71006
psuedolikelihood
Wald chi2 62.97 71.68 69.36 71.75
Negative binomial regression estimators with heteroskedasticity-consistent standard errors
(t-statistics in parentheses)
*
p < 0.10.
**
p < 0.05
***
p < 0.01

8/4/2008 CVC and Entrepreneurial Clinicians 8
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

8/4/2008 CVC and Entrepreneurial Clinicians 9
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
 U-shaped relationship
• (-) sign on ln(cvc), (+) sign on ln(cvc)2
• Invest in most exploratory research, least like existing internal body of knowledge?
• As invest further, likelihood of citation increases…
• Have knowledge to build on now from prior investment?

CVC investment by rivals
 Decreased innovation performance
 “Competitive strategic” investment

8/4/2008 CVC and Entrepreneurial Clinicians 10
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
 Professional-user:
 Embedded in organization
 Uses product in professional life
 Create innovation in different industry as
organization.
Summary: Process of Professional-User
Innovation Commercialization and
Entrepreneurship
Firm internalizes
production of innovation

No additional Firm partners with
innovation another to produce
needed innovation

Professional- user Internal Firm sells IP of
Innovation
creates innovation demand innovation to firm to
solves problem
to meet need remains produce

Firm sells IP of
innovation to professional-
user to spin-off
Propositions
Firm internalizes
production of innovation

No additional Firm partners with
innovation another to produce
needed innovation

Professional- user Internal Firm sells IP of
Innovation
creates innovation demand innovation to firm to
solves problem
to meet need remains produce

Firm sells IP of
innovation to professional-
user to spin-off
Implications
 Finds that professional-user innovators are sources
of technological development, intrapreneurship,
and entrepreneurship.
 Explores the options that a firm has with
professional-user innovations
 Provides insight into processes that occur prior to
the founding of a firm.
Track 3: Communities (Hawes 202)
Monday Aug. 4 2:00 - 3:30
"Revisiting Generalized Exchange: Extending Theory to Understand Wikipedia, Open
Source & Other Collaborative Communities" (David Gomulya, University of
Washington)
"Status Effects in Technological Communities" (Lee Fleming, Harvard Business
School) *
"How are users’ membership in brand communities influencing them as innovators?"
(Yun Mi Antorini, Aarhus School of Business)
"The Challenge of Knowledge Novelty and Reuse in Distributed Innovation" (Karim
Lakhani, Harvard Business School)

"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
>250 sets
>850 sets
Space
Castle Town
>350 sets
>4.000 products Trains
Yahoo!
Group Group LEGO set LEGO set
message database reference …
Yahoo!
… …
Group
EJTC LEGO
Recent 7 days sets
FGLTC Official >6.000 sets inventoried
Recommended ranked
LEGO sites Group Peeron >12.000 unique
group messages Group
message message Guide to parts listed
… Train Clubs LEGO products Parts
Yahoo! reference
> 500 links …
Group …

Spotlight Shopping
… Robotics
Links guide
LEGO Jeff
listings Hall

Auctions >3.500 member
Marketplace profiles
Members Jeff
… Block
Bricklink Online
shops Andy
Dear Admin. Blau
>3.000 shops LEGO
… …
Off-topic
BrickFest

LEGO Events
Ambassadors
Forums
64 different BrickWorld
forums

74 different
Local … 1000
User groups Space Steineland
DK CAD Help/FAQ
Trains …

Israel Lugnet
USA FAQ
Chile Acronym
guide History of
LEGO
MY MOST IMPORTANT FINDINGS

BRANDING LITERATURE:
• Brand meanings define a “playground” within which the innovator
expresses his or hers ideas.
• Brand meanings help innovators distinguish between “great
creations” and “old trash”, “pure” and “poor” innovations, “useful” and
“non-useful” product improvements.

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
standings
rules
1 Carliss
view entry
2 Stefan
Carliss
3 Eric
fcn f(x)
...

standings Joachim
fcn f(x)
1 Joachim ...
2 Carliss
3 Stefan
4 Eric
new entry

4
Nathan says…
Well, this is my first
MATLAB contest and it is
giving me far too much
enjoyment. It's one of the
most addictive and
compulsive things I have
tried... Also, I have
experienced physical
trembling while making the
final preparations to submit
code. Is that normal?

5
Contest Consists of Three Phases:
Darkness, Twilight and Daylight

Better

Darkness Twilight Daylight

111 Authors - 3914 Entries
6
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, opto-
electronics, 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 Insider
Diversity
Middle
25% 40% Outsider
High
35% 35%

40% 25%

45% 55%
5%
5%
55% 45%
Low

Typical
Outsider Insider Member
Function
Research Model
Functional
Diversity

H1: +
H3: +
H5a: +
Team Task Conflict Product
Quality
Functional
H5b: -
Composition

H4: -

H2: -
Typical
Function
Research Method
• Two samples of Wikipedia articles (100 and 50
articles each)
– Each article viewed as a team project
• Operationalization
– Product Quality (dependent variable): information quality
perceptions
• Different method for the 2 different samples
– Typical Function and Functional Diversity: metrics
extracted from Wikipedia
– Task Conflict: text analysis of articles’ discussion pages (3
independent raters), adapting Jehn & Mannix (2001)
instrument
Results (Sample1 / Sample2)
** = P<0.05
Functional * = P<0.10
Diversity
.34**/.60**

.24**/.37**
.48**/.71**
Team Task Conflict Product Quality
Functional
R2=14% / 20% R2=29% / 27%
Composition -.30**/-.38*

-.27**/-.32**

-.52**/-.81**
Typical
Function
Do lead users appreciate
the community
around product co-design?

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.
Co-design features Dellaert / Stremersch 2005;
• Number of base products Franke et al. 2008);
• Access to user modules user communities
• User forum (e.g. Jeppesen 2005)
• Product exchange
• Price
H2-H4: lead user theory & extensions
Expected benefit (e.g. Franke et al. 2006, Schreier /
H5a H5b Prügl 2006);
H1
Functional technology adoption
product value (e.g. Yi et al. 2006; Argawal /
Prasad 1998)
Ease of
H2 Co-design
co-designing
utility
Enjoyment of H5: benefit-attribute compatibility
co-designing H4 H3 (e.g. Chernev 2003; Ratneshwar
ε et al. 2001)
Symbolic service co-production
product value (e.g. Batson 1985; Van Raaij /
H6 Pruyn 1998)

Use Trend Product
Innovativeness H6: resource matching theory
experience position expertise
(e.g. Anand / Sternthal 1989)
Leading market position 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 Governing authority over
7-11 the project but do not gain
Elected
authority over individuals.
leaders

300-400 Member authority over the
members project and can elect a
governing body and have a
voice on project decisions.
250-600
code committers
Independent variables from
1999-2004, dependent
4200-7000
mailing list contributors
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
Member Governing
Social engagement authority authority
H1: Creating new dialogue + +
H2: Structurally central +
Coordination Work
H3: Dialogue across sub-community boundaries + +
Technical merit
H4: Technical contributions accepted in peer review +
Collaborate with a larger number of sub-
H5: communities
Gaining Lateral Authority:
Post Progression Behavior Changes
Members double their efforts!
Before member After member t-test
Measure (n=547) (n=547)
Technical merit:
Number of commits 395.30 605.53 ***
Technical collaborations 6.2413 9.3492 ***

Social engagement:
Number of new threads 9.05 11.96 **
Number of ties .0112789 .0191237 ***

Coordination:
Number of responses to threads 40.61 106.03 ***
Sub-community participation .0618159 .0826997 ***
Theoretical Contributions
Theoretical Gap:
• Few have examined how lateral authority is enacted
• Previous work shows the importance of boundary spanning
(Tushman, 1977; Ancona and Caldwell, 1992; Podolny &
Baron, 1997) but does not link to lateral authority nor need for
coordination

Our Research:
• Distinguishes between horizontal and vertical authority in practice

• 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 % of contributions
Contributors used in Rel 7.4
(Average)
Total feature 9.4
Phase 1 – 3.3 85% (42 – 100%)
Problem Definition

Phase 2 4.9 63% (33 – 100%)
Development till
first source code
committed
Phase 3 – 7.6 78% (40 – 100%)
Refinement from use
“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 % of Features Developed
Set strategic direction 0
Information hub for organization 0
Recruit and select individuals 0
Design and allocate tasks 5
Coordinate activity amongst 8
individuals
Link internal and external 0
environments (market feedback)
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 Kathleen Diener

Harvard, 5th August 2008 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. What is the most
and manufacturing; distinguishable
Fredberg et al., 2008) difference between classical innovation
networks and the concept of open innovation?
Research dilemma:
2. When
Results there
can not is openness,
been aggregated how does closeness
and compared looks
adequately like? a an overall framing is
because
lacking
3. How must an overall framework of open innovation be composed that is also
Reason:
able to include traditional concepts of collaboration and knowledge transfer?
Heterogeneity regarding the definition and understanding of open innovation
Heterogeneity regarding the operationalization of open innovation as a variable to measure

Diener/Piller – Facets of Open Innovation, Harvard, 5th August 2008 2
Research Approach
Conceptual Framework - Model of collaboration

Objective
Degree of Openness
suggesting a reliable construct of open innovation
Screening Open Call
Initiation
construct is based on the understanding OI is a continuum between closeness and openness
Facet I
derive different facets of openness of an innovation process to distinguish between various
Self selection
configurations of openTask assignment
innovation Constitution
configurations explain operational models of companies (innovation processes) which can be
considered as "open innovation", but which have a different way to incorporate external input in
the innovation process

formalized Interaction Informalized
Facet II (self organization)
Communication
Knowledge Transfer

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
important constructs
Intermediary
Manufacturer classical External Actor
Explorative analysis of intermediaries as a proxy for OI operational modes, offering classical
or/and open innovation methods to derive vs.possible facets of how to determine an open
innovation process open Innovation accelerators

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) Producer User

One of the four factors explaining the advent Supplier
of the open innovation paradigm is the
increasing competence of suppliers 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***

,32 ,91
ISUP1 ISUP2

,57 ,95
,47
,50 ,64

Innovative contri- ,49** Supplier
bution supplier inclusion

res_ res_
ISUP esi

CMIN/DF = 1,28 NFI = 0,902, CFI = 0,974, RMSEA = 0,51 *** = significant at 0,001 level (two tailed) ** = significant at the 0,05 level (two tailed) n.s. = not significant
Souce: Study “Purchasing and Innovation"
h.schiele@jacobs-univers
Entrepreneurship in Online Communities:
Lead User Characteristics, Agenda Shaping and Social
Standing

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 Suppliers Customers Rivals

Come seeintegration
more
Vertical
atX
User Innovation
User
and Firm Boundaries:
X † X
Organizing for Innovation by Users
innovation

Monday 12:20
Cumulative p.m.
innovation
X X
Anaheim Convention Center, 203B
Open
X X X X
innovation
www.JoelWest.org/AOM/2008
X = Sources of Innovation; † limited emphasis
Page: 2
Research
Our Study: Ecosystem Management
• Research says ecosystems or value networks
• Are important to value creation
• Allow coordination of the open innovation process
• Are a potential source of competitive advantage

• 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 a nd
B r a n d in g B r a n d C o m m u n it y B r
B r a nd C o m m u n it y B r a n d in g O
P r oduc t D e v e l o p m e n t C o m m u n it y D r iv e
U s e r In n o v a t io n s B r a n d C r e a t io n O
T o o l k it fo r U s e r In n o v a t io n a n d D e s ig n B r a n
C o m m u n it y D r iv e n B r a nd C r e a t io n O n l in e C
P r oduc t D e v e l o p m e n t T o o l k it fo r U s e r In n
B r a nd C r e a t io n O n l in e C o m m u n it y
T o o l k it fo r U s e r In n o v a t io n a nd D e s ig n P r oduc t

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 In n o v a t io n s
T o o l k it fo r U s e r In n o v a t io n a nd D e s ig n B r a n d C
B r a n d in g B r a nd C o m m u n it y B r a nd C o m m u n it y
B r a nd C o m m u n it y B r a n d in g O n l in e C o mmu
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Johann
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B r a nd C r e a t io n O n l in e C o m m u n it y B r
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 In n o v a t io
T o o l k it fo r U s e r In n o v a t io n a nd D e s ig n O n l in
C o m m u n it y D r iv e n B r a nd C r e a t io
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O n l in e
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U s e r In n o v a t io n s B r a nd C r e a t io
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MIT User and Open Innovation Workshop 2008 B r a n d in g B r a nJohann
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1
Harvard Business School, August 4 - 6, 2008 B r a nd C o m m u n it y B r a
Community Brand: Outdoorseiten.net

Summer Summit 2005

MIT User and Open Innovation Workshop 2008 Johann Füller, Eric von Hippel
Harvard Business School, August 4 - 6, 2008
2
Outdorseiten.net - „Placing it right on the company‘s logo...“

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).

To put it directly on the company
name is a good idea. There they are
Summer Summit 2005 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 Johann Füller, Eric von Hippel
Harvard Business School, August 4 - 6, 2008
3
ODS Community – A Valuable Brand

Favorite
ODS Non-label
Brand
WTP 56,3 € 84,5 € 24,7€
Relative Price
22.55% 33.82% 9.89%
Premium
Based on a 250 Euro Backpack

Impact of attachment and expertise on backpack label preference
β Std. Wald P
ODS vs. Favorite Brand
Error
Brand Attachment -.506* .245 4.264 .039
ODS Community Attachment .535* .219 5.952 .015
ODS community members have more outdoor experience
and expertise than does the manufacturer of my favorite .321* .134 5.719 .017
commercial backpack brand.
ODS community members have less product development &
production expertise than does the manufacturer of my - .474** .163 8.424 .004
favorite backpack brand.

R2 (Nagelkerkes) .283
Summer Summit 2005
R2 (Cox & Snell) .205
R2 (McFadden) .178
-2 log Likelihood = 188.503; χ2 = 42.639; df = 4; p=.000;
* p<0.05; ** p < 0.01; *** p<0.001
MIT User and Open Innovation Workshop 2008 Johann Füller, Eric von Hippel
Harvard Business School, August 4 - 6, 2008
4
Implications

Community brands have the
potential to drastically
transform the market

User communities are able to Community brands can
create valuable brands, meanings, become serious
and identities at no costs competitors or partners

Community brands create
new business opportunities
for design support,
production,
and logistics

MIT User and Open Innovation Workshop 2008 Johann Füller, Eric von Hippel
Harvard Business School, August 4 - 6, 2008
5
Open sources of the invention
of the airplane
Peter B. Meyer, U.S. Bureau of Labor Statistics*
* Findings and views are those of the author, not the Bureau
2008 User and Open Innovation Workshop, August 4-6, 2008

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 Pages Location
/ group ref’ing (background)

Maxim 33
Britain
(from US)
These people wrote and published and
were known to one another.
Lilienthal 31 Germany
Historical accounts refer to them
Penaud 22 France heavily.
Algeria, Egypt
Mouillard 21 (from France) The activity/network was international
Australia
Hargrave 19 (from Britain)
The Wrights became part of this
Moy 19 Britain network, then broke away.
Le Bris 17 France
Before 1903, fixed-wing aircraft
Langley 16 US patents exist, but don’t matter
Wenham 15 Britain
much. This ecosystem is open.
Phillips 14 Britain
Characteristics of this case
 Autonomous innovators (not hierarchy, not cult)
 Sharing technical info in public spaces, incl failure
 Diverse backgrounds, and objectives
 Want to fly!
 Curious
 Hope for recognition
 Hope to help bring peace, or make own nation safer)
 Imitation / collaboration from far away
 Intellectual property mostly set aside
 Role for moderator / evangelist / supporter
Micro-economic model
 Imagine self-motivated tinkerers with some project
“progress” is rewarding to them in future (in utility function)
 They’d use time, effort, money for experiments

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
FLIES were gathered,
bred & shared under
the watchful eye of
Small elite communities based Thomas Hunt Morgan
(Kohler 1988) & his
on close personal relationships former post-doc
e.g. Erdos Sturtevant

Limited number of knowledge A.H. Sturtevant in the Drosophila stock room.
inputs Courtesy of the Caltech Archives ©

Democratic on some
level, Shapin (1984)
Exchanged and accumulated has vividly described
peer-to-peer under shared norms how participation was
closely guarded & tied
& culture to being a “gentleman”
Royal Society started meeting in the mid-
Informal means to deal with 1640s to discuss the ideas of Bacon
competition, lack of reciprocity etc.
Transformation of knowledge production
necessitates emergence of formal
institutional arrangements

>> people, now dis-intermediated,
Small elite communities with with islands of personal ties
close personal relationships
e.g. Erdos, & shared pedigrees Richer mix of players e.g. firms,
user communities etc.
Limited number of knowledge >> complex legal arrangements
inputs around access, rewards & sanctions

Exchanged and accumulated Reliance upon disclosure in
peer-to-peer under shared norms publications & source code etc.
& culture
Need to access materials via
centralized repositories
Informal mechanisms to deal with
competition, lack of reciprocity etc.
Formal institutions overlay rather than
replace existing informal institutions
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. Improving access to biological materials– do
formal access institutions increase
participation in science? (Furman & Murray „08)
ii. 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  Quantitative aspect
published in one institutional
environment, BUT over time may  Identify a “piece of
SHIFT to a different one knowledge” as embodied in
a specific scientific
 Assuming SHIFT is “exogenous” publication
then observe variation in the
impact in these two institutional  Observe citations to that
environments article in other scientific
publications over time as a
 This provides a window into the measure of accumulation
impact of the institutional SHIFT (dK/dt) and code for
on knowledge accumulation different characteristics of
citers
Results - Changing Access to Research Mice

Negative Binomial Models Dep Var.
Annual
Forward
Citations
Post-Cre-lox agreement 1.709

70%
Post-NIH sharing agreement 1.132
Boost in
citations
Article Effects Fixed After
IP sharing
Age FE, Calendar Year FE, Y Agreement
Transition Window Effects enforced

 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 expert-layman
Across national boundaries:
Across industry boundaries: boundaries:
Can countries entering the global
Can firms find more effective How do different institutional
scientific community build formal &
mechanisms to exchange arrangements facilitate or limit the
informal institutional capacity for
knowledge e.g. experiment with role of non-experts in knowledge
accumulation? Do they build on
prediction markets for drug exchange e.g. patient populations
knowledge generated across the
discovery (with Peter Coles & Eric with academic or for-profit
globe e.g. analysis of China (with
Von Hippel) partners, patient advocacy e.g.
Devin Fensterheim)
www.patientslikeme.com
Managing the trade-off between
revealing and appropriating in
drug discovery: the role of trusted
intermediaries
Markus Perkmann
Tanaka Business School, Imperial College London

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 follow-
on 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)
ƒ Apple‘s IPhone: Unlocking of SIM cards, possibility to run
homebrew
ƒ Playstation Portable: Hacking allows to run homebrew software
(more than 1,400 programs listed in www.psp-homebrew.eu)
ƒ Microsoft XBOX: prime target for modifications as it is cheap and
compatible with standard PC hardware, e.g. harddisks or RAM

„ Often user communities develop high-quality software
Often,
ƒ Playstation Portable: first web-browser developed by community
ƒ XBOX Media-Center p ported to LINUX and Mac-OS

„ However, modifications also allow to run pirated software
Piracy and Outlaw Community Innovation / Slide 2
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
homebrew software for
Microsoft XBOX

„ More than 300
300.000
000 registered users/ participants

„ 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 xbox-
xbox
scence.com

„ More than 2
2.000
000 responses – 1.396
1 396 complete questionnaires

Piracy and Outlaw Community Innovation / Slide 6
Descriptives – Dependent Variable (Piracy)

„ Respondents were asked to indicate the number of
ƒggames for the xbox they
y own ((original
g AND copies)
p )
ƒ 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 mean sd Median min max
All games 1396 58.28 69.83 40 1 500
Original games 1396 13.00 24.67 7 0 410
Pirated games 1396 45 28
45.28 67 14
67.14 25 5
25.5 0 500
Share of pirated
games 1396 0.64 0.35 0.78 0 1

Piracy and Outlaw Community Innovation / Slide 7
Findings
„ Two types of participants in outlaw community with different
motivational background
g identified
ƒ Innovators: Contributing hacks and software to community
ƒ 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 anti-
anti
piracy climate in user communities

„ Managerial implications
ƒ Yes, community participants pirate!
ƒ No, communities do not encourage this behavior!
ƒ 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 Rigor cycle
Requirement Grounding
Field testing 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 Natural Science
OSS
research Develop Build Justify Evaluate
Design cycle

Applicable knowledge
Business needs

Relevance cycle Rigor cycle
Rigor/ Requirement Grounding
Relevance Addition to KB
Field testing

OSS
business
People Organizations Technology Foundations Methodologies

Environment 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
 Phase Two
 Interrelations between motivation, contribution, and institutional arrangements
 Literature review
 Shortcomings
 Phase Three
 Alasdair MacIntyre and the role of social practice in the history of FLOSS
 Motivation between social practice and institutions
 Research questions for understanding motivations as a result of a social practice

Stefan Haefliger | Strategic Management & Innovation | shaefliger@ethz.ch 2
Phase One - Literature review

Stefan Haefliger | Strategic Management & Innovation | shaefliger@ethz.ch 3
An Alternative Framework for Motivation

 Craft motives  Compensation  Moral concern
Motives
 Desire to achieve  Desire for rewards  Contributions to the
expertise and technical including money greater good
skills  Reputation  Responsibility to
 Wish to extend the  Power observe ethical
social practice, innovate standards
 Compensation motives
and develop improved  Obligations towards
don’t have to be self-
standards of excellence other practitioners and
interested
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

Compensation
Craft motives Moral concerns
motives

Social Practice
Collective

Goods

Institutions

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 Organizational
Requirements 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 Propagation Cost = 21.7%
©Alan MacCormack, John Rusnak, Carliss Baldwin 2007 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% Propagation Cost = 42.5%

©Alan MacCormack, John Rusnak, Carliss Baldwin 2007 7
Open Source Architecture

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

Propagation cost =7.2% Propagation cost = 21.8%

©Alan MacCormack, John Rusnak, Carliss Baldwin 2007 8
Open Source Architecture

Results: Hypothesis True in 4/5 cases
Open (Distributed) Closed (Proprietary) Test Stat
(MW-U)
1: Financial Mgmt 8.8% 42.5% p<0.1%

2: Word Processing 2.8% 29.7% p<0.1%

3: Spreadsheet 23% 4.1% p<0.1%

4a: Operating System 7.2% 21.8% p<0.1%

4b: Operating System 7.4% 19.1% p<0.1%

5: Database 9.4% 33.6% 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%
Analysis Method:
Icaza, 6.0% Count appearances in the
Goldberg, 38.1%
feature/change log
Meeks, 6.9%
(not all projects have this)
Tigelaar, 2.6%
Iivonen, 2.4%
One person does ~40% of the work
Hellan, 5.9%
Four people do ~90% of the work
Guelzow, 6.9%
Welinder, 18.4%
2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 Total
Goldberg 29.2% 32.2% 35.4% 48.7% 43.9% 41.2% 55.0% 46.2% 14.2% 38.1%
Welinder 37.9% 46.4% 32.8% 25.6% 22.0% 18.8% 10.8% 9.5% 11.9% 1.0% 18.4%
Guelzow 18.5% 3.8% 0.3% 9.0% 21.8% 17.9% 3.4% 6.9%
Hellan 2.0% 5.0% 6.8% 5.3% 5.9% 13.0% 4.4% 8.2% 0.9% 5.9%
Iivonen 0.9% 0.6% 3.7% 10.2% 2.4%
Tigelaar 0.2% 11.5% 4.4% 2.6%
Meeks 0.1% 0.2% 10.8% 30.6% 7.7% 6.9%
Icaza 0.1% 5.3% 20.7% 58.8% 6.0%
Kasal 0.3% 11.9% 2.5% 1.0%
Others 12.4% 12.3% 12.9% 8.8% 6.3% 7.9% 14.1% 12.0% 11.5% 32.5% 11.7%
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 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 (von Hippel, 1988; 2005)

• Radical and incremental innovation (e.g., Hollander, 1965; Riggs & von Hippel, 1994; Rosenberg,
1982; von Hippel, 1976)

• Many improvements from (deliberate) learning by doing (Argote, 1999; Dutton &
Thomas, 1984; Hatch & Mowery, 1998; Pisano, 1997; von Hippel & Tyre, 1995)

• Production floor workers as source of innovation

• Innovation-promoting practices (cf. Garvin, 1993; Laursen & Foss, 2003; Leonard-Barton, 1992;
Scott & Bruce, 1994; Subramaniam & Youndt, 2005)

• Research question:
– What are the firm-level capabilities and practices that promote innovation
in user firms and what is the role of learning by doing?
(What drives learning by doing and thereby process innovation?)

Marcel Bogers User and Open Innovation Workshop
“Process Innovation in User Firms: Promoting Innovation through Learning by Doing” August 4-6, 2008 2
5-min abstract presentation HBS - Boston, MA
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,
1998; Lee et al, 2004; Milgrom & Roberts, 1992; Thomke, 1998; 2003; von Hippel, 1994; von Hippel &
Tyre, 1995)

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

– Monitoring and support (Baron & Kreps, 1999; Garvin, 1993; Leonard-Barton,
1992)

– Incentives and rewards (Amabile, 1996; Baron & Kreps, 1999; Deci & Ryan,
1985; Edmondson, 1999; Ichniowski et al., 1997; Lee et al., 2004; Milgrom & Roberts, 1992)

Marcel Bogers User and Open Innovation Workshop
“Process Innovation in User Firms: Promoting Innovation through Learning by Doing” August 4-6, 2008 3
5-min abstract presentation HBS - Boston, MA
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 & Learning by Process
practices doing 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 User and Open Innovation Workshop
“Process Innovation in User Firms: Promoting Innovation through Learning by Doing” August 4-6, 2008 4
5-min abstract presentation HBS - Boston, MA
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 User and Open Innovation Workshop
“Process Innovation in User Firms: Promoting Innovation through Learning by Doing” August 4-6, 2008 5
5-min abstract presentation HBS - Boston, MA
Innovating
online Dec 2008 e-recruiting services –
an Austrian case study
online May 2008
Elfi Ettinger
University of Twente, Netherlands
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 e-
recruiting
•Slow business
networks
8/8/2008 3
The many problems
Large numbers of e-recruiting platforms fail…

– Job crawler
– Up-to date profiles
– Matching
– Skill Ontology
– Wiki learning systems
– Responsiveness & speed of applicant pools
– Clicks compared to competitors
– Relevant applications
– Push services
– Service, Information & System Quality varies

8/8/2008 4
Preliminary Findings

• 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).

8/8/2008 7
Give me power and I‘ll give you love:
exploring consumers’ company attachment in
mass customization
Ulrike Kaiser and Martin Schreier
WU Vienna University of Economics and Business

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-product-
dyad. (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
Study 1

than customers of a standard product.
• Attachment matters: MC customers are willing to pay a
premium of 54% for brand extensions (cereal bar).

Customer Behavioural
Integration Company Outcomes (WTP for
Attachment
(MC vs. Non-MC) H1 (+) H2 (+) brand extension)
 
Argument 1: Preference fit Argument 2: Customer Empowerment
• MC products deliver superior customer • Personal accomplishments are achieved
value because the customer gets exactly by satisfying the need for autonomy and
what s/he wants. (Addis and Holbrook 2001;Pine competence. (Dahl and Moreau 2007)
1999; von Hippel 2001; Wind and Mahajan 1997)
• Relational inputs that make a person feel
• As a result, customers are locked into autonomous and competent promote
long-term, strong relationships. (Peppers stronger attachments. (Ryan and Deci 2000;
and Rogers 1997; Pine, Peppers, and Rogers 1995) Thomson 2006)
© User Innovation Research Initiative Vienna (www.userinnovation.at) 3
Overview of Empirical Studies (II)
We explore the customer-manufacturer relationship in three empirical studies.
Experiment with mymuesli.com (n=130)
• Customers of MC form stronger attachments to the company
Study 1

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
Study 2

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
Study 3

• Findings are robust if we manipulate product category
[hedonic/utilitarian] and product category involvement
[low/high]

© User Innovation Research Initiative Vienna (www.userinnovation.at) 4
Practical Implications
Mass customization is a powerful instrument to lock customers into an affective, long-
term 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)

Basic Oxygen Crude Steel
Blast Furnace (Ingot)
(BOF)
Pig
Iron

BOF substantially reduced
Steel Refining Process
operation time to 45 minutes Steel Products
from 6 hours with OHF.

“The BOF was the greatest
Our Focus
breakthrough in steel refining
1950s to 1960s 2
in the last century”
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
- do not know their real preferences and/or
would have wanted…
- 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 H1 (+)
Perceived benefit
(based on measured
preferences)

H2 (+) H3 (+) H4 (+)
Ability to
Preference Product
express
insight involvement
preferences
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 H1 (+)  Perceived benefit
(based on measured
preferences)

H2 (+)  H3 (+)  H4 (+) X
Ability to
Preference Product
express
insight involvement
preferences

 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
Questions remaining unanswered

- What about

 product involvement?
Study II
generalizeabiltiy?

 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 Tulane University

MB Sarkar 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
Entrant types
Relationship with Customers
UM NUM
Core technology involved in disruption

I II
Enhancing

In-house customers AND NO in-house customers;
prior experience in core ONLY prior experience in
technology of emerging core technology of
technical subfield
COMPETENCY

emerging technical subfield

III IV
Destroying

ONLY in-house customers NO in-house customers and
but NO prior experience in NO prior experience in core
core technology of emerging technology of emerging
technical subfield 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 Rules
- Hardware - Standards
- Software - Protocols
- Services - Policies
- Contracts
Architecture

3
Large and Growing Share of Global Economy
• Not just information industries, also:
– Financial services, e.g., ATMs, credit cards, securities exchanges
– Transportation, e.g., package delivery, airlines, reservation systems,
fuel-cell cars, container shipping
– Retail, e.g., shopping centers, bar codes/RFID
– Energy, e.g., grid + appliances, energy trading
– Real estate, e.g., home buying
– Health care, e.g., HMOs
– Enterprise administration, e.g., headhunters, trade shows
– Personal relationships, e.g., nightclubs, marriage brokers, brothels

• 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 Many Providers
Proprietary Licensor
One •Macintosh •Windows
Sponsor •eHarmony •American Express
•Mall of America •Scientific-Atlanta
Joint Venture Shared
Many •CareerBuilder •Linux
Sponsors •Orbitz •Wi-Fi
•Covisint •Real Estate MLS
6
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 Solution
Pioneer > Late Adopter •Penetration Pricing (e.g., PayPal, PS3)

Side A > Side B •Permanent Subsidies to One Side
(and vice versa) (e.g., PDF, Monster.com)
•Integration into Sell-Side User Role
(e.g., Xbox + Halo, Mac + iLife)
Marquee User > •Exclusivity (e.g., anchor store, Blu-ray)
Hoi Polloi

8
WTA Potential?

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

9
Missing from framework: When does
shared approach yield superior platform?
• Positive factors • Negative factors
– Multiple parties = greater – Delays due to politics
collective R&D effort and coordination
– Darwinian pressure to processes
incorporate best – Modular design forfeits
technologies opportunities for tight
– Regular user feedback integration (as with
and input throughout iPod/iTunes)
design cycle, not just in – Least common
alpha/beta denominator design to
– Specifying module ensure support of less
interfaces avoids skilled parties
“spaghetti code” – Vested interests may
obstruct innovation
10
HBS-MIT User and Open Innovation Workshop August 4-6, 2008

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
ASYMMETRIES
Sticky information of technical nature
(von Hippel, 1994,
1995, 1998, 2001b;
MANUFACTURER von Hippel y Katz,
2002; Thomke y von
Hippel, 2002)
Theoretical background

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 H1 (+)
INFORMATION ON
NEEDS
COOPERATION
WITH USERS
TECHNOLOGICAL
STICKY
INFORMATION H2 (+)

HETEROGENEOUS
NEEDS H3 (+)

Foreign Export R&D Public Tecnonological Adquisition Economic
Size
capital intensity Experience Subsidies sector & Demerged 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 Marshall Van Alstyne
Tulane University Boston University & MIT
Sponsored by NSF IIS-0338662, and grants from CISCO & Microsoft Corporations
© 2008 Parker & Van Alstyne
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
“e-collective work” refers to Complexity
Problem

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 Gutenberg OSS
Tagging DP Linux

Google Facebook Inno-
Image Translation Centive
Labeler

Amazon
Mechanical
Turk

Villarroel & Tucci, 2008 – www.epfl.ch/csi 2 Aug, 2008
Traditional Work e-Collective Work

Online Communities:
Teams: small, local, internal
large, distributed, external

Central Product-oriented Distributed Task-oriented

Closely held assets Openly shared assets

Tight IP protection „Loose‟ IP

Formal Contractual ties Informal Collaboration

Physical work environment Virtual work environment

Personal synchronous interactions Impersonal asynch. contributions

Monetary and Power incentive Altruistic, Fun and Monetary ?
Villarroel & Tucci, 2008 – www.epfl.ch/csi 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 Gutenberg OSS
Tagging DP Linux

Google Facebook Inno-
Firm-sponsored Image Translation Centive
Labeler
e-collective
Amazon
initiatives Mechanical
Turk
low medium high
Villarroel & Tucci, 2008 – www.epfl.ch/csi 4 Aug, 2008
I would keep working on this I share an interest with others in this community
even if I were never paid at all
challenge fun cause frequency duration
VA_he lp CA_workforfre e CH_gral FU_e njoy VA_cause SO_shar e dinter e st
FQ_ofte n W_hrswee k
60
37.8 68.5 7.3 41.7 34.2 30.6 33.3 0.0
7 7 7 7 7 7 7
0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0
34.2 19.8 15.6 44.3 36.9 30.6 26.0
50
6 6 6 6 6 6 6 0.0
0.0 0.0 0.0 0.0 0.0 0.0 0.0
2.1
5 18.9
5 6.3
5 37.5
5 11.3
5 16.2
5 25.2
5 2.1 40
1.0
0.0 0.0 0.0 0.0 0.0 0.0 0.0
7.2 2.7 26.0 0.9 7.2 8.1 4.2 2.1
4 4 4 4 4 4 4 30
0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.1
0.0 0.0 9.4 0.0 1.8 0.0 6.3
3
0.0 N=115 3
0.0
3
0.0
3
0.0
3
0.0
3
0.0
3
0.0
20
7.3
12.5

0.0 0.0 3.1 0.9 0.0 0.9 22.9
2 2 2 2 2 2 2 17.7
0.0 0.0 0.0 0.0 0.0 0.0 0.0 10
14.6
1.8 2.7 1.0 0.9 3.6 4.5 5.2
1 1 1 1 1 1 1
0.0 0.0 0.0 0.0 0.0 0.0 0.0 37.5
0

M G_he lp CA_workforfree CH_gr al FU_e njoy VA_cause SO_shar e dinter e st
FQ_ofte n W_hrswee k
60
42.6 20.5 2.4 34.0 12.9 12.9 2.8 0.0
7 7 7 7 7 7 7
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
26.8 37.5 25.4 20.5 6.6
50
6 26.3 6 5.7 6 6 6 6
6 0.0
0.0 0.0 0.0 0.0 0.0 0.0 0.0
0.5
5 19.6 21.4 5 27.4
5 16.2
5 27.2
5 29.0
5 12.3 40
5 0.0
0.0 0.0 0.0 0.0 0.0 0.0 0.0
6.0 15.2 33.5 9.7 19.2 20.1 13.7 0.9
4 4 4 4 4 4 4 30
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5
2.6 5.4 17.0 1.2 2.7 4.9 25.0
3 3 3 3 3 3 3 20
0.9
0.0 0.0 0.0 0.0 0.0 0.0 0.0
0.9
0.9 5.4 13.2 0.8 3.6 6.3 30.2
2
0.0 N=259 2
0.0
2
0.0
2
0.0
2
0.0
2
0.0
2
0.0 10
2.8
18.9
1.7 5.8 0.9 0.8 8.9 6.3 9.4
1 1 1 1 1 1 1
0.0 0.0 0.0 0.0 0.0 0.0 0.0 74.1
0

CA_money CA_workf CH_gral FU_e njoy VA_cause SO_shar e FQ_often W_hrswee
8 8 8 8 8 8 8 60
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
43.5 2.0 1.0 19.2 4.1 5.9 29.4 0.5
7 7 7 7 7 7 7 50
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.3
29.7 5.6 2.0 33.0 12.8 11.3 35.3
6 6 6 6 6 6 6 1.0
0.0 0.0 0.0 0.0 0.0 0.0 0.0 40
0.0
16.9 11.0 13.8 30.2 17.1 25.1 11.0
5 5 5 5 5 5 5
0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.1
30
5.9 12.3 33.8 9.7 29.7 29.7 9.5 0.8
4 4 4 4 4 4 4
0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.9
2.3 12.8 20.7 4.3 6.9 8.4 4.6
20
3 3 3 3 3 3 3 3.9
0.0 0.0 0.0 0.0 0.0 0.0 0.0
10.2
2 0.8 2 20.2 2 18.4 2 2.8 2 10.7 2 9.2 2 9.0 10
22.1
0.0
N=391
Villarroel & Tucci,12008 – www.epfl.ch/csi 0.0 0.0 0.0
5 0.0 0.0 0.0
Aug, 2008 54.2
1 1.0 36.1
1 10.2
1 0.8
1 18.7
1 10.5
1 1.3
0
Conclusions
 We analyzed motivational factors leading to greater
participation and contribution in two firm-sponsored e-
collective 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
6 Aug, 2008
User and Open Innovation Workshop at HBS
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

Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06
Source: http://www.cback.de/spiele/bilder/css1.jpg
2
Source: http://www.gulli.com/fileadmin/news_teaser/counterstrike-screenshot.jpg
Technische Universität München

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

core
complementing code,
engine,
publicly available,
pro-
modifications allowed
prietary

Users developed the
popular modification
Valve profits Counter-Strike
by selling the
core engine

* 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
complementing code
engine

• 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
flexibility to
“outgoing,” own IP; specification
adjust IP
IP status of modules of IP status of
status; option
TYPE OF can be specified own artifact
value
IP MODULA-
RIZATION
flexibility to
“incoming,” external IP; avoid
react to
IP status of modules foreseeable
inadvertent
externally given hold-up
infringement

Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06 5
Technische Universität München

More examples (outgoing / certain): Ships, cameras

US maker of digital cameras:
Korean shipbuilders outsource outsourced production to China,
non-IP-sensitive modules to China protecting the IP-sensitive
architecture by modularization
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 6
Technische Universität München

Propositions (tentative…)
Relevance
Uncertainty of IPRs
Unpredictability
about of environment
existing IPRs
Opportunities for
Extent of
distributed value
distributedness Prevalence of creation down-
of value creation reactive | proactive stream (incl.
upstream IP modularization outsourcing)

Complexity of Importance of
technology standards and
compatibility

Heterogeneity
of needs
downstream
All arrows indicate positive effects

Design for Appropriability • Henkel, Baldwin • UIW, 2008-08-06 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 self-
organization rather than design
 Remarkable innovative performance
Collective Invention (Allen, 1983)
Examples of such cases [of collective
invention] are not many and they required
rather special circumstances that were not
common and collective invention in its
most extreme form, to judge from its
short lifespans, was vulnerable and
ephemeral
(Mokyr, 2008)
The historical significance of
collective invention
 Cleveland blast furnaces (Allen, 1983)
 Cornish steam engines (Nuvolari, 2004)
 London clock-makers (MacLeod, 1988)
 Lyon silk industry (Foray & Perez, 2005)
 Berkshire paper-making (McGaw, 1987)
 Western steam-boat (Hunter, 1949)
 Viennese chairs (Kyriazidou & Pesendorfer, 1999)
 Japanese cotton spinning (Saxonhouse, 1974)
 Norwegian brewing industry (Aanstad, ongoing)
 “Black” bottles for champagne (Belhoste, ongoing)
User Innovation and Patent
Doctrine

Katherine J. Strandburg
DePaul University College of Law
Visiting Fordham Law School Fall 2008
Motivation for this Project
Patent doctrine implicitly assumes a “seller
innovator” whose primary motivation is
commercial sale – sellers/manufacturers
invent, users consume BUT
Increasing importance of user innovation and
open and collaborative innovation
- Open source, digital mechanisms for innovation
Increasing overlap and interaction between
knowledge production systems
- Expansion of IP subject matter, e.g. basic
science, business methods
- Globalization, e.g. traditional knowledge
PATENT BALANCE
Patents are intended to provide:
Incentive to invent (for self-disclosing
inventions)
- by providing opportunity to recoup
investment through exclusivity
Incentive to disclose (for non-self-disclosing
inventions)
- by providing longer period of exclusivity cf.
trade secrecy (and hence higher returns)
Incentive to disseminate
- by facilitating licensing and deterring free
riding competitors
PATENT BALANCE
Patents Balance:
incentives to invent, disclose, and
disseminate inventions
VS
increased prices, reduced follow-on
innovation

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
DR. ANDREW W. TORRANCE
UNIVERSITY OF KANSAS SCHOOL OF LAW
DR. WILLIAM M. TOMLINSON
UC IRVINE BREN SCHOOL OF INFORMATION AND COMPUTER SCIENCE
PATENTS AND INNOVATION

• United States Constitution
 “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)
• Hypothesis
 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)
• Productivity*
 Significantly more (p<0.001)
total inventions are made and
sold in the pure commons
(658.6) than in the patent/open
source system (322.8)
• Societal Utility*
 Significantly more (p<0.002) per
capita wealth is generated in the
pure commons ($41 233.3) than
in the patent/open source
system ($10 208.6)
• *Pure patent and patent/open source
systems not significantly different
RESEARCH PROJECTS

• 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 Motivations-
Behavior-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 Company-
Centered 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 Individual
Ideology Career benefits
• Stallman (1999) • Lerner and Tirole (2002)
• Stewart and Gosain (2006)
Enjoyment-based
Reciprocity • Lakhani and Wolf (2003)
• Raymond, (1999), (2001) • Hars and Ou (2002)

Affiliation and Identity Monetary rewards
• Hertel et al. (2003) • 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 Behavior Outcomes

Individual Incentives Results

Behavior
Learning orientation H1 Learning outcomes
H8 a Replication
Involvement Attitude
Performance orientation H2 H8 b Adaptation
H6 H7
H8 c Innovation
Participation
Social Incentives
Satisfaction Level
H9 a Team
Reputation H3
H9 b Project
Salary
Reciprocity H4

Identification 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
outsource sell
innovation products
user

company (mass)
user user
market

user
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. Self-
interest AND fairness perceptions impact the users’ intention to submit innovations.

business model user user
dimensions perception response

sales p < .001 p < .001 attitude
participation self-interest towards the
p < .001
p < .001 company
reputation p < .05 p < .001
rewards p < .001
n.s.
p < .001
p < .1 intention to
IP right distributive n.s.
p < .001
transfer p < .001 fairness submit
designs
n.s. p < .05
company
profit p < .001
n.s.
p < .001 procedural WOM
selection fairness intention
n.s. p < .001
mechanism

leaduserness
n = 734
11
Global Fit-Measures: χ²-Wert = 450.52; df =157; p = 0.000; χ²/df = 2.87; GFI =
0.94; AGFI = 0.92; CFI = 0.97; IFI = 0.97; TLI = 0.97; RMSEA = 0.05 No moderator effect
Discussion

• 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
Context of sharing
(where)
Drivers of sharing
(why) Type of information Open source software
shared (what) development
Motivations: intrinsic (Volunteering)
(e.g. fun) to extrinsic Code
(e.g. money) Wikipedia
Content/facts
Structural properties Flickr
Meta-information
Personality (e.g. (tags) etc
personal values)
Photos
Privacy concerns
etc
etc

Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
Overview of research program
Type of information Context of
Drivers of sharing (why)
shared (what) sharing (where)
Open source
Motivations: intrinsic (e.g.
software
fun) to extrinsic (e.g. Code
development
reputation building)
(Volunteering)

Structural properties (e.g.
Content/facts Wikipedia
structural embeddedness)

Personality (e.g. personal Meta-information
Flickr
values) (tags)

Privacy concerns photos

etc etc etc
Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
Overview of research program
Type of information Context of
Drivers of sharing (why)
shared (what) sharing (where)
Open source
Motivations: intrinsic (e.g.
software
fun) to extrinsic (e.g. Code
development
reputation building)
(Volunteering)

Structural properties (e.g.
Content/facts Wikipedia
structural embeddedness)

Personality (e.g. personal Meta-information
Flickr
values) (tags)

Privacy concerns photos

etc etc etc
Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
Overview of research program
Type of information Context of
Drivers of sharing (why)
shared (what) sharing (where)
Open source
Motivations: intrinsic (e.g.
software
fun) to extrinsic (e.g. Code
development
reputation building)
(Volunteering)

Structural properties (e.g.
Content/facts Wikipedia
structural embeddedness)

Personality (e.g. personal Meta-information
Flickr
values) (tags)

Privacy concerns photos

etc etc etc
Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
Overview of research program
Type of information Context of
Drivers of sharing (why)
shared (what) sharing (where)
Open source
Motivations: intrinsic (e.g.
software
fun) to extrinsic (e.g. Code
development
reputation building)
(Volunteering)

Structural properties (e.g.
Content/facts Wikipedia
structural embeddedness)

Personality (e.g. personal Meta-information
Flickr
values) (tags)

Privacy concerns photos

etc etc etc
Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
Results
Individual motivations

enjoyment- Enjoyment
based intrinsic
Lakhani & Wolf, 2005

motivations
community- Commitment to
based intrinsic the community
motivations
extrinsic Self Photo sharing
motivations development
Structural
McLure-Wasko & Faraj,

Structural: Degree
centrality

Control: Tenure
Control

in community
2005

Oded Nov, Why and how do people share, Yahoo! Research NYC, June 2008
LEAD USERS AS FACILITATORS OF
KNOWLEDGE SHARING IN AN ONLINE
USER COMMUNITY

Lars Bo Jeppesen

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: Discussions are ”ahead of
the archive”:
• The disclosure of problem
information to a pool of potential • Email lists and bulletin boards
knowledge providers with a which serve as automatic and
request for a solution/answer searchable archives that
members can (and should)
• Broadcasting problem consult before posting
information to large crowds of
solvers can draw on the • Avoiding exchanges of already
awareness of many (Goodman solved problems
and Darr, 1999)
• 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 Knowledge Behaviors

H1 (+)
Lead User

H2 (+) Knowledge Give
Boundary
Spanner H3 (-)

Innovator

Controls
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 head-
teacher 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 Vision for New School Designs
Philosophy/
Policy

Personalised Incorporate open layouts as supplement to traditional
learning; layouts (corridor+30-pupil classrooms)
project-based
learning
Extended Increase # areas accessible to local community; no
school shutters on windows; low fences

Better value Rationalize provision of science labs; no suspended
for money ceilings

Better pastoral New approach to toilette design; sensorial rooms;
care covered play areas

Combining the strengths of UMIST and
The Victoria University of Manchester
Empirical Findings
School School profile Open Local Rationalization of Pastoral care
cases layouts community science labs innovations
areas
(1) Located in very deprived area; No Yes No New toilette design;
comprehensive school covered courtyard
“outstanding school” (Ofsted)
(2) 50% pupils from deprived Six Limited Yes No evidence
families; voluntary aided flexible
(catholic) classroo
“good school” (Ofsted) ms
(3) Located in deprived area; No Limited No No evidence
voluntary aided (catholic)
“good school” (Ofsted)
(4) Located in one of the most Yes Yes No Sensorial rooms for
deprived areas in UK; SEN;
comprehensive Flexible hall-theatre
“Outstanding school” (Ofsted) space
(5) Youngsters may commute 40- No No No No evidence
50km to get to school; top
academic performer; voluntary
aided (Jewish)
“Outstanding school” (Ofsted)

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 User-
Driven 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 Uwe Gross

Cambridge, 4th August 2008 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-to-
order 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

1 Domain 2
User community
knowledge
6a
Horizontal User
Learning
Innovation

Preference 3 Complementary 4 6b
towards revealing assets

Tolerance towards
5
exploitation

HBS/MIT User Innovation Workshop – August, 2008 Georg von Krogh | Stefan Haefliger | Peter Jäger 2
Results

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 ‣ Proposition 3 & 4: confirmed
 The game companies preference towards free revealing provided users with complementary
assets
 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

Develop Ideas Inside
Organization

Problem OR

Novel Solution Identify Ideas Outside

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

OT
Low
Distance
Target Industry
IT Medium
Distance

High
Near Analogous Industries Distance
IAN

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 B Std. Error
Inside vs. Outsideb 0,450** 0,235
Near Analogous Industries Quality of Idea Descriptiona 0,388*** 0,156
Linear Regression, F-value=3,597**, R=0,044, R2=0,032, n=159
IAN a 5-point rating scales (1=low, 5=high)
b 0=Inside, 1=Outside

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 I T* IAN* IAF*
(n=51) (n=52) n=(25) (n=31)
Dimension Mean (SD) Mean (SD) Mean (SD) Mean (SD)
Near Analogous Industries Novelty 2,12 (1,14) 2,60 (1,27) 1,76 (1,27) 2,35 (1,45)
IAN p<0,05 p<0,05
ANOVA, F=2,783**, n=159

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 I T* IAN* IAF*
(n=51) (n=52) n=(25) (n=31)
Dimension Mean (SD) Mean (SD) Mean (SD) Mean (SD)
Near Analogous Industries Novelty 2,12 (1,14) 2,60 (1,27) 1,76 (1,27) 2,35 (1,45)
IAN p<0,05 p<0,05
ANOVA, F=2,783**, n=159

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
User and Open
Innovation
Project Outline Workshop
4-6 August ‘08

• Research Question:
– How do consumers (ie users) understand the
value in a new technology?
– Implying further questions for analysis:
• What is value?
• How does value work – the process of value?
• How does value stabilise?
• If stable, how does value de-stabilise?
User and Open
Innovation
Key Findings Workshop
4-6 August ‘08

• 12 dimensions of value
– Unlimited value elements, within and value element
combinations
– Four universal: price, function, time, service/reliability
– Four social: need, duty, power, community
– Four indiv: beauty, emotion, learning, simplicity
• Process of value: includes social net, action,
attitude, consumer/innovator strategy, context
• Value strategies: explore, filter, copy, close
• Value properties: dynamic, degrades, iterating
User and Open
Innovation
Key Implications Workshop
4-6 August ‘08

• 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 In-house Develop new
AMTs off the customization AMTs in-house
shelf or license

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 User-
Co-Design for Energy
Commodities

User and Open Innovation Workshop
Evalotte Lindgens
Cambridge, 4th August 2008 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
• Purchase Intention
Service (WTP)
Locus of Control • Decision satisfaction
• Switching intention

Default
Configuration

Covariates:
• Environmental
Consciousness
• Need for Uniqueness
• Loyalty / Switching
costs

Design:
2 (extent of customization high vs low) * 2 (default configuration base vs neutral) *
2 (product categories power vs gas) between subjects
3
Case: Home electricity

4
Expansion of Collective Innovation
to Customer Support Services

Manabu Mizuno, PhD
The Maker / User Deadlock Syndrome

Lack of
Reference Data
The PC maker
Lack of Product The printer maker
Knowledge

Printer error
Lack of Authority

There was an error during the last
Collective Innovation
operation: please refer to trouble-shooting.
Q&A Sites as Popular Solution Means
Fact:
30% of Japanese Users Software
Makers Developers
have visited Q&A sites when they have trouble.
e.g. NC Network e.g. Trend Micro
On-line
Survey Communities
by Kanden CS Forum Inc. , 2008
OEM OEM
Link Link

Facts:
3, 000, 000 users exchange solutions monthly.
OEMhave been answered to date.
15, 500, 000 questions
Major Portal Sites
e.g. MSN Japan, Goo by NTT
1 Ambiguous Questions
are asked in everyday words, not technical terms.

2 Practical Experiences
Features are exchanged between various types of users.

of
Q&A Sites
3 Wide Range of Issues
are covered from PC matters to personal affairs.

4 Friendly Communities
accommodate all levels of users.
Dias 1

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

Pradeep Divakaran
Aarhus School of Business, Denmark.
Pradeep Divakaran
Innovation Management
User and Open InnovationGroup
Workshop
August 4-6, 2008.
Harvard Business School.
Dias 2
Exploring how user communities facilitate
entrepreneurial processes

User community

Exploring how User Communities
facilitate entrepreneurial processes
Facilitate

Opportunity Opportunity Opportunity
Recognition Evaluation Exploitation

Pradeep Divakaran
Example: To what degree
Innovation Management Group
Example: In what ways Example: How does the
does collaborative filtering
do user communities help collective development of
serve as a valid test market
identifying entrepreneurial solutions goes along with
for new products,concepts
opportunities? private commercialization?
or ideas?
Dias 3

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

User communities facilitating entrepreneurial processes
Exploring how User Communities User community

facilitate entrepreneurial processes
Product ideas/concepts/prototypes

Collaborative filtering/screening of ideas
Facilitated by

Opportunity exploitation

New firm creation

Pradeep Divakaran
• What is the response time of community members giving feedback to a specific idea?
Innovation Management Group
• What is the number of members giving feedback to a specific idea?
• What is the length and nature of the feedback?
• What is the social network position (core vs. periphery) of community members giving
feedback to a specific idea?
Dias 4

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

Exploring how User Communities
User community User community User community User community

facilitate entrepreneurial processes

Pradeep Divakaran
Potential variables to look at:
• Innovation
Number of community Management
members Group
• Social network structure of the community. Ex. Network density
• Governance structure of the community. Ex. Purpose of community, rules and norms.
Dias 5

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 Preference Idea Markets
Markets Markets
(sports, elections, (consumer
(ranking of ideas)
sales, project preferences)
completion)

Reported Extremely Correlation Correlation
Accuracy: accurate 0.7-0.85 0.1-0.45
• Hanson (2003) • Chan/Dahan (2002) • Ho/Chen (2007)
• Forsythe/Rietz/Ross (1999) • Dahan/Hauser (2002) • Hoit (2006)
• Berg/Rietz (2003) • LaComb/Barnett/Pan (2007)
• Gruca/Berg/Cipriano (2003) • Soukhoroukova/Spann/Skiera
(2007)
• Spann/Skiera (2003)
• Chen/Fine/Huberman (2004)
• Oliven/Rietz (2004)
• Wolfers/Zitzewitz (2004)
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 Accessible
incentives information per
Trading idea
experience

Market design: Truth-seeking Accuracy of
Trade fees, trading behavior idea market
interest rates,
short selling,
market
structure Price-modifying
algorithms
Cliff Lampe

Department of
Telecommunication, Lifecycles of Participation in
Information Studies and Media
Online Communities
Michigan State University

lampecli@msu.edu
Research Question
• Online communities persist over time.
– How does participation change?
– How do people decide to leave?

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 Anne-Katrin Neyer
University Erlangen-Nuremberg University Erlangen-Nuremberg
Germany & Center for Leading Innovation & Germany & Center for Leading Innovation &
Cooperation (CLIC) at HHL Leipzig 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 Core
inside
(e.g., Schumpeter, 1934; Wheelwright & Clark,
1992; Visserss & Dankbaar, 2002)
innovators

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

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

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 Differentiator

(Einhell) (Fein & Marquardt)

Social integration Weak ties Many Many

mechanisms Strong ties * Few

Symmetric * Step 1: Peer Review
Power relationship
Asymmetric Single decision-maker Step 2: Jury

Core inside innovators **** ****
Importance of type of
Peripheral inside innovators ** ***
innovator
Outside innovators ** **

• Defined as social integration mechanisms and power relationships (Todorova, & Durisin, 2007)
Neyer, & Doll, 2008 3
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 –
supplemented with archival and survey data
Shaver,
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)
• Compare acts of omission (among failed outcomes
that begin a process of blame attribution) with acts of
commission (in successful crowdsourcing Challenges
that begin a process of credit attribution)
• Yield theoretical implications for systems of contingent
compensation, mechanisms of reputation-building and
impression management
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
Buy new parts for the fraction of price of
Combine modules
complete new shoes

Select designs

Rebuy of worn / broken
parts

Aesthetic and
Comfortable

Support of regional work
No glued connections

Genuine separation as base for
Cradle-to-Cradle recycling /
Low rate of labor costs  profitable biodegradability
production in Germany / Austria

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 Day 7
1
3
5 500 most active users Day 5
7
1
3
(Barabasi, 2007)
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

0.77*** Level of
Financial
Activity Level Monetary
Incentive
Reward

Fun 0.46*** Motivation

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 & non-
members of projects in the SF
network?
•  Do these participation patterns enable
us to identify meaningful communities
in SF?
Representing Clusters
Visually
•  Even small clusters can have large
numbers of users
•  Edge is the key data element
•  Blue for member participations
•  Yellow for nonmember participations
•  Edge width proportional to weight
Pretty Pictures: Zope/Plone Projects

•  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 Professor Cornelius Herstatt
Visiting Scholar 2007-2008 Institute of Technology & Innovation Management
Sloan School of Management Hamburg University of Technology
Massachusetts Institute 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 Professor Cornelius Herstatt
viktor@drbraun.us c.herstatt@tuhh.de
Last Name First Name Institution Email
Technical University of Munich &
Alexy Oliver Imperial College London alexy@wi.tum.de
Ali Ayfer Harvard Business School aali@hbs.edu
Massachusetts Institute of
Amjad Iram Technology irumak@mit.edu
Antorini Yun Mi Aarhus School of Business yma@asb.dk
Arazy Ofer University of Alberta ofer.arazy@ualberta.ca
Massachusetts Institute of
Bae Sung Joo Technology sjbae@mit.edu
Baldwin Carliss Harvard Business School cbaldwin@hbs.edu
Bateman Chester Oregon State University chester.bateman@gmail.com
Vienna University of Economics and
Bauer Julia Business Administration julia.bauer@wu-wien.ac.at
Belbaly Nassim Montpellier Business School n.belbaly@supco-montpellier.fr
Benbya Hind Montpellier Business School benbya@gmail.com
Bessen James Boston University School of Law jbessen@bu.edu
Bogers Marcel EPFL marcel.bogers@epfl.ch
Braun Viktor Hamburg University of Technology vfb@mit.edu
Vienna University of Economics and
Braun Katharina Business Administration katharina.braun@wu-wien.ac.at
Massachusetts Institute of
Bray David Technology d_bray@mit.edu
Burgaard Peder Innovation Lab Peder@innovationlab.net
Cai Yuanfang Drexel University caiyuanfang.cs@gmail.com
Carter Anne Brandeis University carter@brandeis.edu
Chai Kah-Hin National University of Singapore iseckh@nus.edu.sg
Chapman Kristen SourceForge, Inc. kchapman@corp.sourceforge.com
Chatterji Aaron Duke University ronnie@duke.edu
de Jong Jeroen Erasmus University jjo@eim.nl
Diener Kathleen RWTH Aachen University diener@tim.rwth-aachen.de
Fashion Institute of Technology &
Dorosh Daria University of East London dbas@mindspring.com
Eisenmann Tom Harvard Business School teisenmann@hbs.edu
Ettinger Elfi University of Twente e.ettinger@utwente.nl
Evers Steffen Technical University of Berlin evers@cs.tu-berlin.de
Fauchart Emmanuelle University of Lausanne e.fauchart@bluewin.ch
Ferrers Richard University of Queensland r.ferrers@business.uq.edu.au
BI-Norwegian School of
Fjeldstad Oystein Management oystein.fjeldstad@bi.no
Fleming Lee Harvard Business School lfleming@hbs.edu
Flowers Steve University of Brighton sf29@sussex.ac.uk
Vienna University of Economics and
Franke Nikolaus Business Administration nikolaus.franke@wu-wien.ac.at
Frederiksen Lars Imperial College London l.frederiksen@imperial.ac.uk
Frey Karsten University of Bern frey@imu.unibe.ch
Füller Johann Innsbruck University johann.fueller@hyve.de
Vienna University of Economics and
Funke Thomas Business Administration thomas.funke@gmail.com
Furtmüller Klaus Linz University
International Development
Gault Fred Research Centre fgault@idrc.ca
Gil Nuno Manchester Business School nuno.gil@mbs.ac.uk
Gomulya David University of Washington dgomulya@u.washington.edu
Gorbatai Andreea Harvard Business School agorbatai@hbs.edu
Gross Uwe RWTH Aachen University gross@tim.rwth-aachen.de
Last Name First Name Institution Email
Gruber Marc EPFL marc.gruber@epfl.ch
Grubhofer Susanna Copenhagen Business School susanna.grubhofer@gmx.at
Haag Simon University of Bern haag@imu.unibe.ch
Vienna University of Economics and
Hader Christopher Business Administration Christopher.Hader@wu-wien.ac.at
Haefliger Stefan ETH Zurich shaefliger@ethz.ch
Halkett Richard NESTA Richard.Halkett@nesta.org.uk
Hassan Salah George Washington University hassan@gwu.edu
Hatta Masayuki University of Tokyo mhatta@gnu.org
Henkel Joachim Technical University of Munich henkel@wi.tum.de
Herstatt Cornelius Hamburg University of Technology c.herstatt@tuhh.de
Hienerth Christoph Copenhagen Business School ch.ino@cbs.dk
Hilgers Dennis RWTH Aachen University hilgers@tim.rwth-aachen.de
Massachusetts Institute of
Hill Benjamin Mako Technology mako@mit.edu
Howison James Syracuse University james@howison.name
Hyde Ben Apache Foundation bhyde@pobox.com
Ihl Christoph RWTH Aachen University ihl@wi.tum.de
Jaeger Peter ETH Zurich pejaeger@ethz.ch
Jeppesen Lars Copenhagen Business School lbj.ivs@cbs.dk
Jin Chen Zhejiang University cjhd@zju.edu.cn
Vienna University of Economics and
Jung Stephan Business Administration Stephan.Jung@wu-wien.ac.at
Vienna University of Economics and
Kaiser Ulrike Business Administration ulrike.kaiser@wu-wien.ac.at
Kamp Gerrit Stevens Institute of Technology gkamp@stevens.edu
Vienna University of Economics and
Keinz Peter Business Administration Peter.Keinz@wu-wien.ac.at
King Andy Harvard Business School aking@hbs.edu
Vienna University of Economics and
Klausberger Katharina Business Adminstration katharina.klausberger@wu-wien.ac.at
Koen Peter Stevens Institute of Technology pkoen@stevens.edu
Lakhani Karim Harvard Business School klakhani@hbs.edu
Lampe Cliff Michigan State University lampecli@msu.edu
Leimueller Gertraud Harvard University (Alumna) gertraud.leimueller@winnovation.at
Lettl Christopher Aarhus School of Business lettl@asb.dk

Singapore Management University
Levine Sheen & University of Pennsylvania sslevine@gmail.com
Lhuillery Stephane EPFL stephane.lhuillery@epfl.ch
Lindgens Evalotte RWTH Aachen University lindgens@tim.rwth-aachen.de
Llanes Gaston Harvard Business School gllanes@eco.uc3m.es
Lüthje Christian University of Bern luethje@imu.unibe.ch
Massachusetts Institute of
MacCormack Alan Technology amaccormack@hbs.edu
Maclay Colin Harvard University cmaclay@cyber.law.harvard.edu
Mayrhofer Philip LMU Munich mayrhofer@cdtm.de
Meyer Peter U.S. Bureau of Labor Statistics meyer.peter@bls.gov
Mizuno Manabu Hannan University d-mizuno@xj9.so-net.ne.jp
Massachusetts Institute of
Mollick Ethan Technology emollick@mit.edu
Massachusetts Institute of
Mortensen Mark Technology markm@mit.edu
Möslein Kathrin University Erlangen-Nuremberg kathrin.moeslein@hhl.de
Last Name First Name Institution Email
Massachusetts Institute of
Murray Fiona Technology fmurray@mit.edu
Nakamura Tsuyoshi Tokyo Keizai University nakamura@tku.ac.jp
Neyer Anne-Katrin University Erlangen-Nuremberg anne-katrin.neyer@wiso.uni-erlangen.de
Nov Oded Polytechnic University of NYU onov@poly.edu

Nuvolari Alessandro Eindhoven University of Technology a.nuvolari@tue.nl
Ogawa Susumu Kobe University ogawa@kobe-u.ac.jp
Ohashi Hiroshi University of Tokyo ohashi@e.u-tokyo.ac.jp
O'Mahony Siobhan UC Davis somahony@gsm.ucdavis.edu
Oostendorp Nate SourceForge, Inc. noostendorp@corp.sourceforge.com
Otner Sarah London School of Economics S.M.Otner@lse.ac.uk
Paquette Scott University of Maryland spaquett@umd.edu
Perkmann Markus Imperial College London markus.perkmann@gmail.com
Piller Frank RWTH Aachen University piller@tim.rwth-aachen.de
Ponnamma Divakaran Pradeep Kumar Aarhus School of Business prad@asb.dk
Pötz Marion Copenhagen Business School mp.ino@cbs.dk
Raasch Christina Hamburg University of Technology raasch@tu-harburg.de
Vienna University of Economics and
Roiser Susanna Business Administration susanne.roiser@wu-wien.ac.at
Rossi Lamastra Cristina Politecnico di Milano cristina1.rossi@polimi.it
Roy Raja Tulane University rroy@tulane.edu
Sánchez-González Gloria University of León gloria.sanchez@unileon.es
Schaan Susan Statistics Canada susan.schaan@statcan.ca
Schiele Holger Jacobs University Bremen holger.schiele@ufo.uni-hannover.de
Seltzer Wendy Harvard University wendy@seltzer.org
Shah Sonali University of Washington skshah@u.washington.edu

Sharif Azita Daedalus Software, Inc. & HBS '00 ASharif@DaedalusSoftware.com
Shaw Aaron Harvard University ashaw@cyber.law.harvard.edu
Snow Charles Pennsylvania State University csnow@psu.edu
Sobel Jon SourceForge, Inc. jsobel@corp.sourceforge.com
Spaeth Sebastian ETH Zurich sspaeth@ethz.ch
Stephens Susie Eli Lilly Stephens_Susie_M@Lilly.com
Stodden Victoria Harvard University vcs@stanford.edu
Strandburg Katherine DePaul University College of Law kstrandb@depaul.edu
Thom Nico Deutsche Telekom Nico.Thom@telekom.de
Thomke Stefan Harvard Business School sthomke@hbs.edu
AICAD & Parsons the New School
Tomlinson John for Design

Torrance Andrew University of Kansas School of Law torrance@ku.edu
Tripsas Mary Harvard Business School mtripsas@hbs.edu
Tucci Christopher EPFL christopher.tucci@epfl.ch
Vienna University of Economics and
Tuertscher Philipp Business Administration philipp.tuertscher@wu-wien.ac.at
Turk Ross SourceForge, Inc. rturk@corp.sourceforge.com
Ujjual Vandana University of Sussex v.ujjual@sussex.ac.uk

Boston University & Massachusetts
Van Alstyne Marshall Institute of Technology mva@bu.edu
van Looy Bart K.U. Leuven bart.vanlooy@econ.kuleuven.be
Vienna University of Economics and
Vandor Peter Business Administration peter.vandor@wu-wien.ac.at
Vikram Hirendra Aarhus School of Business hivi@asb.dk
Last Name First Name Institution Email
Villarroel Andrei EPFL andrei.villarroel@epfl.ch
Massachusetts Institute of
von Hippel Eric Technology evhippel@mit.edu
Voss Georgina University of Brighton g.s.voss@brighton.ac.uk
Vujovic Sladjana Aarhus School of Business slv@asb.dk
Wagner Stefan LMU Munich swagner@bwl.lmu.de
Walcher Dominik Salzburg University dominik.walcher@fh-salzburg.ac.at
West Joel San Jose State University Joel.West@sjsu.edu
Winston Smith Sheryl Temple University swinston-smith@umn.edu
Woolley Jennifer Santa Clara University jenniferwoolley@yahoo.com