Do Lead Users Have a Role In Business Model Innovation?

Let’s talk about lead user innovation. I traveled to MIT last week with BIF chief catalyst Saul Kaplan to spend some time with legendary innovation guru Eric von Hippel. A 45-minute packed conversation later, we left armed with a whole lot of questions about what it means to innovate and whether it might be prudent to put the lead user (as opposed to the average user) at the center of our innovation process.

First, a little background. Users, aided by improvements in computer and communications technology, are increasingly developing their own new products and services. These innovating users -- both individuals and firms -- often freely share their innovations with others, creating both user-innovation communities and a rich intellectual commons. Back in 2005, Eric wrote a book called Democratizing Innovation which looks closely at this emergent system of user-centered innovation. In particular, his research focused on the lead user.

Here's a quick definition of the lead user from one of his papers (Horizontal innovation networks - by and for users):

Lead users are defined as users of a given product or service type that combine two characteristics: (1) lead users expect attractive innovation-related benefits from a solution to their needs and so are motivated to innovate, and (2) lead users experience needs that will become general in a marketplace, but experience them months or years earlier than the majority of the target market. Note that lead users are not the same as early adopters of an innovation. They are typically ahead of the entire adoption curve in that they experience needs before any responsive commercial products exist – and therefore often develop their own solutions.

Lead-user innovation is different from all other processes of innovation we’ve been discussing here at the BIFSpeak blog. It’s also different from our own process of design-based innovation which does put the user at the center of the innovation process from an ethnographic perspective, but it doesn’t actually give people the tools to innovate themselves. (And after plowing through Eric's book, it's abundantly clear that this is an important distinction.)

Now much of Eric’s research is based on lead user product innovation. The question we posed to him was this: What role can or should the lead user play when dealing with business model innovation? Here at BIF, we’re focused on systems change. Is there a way to give the lead user the tools necessary to innovate on a systems-wide level? Do the tools even exist today to do that?

Eric showed us a quick video from the skateboarding documentary Dogtown and Z-Boys. If you’re not familiar, it’s about the rise of skateboarding in California in the 1970s following a severe drought which left swimming pools empty. Skateboarders, most notably the Z-Boys, started to skate the vertical walls of those swimming pools and in turn, created a booming worldwide industry. I quickly responded that Rhode Island is that empty swimming pool – we want to create the environment where that magic can happen. The difference though – and this is where we’re pushing the boundaries of Eric’s research – is that systems have multiple and diverse stakeholders. It's more than just giving 15 year old boys a place to play and an environment to innovate.

I’m in the midst of developing our research initiatives for 2008. And I’ll be headed to MIT again in January to learn a good deal more about how Eric’s work might be applied to the work here at BIF. If anyone out there has evidence, anecdotal or otherwise, of lead users affecting entire business models, I’d love to hear from you.

Posted December 3, 2007 03:18 PM by Chris Flanagan | Permalink