experience matters

By Johnathan Bonnell and Jason Theodore

In our last post, we discussed how technology has closed the gap between consumer needs and product creation. The result is the ability for consumers to be more deeply involved in the product ideation and creation process than ever before. But why does co-creation matter?

Why care about co-creation: ideas, free, and market leaders
1. There’s no shortage of ideas: co-creating provides a new avenue for consumers to share their ideas, and a new “idea stream” for producers to tap into. It can also serve as a live testing ground for ideas that come from within a company’s walls. Dell’s Idea Storm has received nearly 12,000 posted ideas and implemented 350, while P&G’s connect & develop program has influenced over 35% of their new products in market.

2. It’s in the “free”: People are using their personal time to interact with a brand, to have discussions with like-minded consumers about a brand, and the companies are only paying for the venue. In addition to the tremendous volume of ideas being submitted, the amount of discussion taking place within idea streams is just as large. In both of these scenarios, consumers are choosing to spend their own personal time interacting with a brand, and companies don’t have to spend millions on advertising to distract someone for (hopefully) 30 seconds of their attention. Some My Starbucks Ideas have received over 1000 comments and their site has had over 2 million visitors since November 2008.

3. Co-creation could lead to market leaders: Johann Fueller and Eric Von Hippel, from the MIT Sloan School of Management, recently put out a report titled Costless Creation of Strong Brands by User Communities: Implications for Producer-Owned Brands. Their focus was to understand the emergence of community brands (a group of people who share similar passions and form a group identity, logo and brand name to symbolize this common bond) and their impact on traditional commercial brands. Near the tail end of their study they posed a very important question “Are community brands and commercial brands antagonists or complements?” and then showed us the results from a hypothetical choice experiment: 78.2% of respondents preferred a co-developed and co-branded product. This blew any singularly produced manufacturer brand (15% preference) or community brand (1.9%) out of the water. The study showed that a community brand contributed authenticity, identity and high-use expertise which was complemented well by a commercial brand’s strong product development and production capabilities. Consumers and brands could potentially co-produce and co-brand a product that has significant market potential.

If you are going to co-create: here are some initial thoughts:

Projecting a thought – can the future be co-owned?
With customers already beginning to think of brands as something they “own” and with more companies employing a form of co-creation for product development, is it really off base to assume a form of co-ownership (vested interest in the final product by both the brand and consumer) in the future? From what we are seeing take place already, we think it’s entirely possible. Companies like Apple and Best Buy are seeing the benefits in a form of co-ownership. Apple’s SDK for developers to create iPhone applications and using iTunes as a marketplace to market and sell these items is an example of how co-ownership could play out.
We work in volatility and with a digital infrastructure that is only continuing to grow in size and importance. Co-creation exists as an opportunity today; co-ownership is a potential outcome for tomorrow.

Co-created by Jason Theodor (@jted) and Johnathan Bonnell (@digitalinfant)
*Please note that our timeline of product creation might not be 100% historically accurate, as it is our observation.

*Those whose work/thoughts influenced us in the creation of this report:
Matt Rhodes’s brilliant thoughts on co-creation
JP Rangaswami’s ideas in faster horses in the age of co-creation
Johann Fueller and Eric Von Hippel for their excellent work and (public) report
Matt Milan’s thoughts on consumer product use in the future @mmilan
And Henry Ford for giving us the model T