While on a business trip to Boston recently, I had the opportunity and honor to interview Eric von Hippel, the inventor of the Lead User Method. The method is based on the empirical knowledge that innovations are often not initiated by manufacturers, but users stand often as the propelling strength behind developments.
Popularity of the Lead User Method.
Angela Hengsberger: How can we keep the quality high and increase the popularity of the Lead User method?
Eric von Hippel: Your company does an excellent job, and will always have competition from companies that offer something cheaper at lower quality. That is true in every field, right? What it means is that you have to have your own market niche - one that appreciates your high quality and is willing to pay a higher price to get it.
That was my experience too, when running a company in this field and trying to teach major companies like Nestle, Ford and so on, how to use the method.
When selecting clients who will appreciate quality, it is important to consider whether the people will pay for the study are also the ones who will get the benefits from the better ideas that result. In a big company, there can often be a disconnect - for example, Corporate Marketing might have to pay for the study out of its budget, while increased profits benefit other parts of the corporation.
To better align a client's incentives, I often found that the best clients are smaller firms, where the owner is directly involved. When you are offering a higher-quality product and it costs more, you have to go to people, who for whatever reason, have the incentive to pay for it.
Angela Hengsberger: What do you think about this new approach to analye trends and needs first?
Eric von Hippel: Basically I like the idea of further experimentation of whatever type. You can also see, for example, direct search for Lead User communities. In other words, not trends, but what are gatherings of enthusiasts doing? And then work back to whether that is a trend.
For example, patients in medicine are very active around a certain area of innovation, like the artificial pancreas. And then you work backwards and say, ‘Well OK, which of those things actually are at the forefront and how can I use that to move the client ahead’.
So in that case you do not do any trend analysis at all. You first jump directly to the activity.
Angela Hengsberger: Question: Would you encourage us to make this new approach popular?
Eric von Hippel: I am enthusiastic about your company doing what it does, but I really cannot endorse a specific method or approach without deeply understanding the details. Every company has its special approach, and I have no data on which to evaluate whether it is better or worse than others.
Innovations in the scientific research community.
Angela Hengsberger: One of the greatest innovators of our time, Steve Jobs, said: "Stay hungry, stay foolish." Curiosity leads to endless need for new ideas and improvements, and not being satisfied by the current status. Are there lead users among the research community too? Do they highly benefit from innovations in the Lead User method?
Eric von Hippel: Researchers are looking for scientific novelty, they are not necessarily looking for practical novelty. Companies are looking for practical novelty. But sometimes the two overlap. One such overlap is research on novel methods in big data - semantic analysis and so on. These methods are now being tested for their ability to find lead users efficiently by two academic groups I know of - one is Professor Frank Piller’s institute in Aachen, the other is Professor Nikolaus Franke’s institute in Vienna.
Another possible overlap is studies of groups of lead users rather than individual ones. Because it is easier to get together in the internet age, you are getting more and more collaborations of lead users - and these may be easier to find than individual lead users.
In the case of industrial goods, for example consider the Open Compute project. In this project, Facebook and other lead users of data centre hardware have set up to collaboratively create advanced, open source designs. This is happening more and more, and can represent a source of easily-discoverable lead users for your firm and others.
Conclusion
If you found this interview helpful and interesting, you can find additional material related to this topic in Eric von Hippel’s new free book. “In the book there are lots of opportunities for companies that want to do Lead User studies of consumers.”
Ad Personam:
Eric von Hippel (born August 27, 1941) is an American economist and a professor at the MIT Sloan School of Management, specializing in the nature and economics of distributed and open innovation. He is best known for his work in developing the concept of user innovation – that end-users, rather than manufacturers, are responsible for a large amount of innovation. In order to describe this phenomenon, in 1986 he introduced the term lead user. Hippel's work has applications in business strategy and free/open source software (FOSS), and he is one of the most highly cited social scientists writing on FOSS.
Source: Wikipedia.at
