We are very happy to announce that we will host a conference (German language) on connecting and managing innovation processes at Zeppelin University at Lake Constance. The keynote speaker will be Frank Piller, accompanied by Elke Baessler (Hilti AG), Herbert Koepplinger (Network of Automotive Excellence) and Alexander Lang (Webasto AG) who will provide detailed insights into the successful usage of open innovation. More Information on the event on our German microsite.

We would be really excited to meet some of our German speaking readers on the event, so please feel free to register.

Five good reason why it is time to believe again in Santa Claus

1. Integration of customers in the idea generation process

Scientific studies have recently shown: more than 80 percent of all products in market fail. Why should this actually be different with presents like the numerous attempts for exchange in big stores and the extensive offers on Ebay after Christmas impressively show? Wish lists are therefore an ingenious invention of Santa for making a present of something the presentee really has a use for. The acceptance of presents is thereby maximized by the same value as the exchange rate is minimized to the satisfaction of all people involved. And for all of those who already possess anything or are perfectly happy, Social Commerce offers the opportunity to receive a gift again.

2. Reduction of the in-house services by integration of agents

Who still does anything self today? Not only the large management consultancies, but also Santa Claus has long ago realized that thanks to globalization he can cost-efficiently outsource the whole process meanwhile. The more so because he has identified lead users, preferably parents, who gladly and first of all freely of charge take over these crowdsourced tasks in order to bring a joyful Christmas to their children. But even commercial providers have realized which market potential exists for professional Santas for instance in stores or shopping malls and since then they are successfully participating in the franchising-concept of Santa Claus.

3. Massive reduction of distribution costs by decentralization

Regarding the running costs incurring by the all-year maintenance of a logistics infrastructure only used at one day a year, the huge potential for savings becomes clear. The strategic decision of Santa to do without the maintenance of a sleigh and reindeers opens new potential for a decentralized organization of his channels of distribution. Presents are therefore the most time only delivered just-in-time by courier services, sparing Santa not only high storage costs, but also the burdensome way through sooted chimneys with a wealthy belly.

4. Outsourcing of all marketing activities

The cleverest decision of Santa Claus though was to have his whole marketing organized externally – by no less a figure than: Coca Cola. How else should the world have had found out that Santa is a corpulent, white-haired beard bearer with a red jelly bag cap? Especially through viral marketing activities like reading out loud or singing Christmas songs this message was spread to such an extent that meanwhile not any Christmas merchandising article can escape from the produced branding and every child in the whole world should have quite an exact idea of Santa’s appearance and his character.

5. Reduction of transaction costs by virtual organization

Writing to Santa Clause was practically always possible. Though, one got to consider the gigantic costs for sending a letter to the North Pole and the desired present back. No wonder therefore that Santa was one of the pioneers of networking worldwide in the course of a virtual organization. At northpole.com every small and big child can inform oneself about the organization of Santa Claus or write him an e-mail.

Santa Claus has so adjusted his business model very successfully on Open Innovation and has perfected creation of wealth in networks as an entrepreneur. Thereby he has some decisive comparative advantages in regard to other present service providers as the Easter Bunny for instance. This will as well ensure market shares in the future for Santa as a quasi-monopolist in Christmas businesses and will provide him keeping a high market value. The only question that now arises is, what actually does Santa Claus at Christmas time? – Damn right: holidays!

So therefore, not seeing him is a far cry from saying that he does not exist which is no prove at all! Therefore it is actually time to believe again in Santa Claus. What a dark world would that be, if there were no wishes, dreams and hope anymore? What a world would that be, if Santa Claus did not exist? ; -)

With this in mind, we wish all readers a merry Christmas & all the best for 2008!

B. Jospeh Pine II hold a very interesting keynote speech at the World Conference on Mass Customization & Personalization 2007 at Stata Center, MIT Boston about the topic “The Past, Present, and Future of Mass Customization”. We want to provide some outtakes out of this very interesting opening keynote because the topic correlates in very many ways as an addition to the interactive creation of value shown by Reichwald and Piller as well as a guideline for entrepreneurship in the area of individualizing mass products.

B. Joseph Pine II is the author of "Mass Customization" and "The Experience Economy".

Here the following parts of the keynote video:

Eric von Hippel recently hold a terrific keynote speech at the MCPC2007 at MIT about the topic User Innovation, in which he described the economic paradigm of highly efficient user-communities innovating collaboratively with the help of digital toolkits. Or in his own words:

“User have innovated historically - but the collaborative design has become so efficient that it is going to drive out manufacturer based design in certain areas.”

As a result, innovations are getting cheaper and topics like Intellectual Property or patenting will loose their importance when it comes to innovation. The reason for this is that users will collaboratively develop innovations and reveal them to others for free even if the manufacturer does not provide a toolkit. To illustrate this, von Hippel referred to examples in the sports and software industry where users built their own toolkits for interaction because of the absence of any corporate solution. Von Hippel directly adressed the manufacturers in the audience:

“No one ins preventing you from patenting things. But the point is that you are competing with people who will freely reveal. Your secret is basically hostage to the person who has least to loose.”

So, following Eric von Hippel’s thoughts, manufacturers have no choice, but to harness the enormous potential lying outside the boundaries of their organizations by developing toolkits and interfaces for user innovation. Otherwise they have to fight against their most loyal customers and loose a competitive advantage in the long run - because other competitors will collaborate with their lead users. Even companies that are successful today should keep in mind that there is always someone out there having least to loose.

Here you can watch the complete keynote speak:

Eric von Hippel MCPC2007 MIT Boston Part1

Eric von Hippel MCPC2007 MIT Boston Part2

Eric von Hippel MCPC2007 MIT Boston Part3

Eric von Hippel MCPC2007 MIT Boston Part4

The Open Innovation company Fellowforce has started a Tagline Challenge opening up the decision on its tagline to the contributions of its users. They were offered a reward for the best tagline that should make it on the Fellowforce frontpage. We recently had a very interesting talk with Ruben Robert, CEO and founder of Fellowforce, at the MCPC 2007 at MIT in Boston where we promised him to spend some time thinking about his Tagline Challenge and how our contribution to it could look like.

We finally seized the idea behind Fellowforce itself and invited our fellow students at Zeppelin University in Friedrichshafen, Germany, to join us in finding the perfect tagline for Fellowforce. Almost exactly as Fellowforce does in regard to the innovation community worldwide over the web, we thereby crowdsourced the Tagline Challenge into our university: we organized a digital ideation pitch inside our university’s intranet and we were absolutely astonished about the lots of positive reactions Fellowforce received. While our fellow students were sending more and more brilliant suggestions - we got increasingly into trouble about the decision which one of those we should actually choose as the perfect tagline for handing in to the Tagline Challenge.

We finally realized that there probably is no single tagline representing everything that is at the core of the idea of Fellowforce. There were lots of very good suggestions for a tagline among our students’ contributions, like there are already some very good ones inside the pitch on the website, but none is meeting all the rich expectations people have regarding Fellowforce. All people we spoke to, highly acknowledged the great potential Fellowforce holds in their opinion for shaping the future, determining how we will deal with ideas and opening up innovation in general. But on the other hand, we were surprised about the lots of different perspectives they had on Fellowforce and about the diversity of their hopes and expectations.

We therefore have realized that the only tagline that is actually possible for Fellowforce is emerging out of all those voices. It lies in the force of the diversity of all of its users, in the way they interpret Fellowforce and will continue to constantly reinvent it. Only combined alltogether, they really hold the idea that is at the inner core of what Fellowforce is all about - inspiring great people!

This is the reason why we want to suggest not to fix a single tagline, Fellowforce should solely stand for in the future, but to leave what Fellowforce is and will be all about to the thoughts of its fellows. And therefore, it is all their voices what should be represented in Fellowforce’s tagline. As finding a tagline for Fellowforce should be a continous challenge, our proposal is to give its tagline back to its users, as it should constantly rotate over a specific period of time representing all the people that stand behind Fellowforce.

As Fellowforce has found new supporters for thinking in a new and revolutional way about ideas and innovation among our fellow students, we are sure the company will continue to find fellows fascinated about the idea of collectively contributing to Fellowforce shaping the ideas of the world. They just got to listen on their voices. Here are the ones we were happily able to record among our fellow students:

“fellowforce - Inspriring People, Inspiring Innovations”

“fellowforce - Breaking Barriers”

“fellowforce - Sourcing the Wisdom of the Crowds”

“fellowforce - The Idea Highway”

“fellowforce - Rewarding the World’s Ideas”

“fellowforce - Start. Right.. Here…”

“fellowforce - The Force of Innovation”

“fellowforce - Impeccable Innovations”

“fellowforce - The Brain Pool of Solutions”

“fellowforce - Passionnovation”

“fellowforce - Collective Business Enabler”

“fellowforce - Longing for Changes”

“fellowforce - Enlivening Innovations”

“fellowforce - The Playground of the Creative Class”

“fellowforce - Solutions Emerging”

“fellowforce - Enabling Innovations”

“fellowforce - Ideas Making a Difference”

“fellowforce - Utilizing the Brains of the World”

“fellowforce - Challenging People”

“fellowforce - Crowdsolutioning”

“fellowforce - Innovation Zeitgeist”

“fellowforce - The Best Way to Protect Ideas, is to Realize them.”

“fellowforce - Ideas Creating Value”

“fellowforce - Bringing Ideas to Life”

This Friday, we are travelling to Boston/MA for the MCPC 2007 World Conference of Mass Customization and Personalization which is the primary event in this domain. Bridging between academic research and management practice, the conference aims to provide an interactive platform to learn about strategies and to discuss the latest technologies and enablers. We will be visiting the academic part at the Massachusetts Institute of Technology, Cambridge, from October 7-10 2007, with an interdisciplinary focus on the new advancements in the field. The second part, we won’t take part in anymore, will take place at HEC Business School in Montreal, Quebec, Canada, in the form of a business seminar.

The conference is jointly organized by MIT Media Lab, MIT Design Lab, RWTH Aachen University, Hong Kong University of Science and Technology, and HEC Montréal Business School (École des Hautes Études Commerciales). The conference shall bring together different voices and thinking on the topic from an interdisciplinary perspective. The interdisciplinary approach comprises the perspectives of management and economics, engineering, design and information technology from an academic as well as a practitioners’ perspective. The MCPC will become the largest event in the field of mass customization and personalization, with more than 150 keynotes, presentations, panels etc. on the topic. Further information is provided by Frank Piller, RWTH Aachen, who holds the function of Program Chair of the conference.

We are looking forward to meet many interesting people there, we would be glad to have lots of inspiring talks with. Hopefully, we will be also able to speak to some people at MIT Media Lab. If someone of our readers is visiting the conference as well, just give us a note and we would be glad meeting you there for discussion and social exchange.

A few weeks ago, Steve Poland officially started the ambitious project Ringside Startup to develop, fund and market a startup with the participation of the crowd. A few days ago, the attempt was given up because Poland had failed his expected goals in funding. From our point of view, however, the idea is still interesting and the question remains whether it is possible to launch a startup by collaboration of networked individuals.

We always thought of Open Entrepreneurship in this manner - if such a project succeeded, it would support our idea of the creation of wealth in networks. At the moment we often have to focus on focal networks in our research, giving the creative crowd the possibility to act as micro-entrepreneurs without any risk because the focal center is providing all critical business processes. A crowdsourced startup however would change the game essentially: the decentralized contributors would define, develop and control the whole process. In order to reflect on the failure of Ringside, we would like to highlight the most essential steps of the project.

22 March - Launch of the project

“I’m raising $20,000 in reader/sponsor contributions to launch a web start-up. Contributor participation entitles you to vote on actual business decisions — the first of which will be which idea that I’ve exposed via Techquila Shots will be the web start-up I build from the ground up. I will blog about this entire journey as openly as I can — taking you through the entire start-up process (beginning with incorporation — whether to be LLC or S-Corp Inc; in Delaware or NY) and providing feedback from VCs to Entrepreneurs along the way. My hope is that we’ll all learn quite a lot about the start-up process from this experience.”

26 March - Introducing different business ideas

Poland introduced 5 community concepts and asked the crowd: „Which one of these ideas do you feel has the most potential for ‘success’?”

4 April - The end of the journey

“I don’t believe at this moment that I can raise the contribution size I have been hoping to raise ($10k minimum; $20k goal). My belief was that I could get tons of entrepreneurs that are very interested in the entire start-up experience. […] Well, we’re still going to get to hear that valuable insight – only, I’m starting a venture now. I’ve aligned with a programmer that believes in one of my ideas just as much as I do. Thus, we’re moving forward on it.”

In our opinion, the Ringside project failed because of its setting and predefined conditions. Poland wanted to engage people to donate money instead of providing shares with the possibility to make at least a small profit. The incentive to donate money to a startup only to see what happens with it, seems to be not enough. If Ringside had been a success, the only winner would have been Poland himself, holding all property rights. Collaboration, however, is about true contribution and an advantage for all people involved in such a project - and who should therefore benefit from it as well. As the crowd obviously made clear to Poland by not contributing in the intended way, collaboration is not about standing applauding on the ringside watching the protagonists inside the ring. And it is definitely not about one single person only using the crowd.

Patty Seybold, inspired by the Web 2.0 expo, has made a nice package, combining Web/Biz 2.0, Open Innovation and Customer Integration in her optimistic way.

The Web 2.0 Culture: Loosely-Coupled Innovation

There are no evil empires that can stop innovation. Anything is possible. It’s a culture of DIY, roll your own, solve your own problems, invent a new toolset, secure in the knowledge. […] So, one reason why Web 2.0 is not a fad that will go away or that you can ignore like just another technology buzzword is that it is a cultural phenomenon.

Some people still think of Web 2.0 as a technical innovation - but that‘s only one part of the truth. The main spirit of this phenomenon is people interacting with each other. Above all, also from our point of view, Web 2.0 is a social innovation.

Web 2.0/Enterprise 2.0 Mission: Empower Customers and Employees

In Web 2.0, giving end users the tools to create and publish information, to create and deploy applications, and to mix and match information and applications to create new inventions has provided a platform for innovation.[…] People are inventing new businesses, new business models, new games, new tools, and forming new communities. These new communities don’t just discuss topics of interest; they build things. They solve problems. They invent together.

Empower Customers–Then Align around Their Outcomes

We can harness the Internet to make it easier for us to design, sell, ship, and service our products, but we still have people to lead and inspire, jobs to do, results to achieve, work that we all need to get done in order to contribute value.

Consumer, use the global network to create new things, inspired and driven by the interaction with other consumer and organization harnessing enourmes potential of lead user. The former lead user, have realized their power and using it to produce profit for the firms and for themselves. Openeur are on the rise.

An interesting event with lots of inspiring conversations was this year’s german conference by Frank Piller about Mass Customization. Besides speaking to Frank Piller we were excited about talking to Jochen Krisch and Lukasz Gadowski about the german founding scene. It is nice to see that something seems to come into gear.

We have also interestedly talked with Reinhard Prügl of the User Innovation Initiative of Wirtschaftsuniversität Wien who currently develops a promising approach to a better identification of Lead Users and who has already been employed several years in researching the creation of value in networks. We will anyhow intensivate the exchange in this regard and will see whether there will develop opportunities for an even deeper cooperation.

The cases discussed at the convention reached from the famous customization examples Spreadshirt and mi:adidas to the Austrian ski manufacturer Edelwiser. From our point of view are thereby especially the different degrees of customer integration into the creation of value important regarding development, design and sales. In our opinion, Mass Customization is an interesting link to Open Innovation and a span of application for companies using external resources within the scope of Open Innovation. By Mass Customization there is an opportunitity to reach scale effects for user orientated customization of products and to bank on a consequent modularization of components. Its full potential however, Mass Customization may only be achieved in the interplay with Open Innovation, if the customer as a creator of value is set in the focus of the company.

Under a model of Zeppelin LZ 129 in original size, the first Innovation Night took place on 15th November within the series Innovation B in the Zeppelin Museum in Friedrichshafen, Germany. Oliver Gassmann, University of St. Gallen, Switzerland, was guest speaking on the innovation power of companies. Starting-point of his speech was that innovations often arise contrary to any rules and that higher expenditures for R&D do not guarantee success.

Gassmann mentioned a study of Kienbaum consultants on the innovation efficiency of companies monitoring the output of 1919 new ideas. Out of all ideas 369 concrete projects arose, 176 became finished products and 52 of them were brought to market entry. 24 of these were total losses, 17 developed on average and only 11 provided real success.

One could easily believe of innovations being only chance, but according to Gassmann you got to increase the probability of success. He therefore recommended an integrated management of innovations in the context of corporate strategy. Processes should be actively and systematically designed, but also free spaces should be provided. Furthermore important is to permanently question the principles a company believes in. Gassmann underlined that innovation to 80 percent is only recombination of existing elements. Therefore innovation in networks through integration of lead users and cooperation with other companies is fundamentally important. Without trust however, none of this would work. That is why man stands in the centre as the core of innovation.

After the Innovation Night we had the possibility to talk with Oliver Gassmann especially on his work on Open Innovation at the Institute for Technological Management at the University of St. Gallen. Thereby Gassmann told us that he will visit Henry Chesbrough in Berkeley soon and potentially a joint book project is planned with Chesbrough. So we are curios if this collaboration will fulfill our expectations.