Innovation is expensive and risky — and the US is falling seriously behind emerging economies in China and Israel in developing innovations. In a post last year, I discussed how low levels of innovation hurt American businesses and the US Economy.
Consumer Innovation to Solve Consumer Problems
Yet American consumers create 1000’s of innovations every year — more than twice as many as firms do, according to a study by innovation expert Eric von Hippel. And most consumer innovation are never patented, as the consumer never intended to make money from the invention, merely solving their own problem. Defending his research in a recent HBR article, von Hippel uses this example:
Say I build a new kind of mountain bike and ride it every day. I built it to use it, and I’ve gotten the private benefit I planned on as payback on my investment. So now I’m riding my new bike around and people see it, try it out, and ask me questions. At some point someone else decides to build a copy. Does that hurt me? No, it enhances my reputation, and that other user may make improvements to the bike that I can copy. If a bike company makes a commercial product out of my unprotected innovation and makes a lot of money from it, that may annoy me, but it doesn’t affect my original incentive for innovating. I got the reward I expected for the investment I made.
Consumer innovation solve consumer problems. Otherwise, why would the inventor spend time, money, and effort inventing. If enough people share a common problem, the innovation is almost guaranteed success.
By the same token, innovations developed by firms likely reflect products they CAN create rather than products they should create. That’s why many innovations fail — they reflect what engineers can do rather than what consumers want.
But, firms can capitalize on a consumer innovation if they listen.
And that’s another good reason to have an effective listening post, such as Radian6 or Trackur.
Listen to hear conversations where customer innovation is discussed. These conversations point to consumer problems and may identify ways consumers solved these problems already. Firms can then create similar innovations or incorporate innovations created by consumers.
As Dr. von Hippel mentioned, consumers will get pretty pissed off if they see you’ve stolen their invention, even though there may not be much they can do legally, since they didn’t patent the innovation. Firms who steal a consumer innovation do face the prospect of discouraging further innovation.
Instead, firms could recognize and reward the innovator — even though there’s no legal requirement. Rewards might include royalties from innovations or simply naming the innovation after the inventor. Rewarding inventors is the right thing to do and likely represents a much smaller cost than inventing the product in-house, which likely generated many failures before hitting on a successful innovation.
Rewarding consumer innovation encourages further innovation and motivates innovators to bring their inventions to YOU.
Imagine having a whole horde of innovators who create innovative products without any expense. It’s a sure-fire recipe for success. And, the best part is you only pay for inventions that bring money into your business.
The added benefit of buying rights to commercialize consumer innovation is you’ve eliminated the danger consumers will take their invention to a competitor or commercialize it themselves. It’s a win-win situation for everyone.
You can even enable consumer innovation by holding contests or creating opportunities to crowdsource innovation.
Food companies have mastered this technique for consumer innovation. They hold contests for consumers recipes using their products. And building materials firms do the same thing by holding contests highlighting consumer renovations. WordPress often holds developer events during their WordCamps where developers get together and code a new application during a session. So we KNOW consumer innovation can be encouraged by actions of the firm.
