In this study, we analyze the commercialization process of user innovations in open communities. We have traced 16 cases of user innovators who have commercialized their own innovations or have been involved in the commercialization process to some extent. By developing and manufacturing new products, the user innovators in our sample created a fastgrowing community. They used low-cost manufacturing techniques and were able to start a new industry before established manufacturers could enter the market. The transformation process from a user innovation community to a commercial and manufacturing community brought about a number of major changes. In this paper, we track those changes as: the motives for innovating, the community size and characteristics, the type of innovation, the type of assistance and the disclosure of information, the form of communication, and competition between innovating users.

Literature on new product development indicates that on average around 40% of new products fail across different industries (e.g., Crawford, 1977;Crawford and Di Benedetto, 2008). Out of those that survive only few become widely accepted standard equipment in the industry (Utterback, 1996). Literature on entrepreneurship (e.g., Baron and Shane, 2008) and on innovation (e.g., Christensen, 1997) shows that such innovations often originate outside the boundaries of established firms. However, it is difficult to understand and analyze the exact source of such innovations and the entrepreneurial processes by which they are developed. It is therefore the aim of this study to shed light on how innovations become widely accepted by large segments of the market and specifically which demand-side forces are at work. An approach suitable for pursuing this objective is to focus on those individuals who are on the leading edge with respect to an important market trend (lead users) and their respective peer communities. As little knowledge is available, an explorative case study design is applied, working with cases from two different industries, specifically the medical equipment and sporting equipment industry. A longitudinal research design is used, extracting data from multiple respondents and various other sources such as reports, publications, databases, or community web pages. The research framework takes a process perspective by following the entrepreneurial processes from invention to commercialization and diffusion. In this process, micro-level variables at the individual and group level are analyzed as well as the barriers to be overcome by the individual innovator and the community. The findings show that communities play a central and active role in the entrepreneurial process. Community members provide valuable feedback on the overall potential of the lead users' ideas, participate by making concrete development contributions, acting as testers of the new products, and finally helping to diffuse the innovations inside and outside the community. We identify two pull effects on the part of the community: first, community members demand and facilitate the development of prototypes; and second, community members help to cross the chasm between first adopters and the early majority. This paper has various implications for entrepreneurship and innovation research. For entrepreneurship, this article points out peer communities as a specific kind of social network that plays a crucial role in entrepreneurial processes. For innovation research, this article emphasizes the interaction between lead users and their peer communities in the process of developing the next dominant product design.

No abstract

While many firms today proactively involve users in their new product development efforts using a wide variety of methods such as the lead user method, firm-hosted user communities, or mass customization toolkits, some pioneering firms are experimenting with the creation of sustainable producer-user ecosystems designed for the continuous exploration and exploitation of business opportunities. In this paper, the functioning of such ecosystems is studied with particular emphasis on the synergies they can yield. Based on an explorative and longitudinal multiple case study design, the producer-user ecosystem of the firm LEGO is analyzed, and three main actors in the ecosystem are identified: entrepreneurial lead users who aim to start their own businesses, a vibrant user community, and the LEGO company as the focal producer firm and facilitator for multiple user-to-user and user-to-producer interactions. Our study reveals three kinds of synergies: (1) reduced risk for entrepreneurial lead users and the focal producer firm, (2) the extension of the design space of the focal producer firm's products, and (3) the creation of buzz within the user community. Finally, the theoretical and managerial implications of our findings for innovation researchers and practitioners are discussed. IntroductionT here is rich empirical evidence that the locus of innovation is increasingly shifting from producer firms toward users of products and technologies, i.e., that innovation is becoming increasingly democratized (von Hippel, 2005). This shift has been accelerated by new information and communication technologies that allow users to share information and knowledge at low cost. At the same time, scholars and practitioners alike have developed a comprehensive set of methods that allow producer firms to leverage the creativity of users for their new product development efforts. Such methods include the lead user approach (Lüthje and Herstatt, 2004;von Hippel, 1986), firm-hosted user communities (Füller, Matzler, and Hoppe, 2008;Schau, Muñiz, and Arnould, 2009), and toolkits for mass customization and user design (von Hippel, 2001).While each of those methods has its specific strengths, it also has specific limitations. For example, the lead user approach bears the potential to generate breakthrough innovations (Lilien, Morrison, Searls, Sonnack, and von Hippel, 2002), yet it falls short of creating sustainable producer-user interaction. After all, the collaboration between the focal producer firm and its lead users ends with concept development at the lead user workshop. In contrast, the toolkit approach facilitated by mass customization platforms allows a more sustainable producer-user relationship, yet it is limited in its potential to create truly innovative solutions due to constrained solution spaces (Ogawa and Piller, 2006). Finally, firmhosted communities allow producer firms to leverage the knowledge diversity of a large number of users for their new product development efforts. This approach, however, is cost-intensive, and ...

In this paper we report upon a first empirical exploration of the relative efficiency of innovation development by product users vs. product producers. In a study of over 50 years of product innovation in the whitewater kayaking field, we find users in aggregate were approximately 3X more efficient at developing important kayaking product innovations than were producers in aggregate. We speculate that this result is driven by what we term "efficiencies of scope" in problem-solving. These can favor an aggregation of many user innovators, each spending a little, over fewer producer innovators benefitting from higher economies of scale in product development. We also note that the present study explores only one initial point on what is likely to be a complex efficiency landscape. Acknowledgements:We are very grateful to Sue Taft and Kent Ford, whitewater kayaking historians, and to Eric Jackson and Corran Addison, founders of important and innovative whitewater kayaking firms. All gave us extensive and very generous help in documenting the innovation history of whitewater kayaking. We are also very grateful to Dr. Christina Raasch, MIT Visiting Scholar, and to Professor Scott Stern, for their very helpful suggestions.