Eric von Hippel, founder of the Entrepreneurship Program at MIT, says companies owe their customers a debt of gratitude.
The reason,he said in an interview with the MIT Sloan Management Review, is that "surprisingly often, ideas for new or improved products come first from users who develop improvised versions to serve their own needs. Manufacturers then may discover, polish, and capitalize on user innovations--particularly if those innovations begin to catch on."
Here are three more of his insights on user innovation and why it's integral to businesses' growth:
Users 'hack' for practical reasons.
"Users who need a new product often take pieces of things they have around and put the pieces together to do what they want," says the professor, noting the smart companies are the ones who recognize this behavior and sell products that can be easily tweaked. One good example is Apple's App Store, which has been successful at selling consumer-made apps.
True innovation takes three steps.
Von Hippel says there are three stages to the the "New Innovation Paradigm." In Phase 1, users innovate to create the products they want. In Phase 2, or the adoption phase, other users "either reject or validate the initial innovation." Phase 3 only occurs if users validate the new product, but if they do, "companies, which refine and commercialize the innovation for sale," will find a new base of users.
Companies should encourage innovation.
Companies should think of "ways to attract designs to you, via toolkits or via interfaces," says von Hippel. Threadless, the T-Shirt company whose designs are designed, submitted, and voted on by customers, does this exceptionally well. The company makes millions in revenue and they haven't produced an item they didn't sell.