Friday, October 20, 2006

Outside Innovation—Patricia Seybold’s Take on Lead Users

Patricia Seybold just launched her new book called Outside Innovation which proposes using customers to help define new products and imbue innovation into those products. While Eric Von Hippel coined the term “Lead Users,” Patricia Seybold coined the term “Lead Customers.” In talking with her about the concept while she was compiling the book it appears she followed the same path as National Instruments in implementing its Lead User program. A careful study of Von Hippel’s Lead User program highlights a process that is very narrow. In order to apply the concept we had to expand it to include not only customers outside the target industry, but also those within the target industry. Lead customers according to Patricia’s definition “is that small percentage of your current customers who are truly innovative.” She goes on to highlight that they are not necessarily the most vocal, the most profitable, or even the largest customers. Nor do they represent the current majority of a company’s customers. The key difference is they care deeply about the product and are innovative in its use.

She highlights the Lego Mindstorms project as an example of a successful Lead User process. In October 2004, five key lead users were chosen to help design the next version of the product.

Patricia goes on to highlight National Instruments’ role in the Lego Mindstorms project and then discusses NI’s own Lead User program. Patricia interviewed me for the book and included many of the quotes from our discussion. I believe Lead Users can be applied to both the definition of the product as well as the definition of the target market. Drawing from “Crossing the Chasm” we labeled the former as Technologists and the latter as Early Adopters if for no other reason than to keep track of what a lead user team expects of a project.

In the book she hits on one of the key reasons LabVIEW has been successful – it’s an open environment for customers to create their own solutions. It accommodates a user’s domain knowledge and amplifies his creativity. LabVIEW fosters innovation among customers by letting them create their own applications in their own way. This brings the customer into the LabVIEW design process as well. Feedback from customers then drives the development of the LabVIEW environment.

Patricia’s book goes on to highlight the use of online communities for fostering communication with customers and the use of blogs in developing a voice behind the corporate web page.

Overall the book is a fast read with some key insights that many companies will find useful. It was impressive how many pages are devoted to National Instruments and in particular NI’s lead user program.

Best regards,
Hall T.


Anonymous Anonymous said...

Impressive as of how a user can play such a major role in improving/developing new concepts of using the product

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