User Innovation: An Interview with Eric Von Hippel: Eric Von Hippel Talks with Jim Euchner about the Growth of User Innovation and Its Implications for Business

Eric von Hippel has been studying innovation by users for over 30 years. His book The Sources of Innovation (1994) documented the degree to which users were responsible for functionally novel innovations in a wide range of industries. In collaboration with practitioners from a range of industries, he developed the lead user method, an approach for finding and leveraging lead users. His most recent book, Democratizing Innovation (2005), documents the rise of user innovation communities and their impact on a wide range of industries, from software to rodeo kayaking. He spoke with Jim Euchner about the surprising prevalence of user innovation, the forces driving its growth, and its implications for business. JIM EUCHNER [JE]: I'd like to start with a description of what user innovation is. ERIC VON HIPPEL [EVH]: User innovation is users innovating for themselves to make products and services they want without manufacturer assistance. It's an entirely independent activity; manufacturers can get involved, but users don't need them. User innovation is very common. Users develop new sports for themselves, for example, and only later do manufacturers get involved. Rodeo kayaking, skateboarding, and parasailing are all examples. Businesses as users also innovate. Users were the first in the old days to develop lathes, milling machines, and other process equipment. Today it is often users--factories and manufacturers who have a real need for a piece of equipment--that develop it, rather than specialist machine builders. JE: Let's talk a little bit more about innovation by consumers. Are consumers really an important source of new product innovations? EVH: For decades, nobody thought that consumers innovated. The paradigm we all have in our minds is that big companies do marketing research, they find out what the consumers need, and they design and build new products and services for consumers. But this turns out not to be correct. In the beginning of every market, the market is small and it's uncertain. Manufacturers typically find small and uncertain markets unprofitable, and want nothing to do with developing products to serve them. When a new sport is evolving, for example, nobody knows if that sport is going to be successful or not, so no manufacturer really wants to get involved. At the same time, some users do care passionately about the newly emerging sport. These consumers are the ones who actually develop it and the specialized products used with it. For example, consumers developed the sport of mountain biking and the pioneering designs for the mountain bike itself. Eventually manufacturers come in when the sport and its appeal have become established. Systematically, in other words, producers stay out of the very new edges of things. Sports are just a familiar example. The same thing happens frequently in the food industry. Granola was initially made by users. It was something that users mixed at home and made for their own purposes--trail mix and so on. The specialized foods and packaging you can buy on mountaineering sites were all developed by mountain climbers who needed it for personal use. When you look at diet foods sold today, like liquid diets, they were first developed by users. So many things that today are mainline consumer products started out as prototypes developed by users facing a particular need. JE: When you talk about user innovation and producer innovation, you note that producers can be user innovators. Can you explain more about that? EVH: User innovators are individuals or companies who develop something novel in order to use it. Producer innovators are individuals or firms who develop something novel in order to sell it. Companies that innovate to improve their own operations are user innovators, just as are the individuals who develop novel consumer products in order to use them. Gillette makes some of its own razor-blade manufacturing machines, for example, because they have unique needs for that type of machine. …