Fans as a source of extended innovation capabilities: A case study of Xiaomi Technology

Abstract In the digital era, many companies are developing extended capabilities with external stakeholders. Fans are an important, but often untapped, source of extended capabilities, especially innovation capabilities. Our study intends to fill that gap by examining how companies develop extended innovation capabilities with fans. Although extant studies have examined user-based innovation, their findings may not be readily applicable to fan-based innovation because fans are more committed and have more demanding needs than regular users. We conducted a case study of Xiaomi Technology, a leading smartphone manufacturer, which grew rapidly by cultivating a group of motivated fans and soliciting their opinions. Our case analysis uncovers three important lessons that can help companies leverage fans to build extended innovation capabilities: 1) companies can build an online community to foster communal relationships with fans; 2) companies can assign different types of fans different roles; and 3) companies can organize internal operations around fans.