Customer interaction as a source of innovation for start-ups

Most start-ups manage outplay more established players when it gets down to innovate. They think differently, challenge the traditional vision of business and are inclined to take risk. But how come that firms like Windows, that benefits from a huge market power, considerable financial means and count some of the brightest minds among their employees, fail to duplicate their method to innovate?

Part of the answer is to be found in the goals and the strategy of these firms. Their research of growth and profits is not always compatible with innovation (Volberda, 2011). But another part of the answer is to be found in the way they deal with customers. In this post, we will discuss whether start-ups are better equipped to turn benefits from customer interactions into innovation.

Start-ups have an impressive capacity to adapt and absorb the signals and information coming from their environment. And that capacity seems to disappear with the company grows. The backlash experience by Instagram two years ago (Warren, 2012) seems to illustrate it. At that time, Instagram, a firm known for its ability to predict and match customers’ needs as well as for its reactivity during its start-up stage, substantially deteriorated its image and lost a large part of its customers in 48 hours over a stubborn change of the product and privacy policy. Continue reading A source of innovation →