Which one do you think I should pick ?

Today is Saturday, it is sunny and warm outside. Perfect day to go shopping ! You are obviously going to spend this afternoon with your favorite side-kick. Your mission is to find the perfect outfit that will fit your shape, your personality, and evidently match your preferences.

You finally find these really cool jeans, but you are still hesitant about the top : the blue and black, or the white and gold one ? The retailer comes to you and says that the jeans and the blue and black top would be the perfect match. On the other hand, your friend who has similar tastes as you – so similar you have a couple of clothes in common – votes for the second option.

What would you do ? Who would you trust ? How to make sure which one is the right choice ?

As a matter of fact, when you are browsing the internet, you might encounter the same problem-resolving process.

When a Youtube user surfs on Youtube, they first type the title of the video. On the right side of the video, a section displays other videos. In this section, two types of recommendations are presented :

  • Featured / Related videos :

They are based on the Youtube’s product network ; that is to say that they are based on the site recommendation algorithm only.

  • “Recommended for you” :

These are based on the Youtube’s social network. In fact, another user marked the video you just watched as favoriteas well as another one. Therefore, the second video will be “recommended for you”.

Thus, which of these videos matches users’ preferences the best ?

In a study, participants were asked to watch videos on Youtube, and rate each of them from one star – Poor – to 5 stars – Awesome. One group had access to the product network only – Related-Featured videos – the second group to both product network and the social network – Dual Network – and the third group to user-generated links only – Recommended for you.

What emerges from the study is illustrated in the graph below :

The fact that the second group curve is the lowest shows that finding a liked video takes less time when using the dual network than any of the other networks. Thus, rather than proposing either one or the other, offering both at the same time gives the user more possibilities, more choice, and therefore, more opportunities to reach the right video.

Therefore, the most efficient way for Youtube to satisfy its users, is to offer them as many choices as possible using different methods : the product network as well as the social network.

So, next time you will go shopping and do not know what choice to make, try the clothes on in the fitting rooms ! – or buy both.

References :

Jacob Goldenberg, Gal Oestreicher-Singer, Shachar Reichman, The Quest for Content : How User-Generated Links Can Facilitate Online Exploration, Journal of Marketing Research, August 2012, 462-468, 17p.

Yang Sok Kim, Ashesh Mahidadia, Paul Compton, Alfred Krzywicki, Wayne Wobcke, Xiongcai Cai, Michael Bain,People-to-People Recommendation Using Multiple Compatible Subgroups, AI 2012 : Advances in Artificial Intelligence, 2012.

Value co-creation within the 3D printing industry

At the moment, 3D printers become a more common phenomena. The use of 3D printers enables both consumers and companies to fabric products that before either could only be produced in massive amounts or would be very expensive or time consuming to make.

A very basic 3D printer for consumers would cost you around $1,000.-, whereas more professional printers that are able to print more complex materials in high quality can cost up to $100,000.-. In other words, it does not seem worth it to own such an expensive device on your own.

That is exactly what the founders of 3D Hubs thought. 3D Hubs is a startup company that enables users to connect with owners of 3D printers in order to print a certain design of choice. The company claims that at this very moment, 14,399 printers are connected to the platform. To some extent one could say that by connecting with 3D Hubs, a printer’s owner is co-creating value. Moreover, the platform includes so-called ‘Talks’, where users can start threads about anything related to 3D printing. By enabling upvoting to sort out the popularity of comments on threads, users get actively involved as well. Also, 3D Hubs organizes events related to 3D printing in order to meet up with fellow 3D printed object fanatics. The founders have the ambition to eventually make 3D Hubs the ‘Facebook of 3D printing’.

What would be needed in terms of value co-creation to reach this goal? To start with, the design of the object wanted to be printed, is designed with software outside of the 3D Hubs platform. Designing a 3D object can be rather difficult. Therefore, if you do not have a design already, 3D Hubs recommends to have a look on Thingiverse or 123DGallery. Thingiverse and 123DGallery are community platforms where you can design and post and share your 3D design on. People can actively participate with these platforms by using existing designs of others, making new designs on their own, or edit designs and customize these into different versions of the product. That does sound pretty useful.

However, when having a look at the designs posted on these platforms it seems that the majority consists of designs that are either really simple products or products that do not have a purpose (e.g. weird looking jewellery). In order words, these designs do not seem to address problems that can be solved with mass market kind of products and therefore it would be more convenient to buy such products in any kind of shop.

In my opinion, in order to become ‘Facebook of 3D printing’, a platform should try to up with ways to let people share only their most useful designs that really are an improvement to mass market or mass customized products. Let’s create real value co-creation. I believe these platforms would be used way more when some mechanisms would be added:

– By giving additional incentive to designers next to ‘name and fame’, e.g. a monetary incentive or prices for best designs;

– By recommending 3D designs to users related to their interest.





Choose your customers strategically

Have you ever complained about a service or product at your most favorite firm’s Facebook page? Nowadays, we live in a complex world with an overload of choices. This results in different types of customers with their own specific demands, but it is hard to comply with every single niche. Firms are confronted to choose which type of customers they want to serve. This is the reason whether you feel neglected by your favorite firm or not.

In this article you will understand why a particular firm has a legitimate reason to turn down your requests and ideas. First, a theoretical part will be discussed. Followed up by a practical implication. At last, a discussion point is stated.

A framework called ‘Strategic Value Assessment (SVA)’ is elaborated in the article “Strategic Value Assessment and Explorative Learning Opportunities with Customers” by Nijssen et al. (2012). Initially, it starts with the innovator’s dilemma, i.e. firm struggles between the choice of responding to customers’ requests and protecting the long-term competitive position. Consequently, SVA provides a priori assessment of partner selection within the dynamic environment we live in. Why is SVA beneficial? A collaboration with every single customer is very costly and do not add value to the firm. Such a perspective best guarantees that the selected collaboration will bring strategic value, and specifically, allow for taking in new knowledge that stimulates new business development. It will safeguard new, exploratory learning that will materialize in future cash flow and revenue.

figure 1

In figure 1, a figure with all the variables and hypothesized relations are disclosed. The dependent variable “explorative learning” is the ability to extract knowledge from the collaboration with a customer and develop technological extensions and turn it into appealing new products for new markets and customers.

Secondly, ‘intensity of collaboration’ increases the involvement and interaction between the two parties. As a result, the two parties become more familiar with each other. Therefore, familiarity increases the chance of exchanging knowledge.

Thirdly, ‘lead users’ are a source of radical new product ideas. Without SVA the firm cannot distinguish the good and bad projects. However, with SVA, the firm chooses only the product ideas of lead users and avenue to future growth.

Lastly, under conditions of strong ‘dependence’, firms pursue short-term sales and profits by collaborating with customers that reduces the strategic and long-term effectiveness of the collaboration which results in focusing mainly on existing products and neglects developing new products for potential customers and markets.

Testing these variables with a sample of Dutch SME’s consisting a total of 136 firms provides the following insights:

  1. SVA has a positive impact on explorative learning which is beneficial to the firm for retaining a competitive advantage and sound future revenues. Also SVA has a directly influence on lead users and intensity of collaboration.
  2. Implementing SVA as a framework increases the likelihood that a firm will collaborate with its lead users.
  3. Reflecting partner selection at the start of the project (a.k.a. fuzzy-front end) of a new product development process evades the dependency problem. SVA prevents becoming too committed to only one option in an early stage rather than exploring all the potential opportunities.
  4. SVA can be used to distinguish the good ideas from the bad ones. It may serve as a justification to reject less promising new product venues suggested by current customers.

A practical implication:

Today, co-creation is a common phenomenon and widely discussed in the literature. However, refusing a customer and its requests put the relation between the two parties in jeopardy. Therefore, the short-term profits of the firm might decrease. If the firm raises awareness of the SVA as a motivation for the firm’s move, the customer’s understanding increases. Hence, this may preserve the relationship.

Discussion statement:

A limitation of this paper is the focus on Dutch SME’s which are relatively small in comparison with Amazon, Google or Apple. Assume the sample includes financial unconstrained high tech firms with a higher budget for R&D projects in combination with customer collaboration. The sample in the paper involved an average of 33 FTEs and 96% of all firms have 1 to 99 employees.

At the firm’s perspective, is it a good decision to implement SVA and deliberately pursue only the requests of lead users instead of the plebs?

My opinion:

I think it would be a matter of business strategy that the firm pursues. Choosing between focus strategy and an industry wide target strategy.

Nijssen, E.J, Hillebrand, B, de Jong, J.P.J, & Kemp, R.G.M. (2012). Strategic Value Assessment and Explorative Learning Opportunities with Customers. Journal of Product Innovation Management, 29, 91–n/a. doi:10.1111/j.1540-5885.2012.00960.x