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.
In 2011, LibreOffice was voted one of the best open-source software. An open-source software has the particularity to have “its source code made available and licensed with a license in which the copyright holder provides the rights to study, change and distribute the software to anyone and for any purpose” (Andrew, 2008). In simpler words, it’s a software that anyone (with the right knowledge) can change, use, copy, improve and share.
LibreOffice, the homonimic non-profit organization, made a sustainable business plan out of this main product. They even exhibit a growth that most multinational corporation would envy. But how could a firm make a business out of a product that is free and on which the firm accepts to give up the control?
LibreOffice generates its revenue through mainly through donations. These donations are either directly cash or either materials. These donations come from enthusiastic users or from “strategic Advisory Board Members”, understand a long list of firms that have some interests in seeing a free competitor challenge Microsoft’s Office quasi-monopolistic position on this market. Although the number of employees and there wages are still undisclosed, these donations are sufficiently large to allow the company to run and to hire some in-house developers. The next straightforward question is now: why would so many people and firms pay give so much? What do they get from it?
Continue reading LibreOffice: The Document Foundation →
Every day, several dozens of Starbuck’s customers share their idea online about how to improve the customers’ experience at their favorite coffee place. They do so on MyStarbucksIdea, a simple but well-designed website that somewhat resemble a blog. Up to now, more than 190,000 ideas have been collected on MyStarbucksIdea. Besides allowing the customers to offer possible products or concepts, Starbucks also engages its customers through daily survey, test, games, etc…
But what’s new with this website? One might say that it’s simply another way to collect and monitor the customers’ feedback and satisfaction. The difference with a regular customers’ feedback tool has a twofold nature. Firstly, the extent of the customers’ feedback breaks apart from the previous habits. The customers not only grade and comment the new products but also offer ideas for the next step the corporation should take. Secondly, the extent of the following innovation taken by the firm is new. On average, 3 new products, concepts or variation are tested somewhere every week due to an idea posted on MyStarbucksIdea.
Continue reading My Starbucks Idea (revisited) – Consumers’ feedback in product design →