Numerous conversations around the Web focus on the power of the consumer. Customer generated innovation in products and services represent a trend which has risen to a new level, a likely result of growing social media opportunities.

BusienssWeek’s Bruce Nussbaum, in a recent article, Backlash Against Crowdsourcing, Co-Authoring and the rise of Participatory Production, stated: 

As customers become producers and take more and more control of the design of their products and services, the revolution (and make no mistake, it is a serious change in power and that is a revolution) they are generating is bound to unnerve those on the losing end. Companies that "get it" and begin to integrate consumer input into the actual making of stuff and experiences will find enormous opportunities.

Roger Dennis, writing in IdeaPort, claims crowd sourcing is expensive.

What is important - and what is missing - in the whole crowd sourcing idea, is a structured and methodical process. The use of ethnography coupled with the harnessing of customer generated product ideas sounds great and gets people excited, but in practise it’s expensive and time-consuming.

It doesn’t have to be expensive or time comsuming. In fact, the cost doesn’t have to be born by the manufacturer at all. In his book, Democratizing Innovation, Von Hippel documents how end users in extreme sports are among the most advanced markets for consumer innovation. Manufacturers can minimize risk by supporting consumer driven innovation externally through start ups until the invention is perfected and a market identified. Then, smart manufacturers buy the inventions.

An example Von Hippel cites of consumer innovation is kite boarding which spun off from sailboarding (a combination of surfing and sailing), and paragliding (an extension of hang gliding and parachuting). Combined, a new extreme sport and a variety of gear were brought to an avid market by and for creative thrill seekers.

A practical strategy for manufacturers is to encourage customer innovation to prove the concept and the need. Innovators build companies around ideas which are too small or unpredictable for larger organizations to explore. Manufacturers are spared the burden on R&D, the financial risk, and the resource drain necessary to develop products and markets. Citizen innovators can do it much faster and respond to feedback more quickly. When ideas prove successful, the larger manufacturers buy in. It’s a more hands off approach to the skunk works model.

Involving customers in the innovation process is a wise idea. Innovative consumers are adept at suggesting improvements. It may be a personalization an existing product. Personalized improvements discussed via blogs and wikis can draw enough interest to create a niche or define a whole new market.
To be fair, many designers are thoroughly capable of creating their innovations through consumer eyes. But consumers represent an incredible diversity of alternate perspectives. When you purchase a product, it is with a specific need in mind, not necessarily the same one the designer envisioned. Clayton Christensen reframes this activity as hiring a product to do a specific task. Like hiring an employee, performance is the measure of the product design’s success.

Ultimately, innovative consumers deserve a voice at the design stage. Some want to participate in the ideation. They want to offer suggestions and be heard. If not, the entrepreneurs will want to create their own companies. What’s wrong with that?

Consumers are more mature than ever. Mass market gives way to niche markets, specialty products (as in not yet available in big box stores) have the means through the Web of finding specialty audiences and evolving quickly based on consumer driven feedback and suggestions.

In the end, the question remains, what do customers want? The only way to find out is to ask. Then listen.