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Finding commercially attractive user innovations: A test of lead user theory

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  • Franke, Nikolaus
  • von Hippel, Eric
  • Schreier, Martin
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    Abstract

    Firms and governments are increasingly interested in learning to exploit the value of lead user innovations for commercial advantage. Improvements to lead user theory are needed to inform and guide these efforts. In this paper we empirically test and confirm the basic tenants of lead user theory. We also discover some new refinements and related practical applications. Using a sample of users and user-innovators drawn from the extreme sport of kite surfing, we analyze the relationship between the commercial attractiveness of innovations developed by users and the intensity of the lead user characteristics those users display. We provide a first empirical analysis of the independent effects of its two key component variables. In our empirical study of user modifications to kite surfing equipment, we find that both components independently contribute to identifying commercially attractive user innovations. Component 1 (the "high expected benefits" dimension) predicts innovation likelihood, and component 2 (the "ahead of the trend" dimension) predicts both the commercial attractiveness of a given set of user-developed innovations and innovation likelihood due to a newly-proposed innovation supply side effect. We conclude that the component variables in the lead user definition are indeed independent dimensions and so neither can be dropped without loss of information - an important matter for lead user theory. We also find that adding measures of users' local resources can improve the ability of the lead user construct to identify commercially-attractive innovations under some conditions. The findings we report have practical as well as theoretical import. Product modification and development has been found to be a relatively common user behavior in many fields. Thus, from 10% to nearly 40% of users report having modified or developed a product for in-house use in the case of industrial products, or for personal use in the case of consumer products, in fields sampled to date. As a practical matter, therefore, it is important to find ways to selectively identify the user innovations that manufacturers will find to be the basis for commercially attractive products in the collectivity of user-developed innovations. We discuss the implications of these findings for theory and also for practical applications of the lead user construct, i.e. how variables used in lead user studies can profitably be adapted to fit specific study contexts and purposes.

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    File URL: http://hdl.handle.net/1721.1/18073
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    Bibliographic Info

    Paper provided by Massachusetts Institute of Technology (MIT), Sloan School of Management in its series Working papers with number 4536-05.

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    Date of creation: 03 Jun 2005
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    Handle: RePEc:mit:sloanp:18073

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    Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA
    Phone: 617-253-2659
    Web page: http://mitsloan.mit.edu/
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    Postal: MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT), SLOAN SCHOOL OF MANAGEMENT, 50 MEMORIAL DRIVE CAMBRIDGE MASSACHUSETTS 02142 USA

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    Keywords: Lead User Theory;

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    References

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    1. Franke, Nikolaus & Shah, Sonali, 2003. "How communities support innovative activities: an exploration of assistance and sharing among end-users," Research Policy, Elsevier, vol. 32(1), pages 157-178, January.
    2. Franke, Nikolaus & Hippel, Eric von, 2003. "Satisfying heterogeneous user needs via innovation toolkits: the case of Apache security software," Research Policy, Elsevier, vol. 32(7), pages 1199-1215, July.
    3. Morrison, Pamela D. & Roberts, John H. & Midgley, David F., 2004. "The nature of lead users and measurement of leading edge status," Research Policy, Elsevier, vol. 33(2), pages 351-362, March.
    4. Pamela D. Morrison & John H. Roberts & Eric von Hippel, 2000. "Determinants of User Innovation and Innovation Sharing in a Local Market," Management Science, INFORMS, vol. 46(12), pages 1513-1527, December.
    5. Glen L. Urban & Eric von Hippel, 1988. "Lead User Analyses for the Development of New Industrial Products," Management Science, INFORMS, vol. 34(5), pages 569-582, May.
    6. Bearden, William O & Netemeyer, Richard G & Teel, Jesse E, 1989. " Measurement of Consumer Susceptibility to Interpersonal Influence," Journal of Consumer Research, University of Chicago Press, vol. 15(4), pages 473-81, March.
    7. Tietz, Robert & Morrison, Pamela D. & Lüthje, Christian & Herstatt, Cornelius, 2004. "The process of user-innovation: A case study on user innovation in a consumer goods setting," Working Papers 29, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.
    8. Gary L. Lilien & Pamela D. Morrison & Kathleen Searls & Mary Sonnack & Eric von Hippel, 2002. "Performance Assessment of the Lead User Idea-Generation Process for New Product Development," Management Science, INFORMS, vol. 48(8), pages 1042-1059, August.
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    Cited by:
    1. Chaminade, Cristina & Vang, Jan, 2008. "Globalisation of Knowledge Production and Regional Innovation Policy: Supporting Specialized Hubs in the Bangalore Software Industry," CIRCLE Electronic Working Papers 2008/20, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    2. Skiba, Florian & Herstatt, Cornelius, 2008. "Integration of innovative users as source of service innovations," Working Papers 54, Hamburg University of Technology (TUHH), Institute for Technology and Innovation Management.

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