In my last several posts I have described at a high-level what kind of online relationships businesses can have with their customers. From your businesses visibility online (findability) to having your product/service recommended to other potential customers (recommendation) to being as honest with your client base (transparency); businesses are figuring out how to utilize the internet to build deep relationships.
According to Wikipedia the concept of a prosumer first originated in a book entitled Take Today written in 1972 by Marshall McLuhan and Barrington Nevitt. In brief. this book puts forth the concept that with “electric technology” consumers would also become producers and therefore prosumers. The internet has allowed for this dynamic to take place.
Linux is the example most are familiar with. Linus Torvalds originally wanted to enhance a Unix like operating system called Minix for terminal emulation. After more than ten years of development, IBM and Sun have embraced the open source operating system and are using it as a differentiator in their battle with Microsoft.
Companies have increasingly turned to their customers and their customer’s network to drive greater innovation. Lego utilized its loyal customer base to create their latest version of their programmable robotics kit, Mindstorms. For 11 months a team of Lego’s most loyal customers, worked with Lego engineers to create every aspect of the software. Karmaloop has also partnered with it’s customers to create t-shirt designs. This relationship has Karmaloop’s users generating roughly 1% of the overall t-shirt designs and yet their designs comprise 15% of the revenue. (Over time the company can also expect to grow as a direct result of the affects of the Long Tail economy.) Companies like iStockphoto and Associated Content have similar models with prosumers continuing to power the online economy.
Other companies act as a platform for their customers to collaborate. In their groundbreaking book Wikinomics, Don Tapscott and Anthony Williams put forth the concept of an ideagora. The ideagora is a market place focusing on the exchange of ideas and innovations. Innocentive and NineSigma are companies used to highlight business/customer collaboration. These companies provide a platform (or marketplace) for scientists and businesses to come together to meet business needs. Companies can post requests for solutions to problems while other businesses can post descriptions of under-utilized IP. When a business finds a needed solution they can license it from the scientist/business that owns the technology or vice versa. This type of customer collaboration proves very successful for companies such as P&G which has over 27,000 patents.
This does not mean that every company can utilize their customers to assist in the creation of their offering and yet is important for companies to realize that the internet has enabled what I would refer to as a LivingMarket.
In my next post I will sum up some to the concepts that I have discussed over the last four posts.