TIM Lecture 11

Question 1

Profiting from users/consumers: Lead users

Answer 1

Core Definition

1. Have needs that foreshadow general demand in the marketplace;
2. Expect to obtain high benefit from a solution to their needs.

Important consequences

3. Lead users often innovate to solve their own needs by developing prototypes
4. Lead users are often willing to freely reveal their innovations. Individual lead users may also start companies.

Note: A lead user may be a firm or an individual

Question 2

Lead Users / LU method

Answer 2

• Classical market research is based on a static concept of a representative customer
• In contrast, the Lead User Method focuses on users that are ahead of the trend
• Lead users are NOT leading- edge customers!

Question 3

Lead User method: Advantages

Answer 3

Classical market research:
– Aims at representative findings (“average customer”)
– Large-number studies
– Quantitative methods preferred for comparability

Problems: Average user…
– is mentally focused on existing reality
– typically has difficulties in articulating new needs (“sticky information” problem)
– mostly has no pressing need for new products

Lead user method avoids these problems

Question 4

Activating the potential: The lead user method

Answer 4

1.) Determine Lead User Indicators: a) Trends; b) Benefits from innovation
2.) Identify Lead User Group
3.) Develop product concept with Lead Users
4.) Check general acceptance of concept

Question 5

Lead user method: Critique

Answer 5

Risks / downsides:
– Development of niche solutions
– Problems with intellectual property
– Secrecy might be compromised
– Costly and time-consuming
– Internal acceptance: “not invented here”

 Operational difficulties:
– Identifying the right trends
– Identifying the true lead users
– Problems in lead user workshop 
– Problems in test of acceptance

Question 6

Lead User innovation: Beyond customers

Answer 6

• Lead Users are often not customers of your firm
• They may not have an incentive to “lead” you to their innovations
• It is the responsibility of the manufacturer to identify lead user innovations via lead user studies or other means.

Question 7

Summary

Answer 7

– Integration of users and consumers for knowledge advantage
=> Traditionally mainly for problem information: market research
=> Methods to successfully query for solution-related knowledge
– Net value of external knowledge to the firm varies tremendously
=> How easy is it to access the knowledge?
=> How “good” is the knowledge?
– Given the right context and strategy, an entire business model may be built on the knowledge held by others!
=>Designing your firm to do that may be tricky though