The NYT has an article, New Economy: Markets Shaped by Consumers, about how consumers shape markets in a more direct sense than is often appreciated. An unmet demand, if its strong and left long enough, will creates its own supply.
Mr. Von Hippel and his graduate students have compiled a series of case studies that fit his model of user innovation. Mountain biking, for example, began in the early 1970's when cyclists wanted to abandon paved roads for rough terrain. At the time, commercial bikes were not up to the task, so cyclists took heavy old bike frames with balloon tires and bolted on motorcycle-type lever-operated brakes for surer stops when careering down mountain trails. The industry spotted the trend, and mountain bike sales now account for more than half of the bike market in the United States.
"Needs emerge, and users scrounge around and find something," Mr. Von Hippel said, "or tools and technologies emerge, and people figure out how to use them."
The same was true of fiberglass surfboards, wet suits, and skateboard decks and wheels.
It was also true of digital music sharing in 97-98. I was consulting for the RIAA at the time -- they were worried people using CD burners to copy CDs; the internet seemed like distant concern. But there was this frenzy of activity around ripping digital audio off CDs (as trivial as this seems today, there are some technical challenges and the pioneers had to roll-their-own ripping software to do it) and compressing it (also an area where the pioneers had to write a lot of their own software). By 1999, there were neatly packaged tools, Napster had been born, and the music world had changed.
When a publishing association asked me when they had to worry about the same thing happening to them, I essentially told them to watch for the lead users -- people developing clever new ways to digitize printed media. So far, this advice will have served them well.
An interesting question is what would have happened had the lead users for digital music had their needs met before they'd had to resort to writing their own rippers, compressors, and players and developing their own distribution networks. Would all this innovation still have happened?
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Posted by dapkus at December 2, 2003 10:16 PM | TrackBack