Monday, January 30, 2006

Yin Yank

On a flight from New York to San Francisco, I had the lately-rare opportunity to actually sit and read a magazine. The February 2006 issue of Wired tagged along for the ride, and inside crouched an opinion column about the Sony DRM debacle (by Bruce Sterling) and the cover story revealing Lego’s embrace of an ubercustomer group that helped jumpstart their product development.
Until recently, companies were skittish about customer innovation, fearing that outsiders might leak technical secrest or that they simply lacked the necessary technical skills. But Lego warmed to the open source ethos. It’s clear to the Lego execs that Mindstorms NXT would be a lesser product without the MUPers’ (spell out) input.

Inviting customers to innovate isn’t just about building better products. Opening the process engenders goodwill and creates buzz among the zealots, a critical asset for products that rely on word-of-mouth evangelism.
Geeks in Toyland, Wired 14.02

Great point, to be sure, but what product doesn’t rely on WOM these days? With falling effectiveness of traditional media marketing and ever-increasing competition for customer’s attention (online and off), the best chance at (continuing) success is to engage customers in R&D efforts.

In contrast, Sony responded to their fear of piracy by black-boxing their offering and adding what amounts to spyware on their users machines. Great idea, Sony, wreck our computers. That’s the way to inspire trust in your dedication to the customer.

Why not come up with ways to see where your music is popping up and use the info to sign and distribute new and more artists?

Lego’s approach represents the antithesis of this attitude. Responding to the reverse engineering of their proprietary Mindstorms robot control code, they opened up their software licensing agreement to include a “right to hack."

Much like Firefox, this turns some of your best, most technically adept customers from potential competitors into partners-in-crime. Do you think Firefox would have ever been built if MSFT built the original IE code, let it loose on the world, then continued to cherry pick the best ideas and write them into the software? No way, instead, people would be writing extensions and plugins for IE.

In the end, this approach embraces your customers. If you can be trusted, they will protect your products at the same time they drive you mercilessly to keep up with their ideas. In the end, letting go of this control focuses your development efforts and helps you invest in the right opportunities.