May 1, 2008

Bullpen: The Customer-Driven Network

By Bruce Bahlmann

The road to success usually begins with a great idea. Coming up with that idea, refining it, and following it up with additional great ideas, however, is not easy. Rather than hiring the best minds and trying to brainstorm your company into greatness, perhaps it would be easier to get your customers to do it for you.

No secrets

Differences between technology and service providers notwithstanding, companies traditionally invest in secrecy to gain unique product advantage in their marketplace.

Regardless of how secret ideas are generated and ultimately grown into products, it is usually only a matter of time before competitors come up with something similar. While not called "social networking," the public launch of a new product creates "buzz marketing," which prompts users, news reporters, companies and analysts to discuss the new product openly across multiple media outlets.

Through this open dialogue, competitors are able to connect the dots, allowing them to build highly competitive products that are often better and cheaper than the original. Product managers can gain insight from this process, but only when new product ideas are validated with customers and business executives will they yield wanted, profitable products.

Social networking changes this model. It transforms a slow, risky and secret process into one that moves fast and caters to subscribers' needs as expressed by a market's most vocal subscribers or potential subscribers - the new generation of users.

Depending on how easy social networking can be made, the less savvy user may also take part. Social networking can be as simple as a customizable portal. A more advanced model would let users upload applications.

Better execution

Launching products that have been properly socialized means generally less risk for companies as well as less opportunity for competitors to come up with something better and/or cheaper. Socialized products can be mined for their adoption, the ease with which they can be customized, or potentially even the number of blog threads they have generated. Consider TV shows that get cancelled due to lack of ratings only to return in response to popular demand. Socialization could prevent similar failures of good products and ideas due to poor execution.

The effectiveness of social networking makes it disruptive, and it could pick low-hanging product development fruit: ideation, feature refinement and market surveying.

In light of such disruption, traditional product development staffers need to learn new skills and embrace social networking not just as a convenient source of feedback or another product to launch, but rather as an efficient, skilled peer who can help them speed up the pipeline of new product development and current product refinement.

Intentional or not

Social networking tools will increasingly become part of what today mainly consists of a managed team (internal experts and focus groups) kicking the tires of new product ideas.

An example of product development via social networking comes from the recently emerged company Kluster. An "intentional" form of social networking, this effort represents a foray into "putting innovation in the hands of a crowd" (as a New York Times article described it). It also shows how such networking techniques could miss the average Joe.

Intentional forms of social networked products may include simply asking your customers what they want. Clearly, most companies already do this, but how they use this information varies greatly. There is also the issue of balancing the need for quality feedback with the subscriber's individual need to be left alone.

Intentional forms suffer from the lack of not only frequency, but also audience. For example, if the need is to expand the subscriber base, would it not be a good idea to survey non-subscribers, as this is likely the most attractive group? Surely it's as desirable to know why customers aren't joining as why they are leaving.

One attractive alternative could be described as a more "unintentional" model for product development that uses social networking, but doesn't really look like it. Antonia Townsend, an independent marketing and product development consultant from New York, describes such a use of social networking as a way to have subscribers define products without knowing they are doing it.

Within the framework of entertainment or even a game, service providers might devise a way to enlist or attract subscribers (and non-subscribers) to create their ultimate "future" service within a virtual world - the results of which could be mined to provide ongoing direction to future company research and development efforts.

The company behind this movement need not be an individual service provider with its own social networking unit, but rather a software as a service (SaaS) partner that provides a foundation of this capability to companies, which are then re-branded as their own and used to cultivate the needs, wants and creative juices of their subscribers. Meanwhile, the SaaS companies continue to evolve new ways and tools to capture the interest of their partners where by allowing them to provide compelling product development focused community entertainment.

Patently obvious

Secret lengthy product development cycles can actually foster future patent troubles rather than prevent them. In addition, documentation is often lacking in many product development exercises, such that many great ideas are not written down and as a result become forgotten as focus is maintained on the objective.

Such oversights are water under the bridge as companies plod along developing new products, but these oversights can come back to haunt companies in the form of patent infringement lawsuits. The other extreme would require companies to go to the expense of patenting most of their key ideas within a given area in an effort to protect themselves from competitors copying their ideas.

However, a more cost-conscious and "protective" strategy could be to streamline movement of ideas into the public domain, thereby expanding the list of prior art, thwarting competitive patent threats and allowing ideas to evolve at the speed of the Internet.

Such rapid evolution of ideas poured into the public domain not only helps speed up the evolution and maturation of products and services; it also limits the opportunities of those seeking to profit or slow the technical progress by patenting early ideas before they reach the public domain.

Rapidly exposing product development documentation into the public domain will have a profound effect of expanding the legitimacy of obviousness cases against newly filed patents. The upshot would be a reduction in the number of patents being filed against a new area while shortening the shelf life of existing patents. Even futuristic patents will be greatly challenged to predict massively changing technical fields.

More speed, less cost

Social networking, whether intentional or unintentional, drastically increases the speed at which companies develop products and services while decreasing the staffing costs of product development. As such measures take hold, filing frequency and applicability of intellectual property within these areas will also decrease.

Bruce Bahlmann is an independent research analyst. Reach him at scifilvralways@yahoo.com.