CreateSpace was originally founded as CustomFlix Labs, Inc. in 2002 and acquired by Amazon.com Inc. in 2005. Prior to launching the Books on Demand service, CreateSpace was already providing inventory-free, physical distribution of CDs and DVDs on Demand, and video downloads via Amazon Unbox.

In addition, the company is no longer charging setup fees for books, audio CDs and DVDs. Authors, filmmakers and musicians can now offer their works on Amazon.com, CreateSpace.com and via their own free customizable eStore without any inventory, setup fees or minimum orders.

“The new CreateSpace Books on Demand service removes substantial economic barriers and makes it really easy for authors who want to self-publish their books and distribute them on Amazon.com,” said Jeff Wilke, senior vice president, North American Retail, Amazon.com. “The service will also give millions of Amazon customers access to an even greater selection of books, just as CreateSpace’s DVD and CD on Demand services are adding significant selection to our movie and music catalogs.”

Books on Demand works the same way as CreateSpace’s DVD and CD on Demand offerings. CreateSpace books sold on Amazon.com are printed on demand, display “in stock” availability on Amazon.com and can be shipped within 24 hours from when they are ordered. The books are automatically eligible for Amazon programmes such as “Search Inside!”, “Amazon Prime”, “Super Saver Shipping” and so on.

There are no setup fees or minimum orders for the CreateSpace on-demand service. Members are required to purchase and approve a proof copy of their book, CD, and/or DVD before titles can be produced on demand. Books published via the CreateSpace Books on Demand service are printed with high-quality, full-colour paperback covers. Black-and-white or color interiors in multiple trim sizes can be selected as options. Members can also order high-quality copies of their book, DVD or CD at competitive wholesale prices.

An important aspect of the CreateSpace service is that the creator of the work retains the rights to the work. There is no attempt to ‘muscle in’ on the future earning potential of the work, should it become successful.

The scope of the CreateSpace service certainly provides plenty of options for content creators, especially in video. They can sell in DVD, HD-DVD or video download. Blue-Ray is due to be added to the roster in the near future. Additional services include assistance with cover artwork, conversion of videos to DVD’s, high definition capture and authoring to HD-DVD, and high volume disk replication.

Steffen Hoellinger, writing on the Openeur website, compares the retailer’s share of a commercial DVD sold on Amazon.com with that for a DVD sold on CreateSpace. The content creator retains a much higher percentage of the selling price when the product is sold through CreateSpace. For example, a 100 page black and white book with a list price of $25.00 sold through a CreateSpace E-Store would earn the author a royalty of $14.85 per sale. This raises the possibility that CreateSpace might become a distribution channel of choice for authors, film makers and musicians. If a writer or artist already has a public profile, is it necessary for them to contract with a publishing company to publish their work, if they can sell directly to end users and keep a much higher portion of the retail price for themselves?

The CreateSpace on-demand publishing service is not the only one of its kind – Lulu.com also offers self publishing services for books, digital downloads, CD and DVD. If CreateSpace provides publishers with an effective level of access to Amazon.com users (in other words, items available on CreateSpace show up in the search results on Amazon), then Lulu.com may find itself being squeezed out unless it can form an alliance with another heavyweight such as a mainstream search engine or social network.

Ponoko is the brainchild of software entrepreneurs Dave ten Have and Derek Elley. The business was founded on ‘the disappointing experience people face when making (individualized) products’, citing complexity and high financial and environmental costs.

Encouraged by the rise of what they call the Internet connected ‘creative-class’, along with smarter, faster, smaller and cheaper digital manufacturing hardware (laser cutters, CNC routers and 3D printers that connect to your everyday PC), they formed Ponoko, to make real the idea of mass-individualized products created by the Web community and made on a globally distributed network of manufacturing hardware, controlled from any PC.

Users create product designs which they upload to the Ponoko site, and select the materials to be used in manufacturing. Ponoko then makes and delivers the product, or the product parts. This making process can be used to perfect the design.

The next step is to make the final design available for sale through Ponoko, by posting it in the Ponoko showroom for people to view and buy. Ponoko can make the product and deliver it to the customer or, alternatively, deliver the parts to the user for final assembly and delivery to the customer. Ponoko handles the payments between customers and the user whose design is purchased.

The other possibility is that customers could buy a design and make it themselves, using desktop manufacturing systems (laser cutters, CNC routers and 3D printers). While 3D printing systems are currently very expensive and impractical for home use, a number of separate projects are currently underway on 3D printers that would be affordable for home users.

Ponoko’s founders take the view that today’s product making and distribution model is financially and environmentally unsustainable. It is also under pressure to digitize like the music and video industries. The hold the view that because today’s 100-year old product making and distribution system is so ingrained into our every day lives and delivers so much benefit, problems are not so obvious. However, they make a number of points in relation to industrialised manufacturing:

1) Making and delivering (individualized) products is a time consuming, complex and expensive process. This pain does not fit well in a world that increasingly demands instant satisfaction from mass personalized and customized products at low cost.

2) Product making and distribution is cost prohibitive for new entrants without relatively deep financial reserves. This is stifling mass creativity of real products and the progress of humanity on unimaginable fronts.

3) Low cost mass production and global distribution relies upon using lots of cheap energy and labour. But these two resources are running out.

4) Product making and distribution is a major contributor to the global warming problem (according to the WRI, perhaps 20% of the problem). Being environmentally unsustainable, the increasing ‘carbon currency’ costs also make the current model financially unsustainable.

5) Finding individualized products is very difficult and buying such products is a time consuming, relatively complex and expensive burden.

Many of these are very valid points. For existing businesses that use mass customization model, there is already a saving of working capital in not carrying finished goods inventory. However, working capital must continue to be used for raw materials or components.

Ponoko proposes to eventually use a business model where product design data is sold digitally, and downloaded by customers for manufacture at home. If a business (or individual) can move to a situation where it can sell designs as data, it immediately becomes a seller of digital information rather than a manufacturer. All of the expenses related to manufacturing can be eliminated completely, as the company moves towards a purely digital trading model. Ponoko is attempting to position itself as a broker that joins digital design vendors with customers who will become ‘end-manufacturers’ as well as ‘end-users’.

However, it does not automatically follow that a distributed model will provide large reductions in carbon emissions. The energy expended in moving finished goods around the world might simply be replaced by energy expended in distributing raw materials more widely in a distributed manufacturing model. However, this does not take away from the potential of the Ponoko business model to actually bring about the ‘post-industrial revolution’.

A distributed model significantly lowers the barriers to entry for new product creators, and reduces the financial risk. With Ponoko, creators can ship digital product designs with the click of a mouse, rather than physical products requiring costly handling and delivery. And because product designs can be sold to a large global audience from day one, pay back periods can be shortened.

In addition, Ponoko’s proposed distributed manufacturing model means that the marginal cost of selling each additional example of a design is practically zero. (Once the design is completed and on the market, it costs almost nothing extra to the creator to sell one extra copy. There is no requirement to use up materials or components, only the need to transmit the design data to each new customer.)

Because no physical product exists until purchase, product design collaboration makes it possible for everyone to co-create and personalize ‘almost anything’ they need and want. Ponoko says that, as adoption increases, prices for their design-to-order and made-to-order commodity type products will become unrecognisably low.

Ponoko is currently in the beta testing phase. The first manufactured product made by Ponoko from a user’s design was recently unveiled on the Ponoko blog.

While Ponoko is positioning itself as a broker of digital designs in the longer term, if it is successful in the medium term, it implies that significant investment in manufacturing capacity will be required by the company to fulfill orders for finished goods placed through the site. Ironically, if Ponoko is to be successful it may need to become a big manufacturer before it can become the ‘iTunes of design’.

Slacker says it has millions of songs with the breadth and depth increasing continuously. The extensive Slacker music library is organized into numerous professionally programmed genre and sub-genre stations and over 10,000 stations that are built around specific artists. Personalization options available to customers include adjusting stations to play more popular vs. more eclectic music, newer vs. older music, or even to play more tracks that the customer has tagged as favorites. Other features include:

• Log in from any PC or Mac to hear personalized stations in CD quality
• Playback through web player, jukebox software and portable devices
• Create stations by combining favorite artists
• Select favorite tracks/artists to play more often and ban other tracks/artists
• Click through album cover art, band profiles, reviews and artist photos
• Easily share stations

Slacker has acquired rights from content owners, including SONY BMG, Universal Music Group and hundreds of independent labels. The service offers Wi-Fi and satellite music distribution, as well as what they call ‘DJ intelligence’ embedded in portable players. Slacker states that customers can now “play highly personalized, continuously refreshed radio stations everywhere they go”.

The following comments were attributed to Dennis Mudd, CEO of Slacker: “Personalized radio is a great way to listen to the music you love without having to work at it. The only problem is that until now, personalized radio has been stuck on the PC. Slacker solves that problem. Now you can just kick back and listen.”

The reason Slacker may become a rival for the iPod/iTunes is that the forthcoming Slacker Personal Radio Players will enable music lovers to play personalized radio everywhere they go. The new devices include integrated Wi-Fi and an on-board Slacker DJ. The company says that the Slacker DJ combined with the new Slacker caching system guarantees personalized CD quality radio stations to be played everywhere, even when not in Wi-Fi range. Slacker customers get deep, personalized radio stations with optimized radio programming sequences, continuously refreshed and updated to include personalized new music.

Additional Slacker device features include:

• 4″ full screen display featuring album art /reviews, artist photos/bios and visualizations
• Support for MP3, WMA and video as well as “saved” radio tracks
• Automatically save and refresh personalized stations via Wi-Fi, Satellite or USB

Slacker is currently in discussions with selected partners to provide Slacker Personal Radio through a broader range of devices in the future. In the second half of 2007, Slacker device owners in the U.S. will have the option to purchase Slacker Satellite Car Kits that update the Personal Radio Player with new content through a breakthrough satellite broadcast system. Slacker car-top antennas receive high-speed music feeds from satellites throughout the continental United States, while the integrated Slacker DJ ensures favorite stations stay current.

Slacker Basic Radio is advertising funded and will remain free to use on Slacker software and portable Slacker Personal Radio Players, while Slacker Premium Radio will launch later in Q2 2007 at $7.50 per month.

Slacker premium service offers no advertising, unlimited skipping, and the ability to save radio tracks to a library.

The free beta Slacker Personal Radio service is available now at www.slacker.com. Slacker Premium Radio will be available in Q2 2007 and Slacker portable devices in early summer.

Industry experts said that the offering was likely to prove attractive to customers. “They’re leveraging multiple distribution channels, so they won’t be just satellite radio and they’re not quite an online music provider either,” Susan Kevorkian, of the IT analyst firm IDC, said. Slacker describes itself as the world’s first Personal Radio company. This hybrid of mp3 player and radio service is something of a step beyond the ‘personalization through massive product variety’ approach used by online music services.

Einat is a lecturer and researcher at the College of Judea and Samaria in Israel. He used the LCD screen as his inspiration for the new technology, comparing the fraction of a second that it takes an LCD screen to refresh with the long delay in printing a page using current inkjet systems. The article describes how:

Instead of emitting light, his idea is to emit ink. “We found a way to make a huge print head. If the print head is the size of the media, there is no scanning any more,” says Einat.

When Einat says huge, he’s really talking about nozzle numbers rather than physical dimensions. His prototype print head measures a modest 12cm by 12cm but contains an impressive 57,600 ink nozzles – think pixels on your LCD screen – for drop-on-demand delivery. The head is made from silicon wafers forming small micro-reservoirs for ink which each feed four normal inkjet nozzles by capillary action. Grouping the nozzles into four overcomes the flow problems with conventional series designs. Laboratory experiments show a large head the size of a piece of paper could be practical.

The advantage of his system is that one page could be printed instantly, with hundreds more pages following in a few seconds. All you’d need to do is move the paper into position, print the whole image at once, and move the paper out again – rather like a simple printing press.

The Guardian article speculates that the technology, if popularised, could facilitate on-demand printing of books. I am not so sure about this, as the rapid printing of pages is only one part of the process required to actually manufacture a book.

This is not to say that the idea would not work; however the advances in quick inkjet printing would need to be coupled with other technologies that could collate, bind and cover the book to the same standard as a factory printed version.

Hod Lipson notes that rapid prototyping machines currently cost from US$20,000 to US$1.5 million, whereas the standard version of their Freeform fabricator can be assembled for around US$2400.   But the researchers are not intending to commercialise the venture – quite the opposite in fact.  Full documentation on how to build and operate the machine, along with all the software required, are available on the Fab@Home website, and all designs, documents and software have been released for free.

The article quotes Evan Malone:

“We are trying to get this technology into as many hands as possible,” Malone told New Scientist. “The kit is designed to be as simple as possible.” Once the parts have been bought, a normal soldering iron and a few screwdrivers are enough to put it together. “It’s probably the cheapest machine of this kind out there,” he adds.

It uses additive processes to create objects layer-by-layer.  This involves squeezing material from a mechanically-controlled syringe. It is also designed to be used with more than one material, which is not always the case with rapid prototyping machines, even the more expensive ones.  The article describes how the process has been made almost as simple as adding paper to a printer:

So far it has been tested with silicone, plaster, play-doh and even chocolate and icing. Different materials can also be used to make a single object – the control software prompts the user when to load new material into the machine.

The researchers have clearly aligned themselves with the open source approach with the Fab@Home project.  They are hopeful that it will grow into a community of enthusiasts who share designs for 3D objects and even modify the machines for themselves, aiding the emergence of widespread personal fabrication.

The New Scientist Article also looks at the research being carried out on low cost rapid prototyping machines at Bath University.  This research was described in an earlier post on this site.  Adrian Bowyer, head of the Bath University rapid prototyping programme (the RepRap project), is complementary to the Fab@Home project.  The Bath University programme also envisages machines being distributed freely, and one of their examples is even intended to replicate copies of itself.

Adrian Bowyer is quoted as saying “I can imagine people swapping plans of things to make online, or paying to download them instead of going to the shop.”  This is the Long Tail of Everything made real, which Chris Anderson discussed in the final chapter of his book ‘The Long Tail‘.  It was also discussed in the One Word For Many Trends article on this website in November 2006.

It is interesting that both the Fab@Home and RepRap teams have used the open source model in their projects.  The big question mark which remains is whether the idea of an accessible home fabricator can generate enough momentum to become a self-sustaining community.  Perhaps the best chance of success is to encourage those engaged in web and software development to try their hands at this more three-dimensional type of development.  By reaching out to software developer communities, these projects may find a willing audience who will bring the lessons learned from open source software development to this new area.  In fact, the Fab@Home website indicates that this approach is already being taken.

The next step for me is to study the Fab@Home website and see if I can figure out how to put one of these rapid prototyping machines together.  I’m not sure how well I will get on.  They say man is separated from the apes by his ability to use tools.  They never thought about the blogger with a soldering iron!

See also: Reference article on digital manufacturing on this site from 2004.

The Cisco CDS enables carriers to accelerate the creation and distribution of advanced entertainment, interactive media and advertising services to subscribers’ televisions, PCs, mobile handsets, portable media players and other media-capable devices.

The Cisco CDS is the latest addition to the Cisco IP NGN Service Exchange Framework, a suite of technologies designed to enhance IP service control and enable content personalization.

The Cisco CDS is composed of a network of appliances known as Content Delivery Engines (CDEs) which implement content storage, ingest, distribution, personalization and streaming capabilities. Groups of CDEs form a virtual platform for deployment of a variety of Content Delivery Applications (CDAs). In various combinations, CDAs enable service providers to deploy multiple high-value subscriber services such as targeted ad-insertion in broadcast video and video-on-demand (VoD); program time-shifting; local programming; “long tail” content; and public, educational and government channels.

The Cisco CDS offers a network-centric approach to digital video and IPTV delivery. The company claims that this differs significantly from the ‘monolithic, centralized, server-based products available to date’, and that ‘the existing solutions are proprietary, hardware-centric, application-specific devices that are difficult and expensive to scale, cumbersome to operate and maintain, and unable to support the growth of video content and the proliferation of end-user devices’.

Cisco say that, regardless of system size and the number and mix of CDEs deployed, the Cisco CDS (in centralized, decentralized or hybrid configurations) operates as a single logical system with virtually unlimited capacity for ingest, storage and streaming. By physically separating ingest, storage and streaming into separate CDEs, each function scales independently of the others.

The solution uses a hierarchical storage design that enables the development of large content libraries while simplifying content storage management. Programming is preserved in a common, shared storage array that is instantly accessible for streaming anywhere in the network, while intelligent caching automates delivery of the content to the network edge in response to viewer demand. As a result, the most popular content at any point in time is cached locally on CDEs at the edge of the network. The resulting decrease in bandwidth demand on the network backbone helps providers lower costs and improve scalability.

Through resource pooling and load balancing, the Cisco CDS dynamically allocates storage and streaming resources across available CDEs based on real-time subscriber demand. This allows any CDE within an array to instantly assume the identity and state of another, enabling automatic failover and maintaining a high-quality viewing experience when a server is unavailable due a maintenance upgrade or hardware failure.

According to Cisco, unlike traditional VoD systems, the CDS eliminates the need to pre-position content at every streaming node in the network. Delivery of any content, from ingest to play-out on the subscriber’s screen, occurs within 300 milliseconds, regardless of where the content is physically stored within the network. This imperceptibly low latency — much lower than any other available solution — also enables the first true convergence of live TV with on-demand content, delivering personalized streams to each subscriber in the network without disrupting the broadcast timeline.

The Cisco CDS solution has been chosen by Charter Communications and Time Warner Cable and is in trials with a number of leading wireline providers around the world.

“Global adoption of digital, high definition and on-demand video services is accelerating — giving consumers greater choice and control while transforming the entertainment experience,” said Paul Bosco, Cisco vice president of cable and video initiatives. “Exciting new changes are also emerging in advertising, subscriber content and interactive services. The CDS family extends the Cisco portfolio of video broadcast and digital media products to power this revolution. We now offer next generation video and interactive service delivery platforms, built within our IP-NGN architecture, and complementing our set-top and other product portfolios to enable the ‘Connected Life.’ Our goal is to deliver the products, solutions and support services which enable the success of our customers in this fast-paced period of change.”

It was said that the only people to make money out of the California Gold Rush were the sellers of pickaxes and shovels. Cisco became a massive company by selling the infrastructure to facilitate the internet gold rush in the 1990′s. It will be interesting to see if they can do the same thing again with infrastructure for video on demand.

It occurred to me that, while there has been extensive analysis of these various concepts, there has not been as much examination of how they have influenced and interacted with each other. To a certain degree, individual conceptual ideas overlap with each other, which may sometimes lead to a degree of confusion among those who are developing their understanding of mass customization and related business strategies. I hope that this article will shed some light on the origins of various concepts that have developed. It is probably fair to say that the terminology can come across as “management-speak” to many people, so it may be a good idea to come up with a more accessible description which can apply to them as a group.

An essential component in the evolution of these customer-centric business strategies from concept to reality has been the development of the web, firstly in the form of the world wide web itself, and more recently the ‘social internet’, sometimes referred to as “Web 2.0″. The role of information systems in the growth of the customer-centred business models will also be explained.

As is often the case when explaining something like this, a diagram helps. I have, to the best of my ability, mapped the evolution of mass customization and its ‘cousins’, such as user innovation and customer innovation. Towards the end, I’ll show a cumulative diagram which displays how all the different trends fit into the ‘big picture’.

From the first mention of the ‘prosumer’ in Alvin Toffler’s 1970 book ‘Future Shock’, right through to the current use of customer-driven innovation processes, there have been a great many significant events, which may at first appear unrelated to each other, but all of which have played a role in getting us to where we are today.

The ‘history’ of Mass Customization (it may seem strange to use the word history for something that is still developing) is likely to be familiar to readers of this website, but to quickly recap, the concept is generally traced back to Alvin Toffler’s 1970 book ‘Future Shock’ which referred to the producer and consumer working in concert. (It has recently come to light that an un-named lecturer at IBM’s System Research Institute outlined the mass customization idea as far back as 1963). Toffler used the term ‘prosumer’ to describe this type of interaction. The first use of the term mass customization occurred in Stan Davis’ 1987 book, ‘Future Perfect’, which was followed in 1993 by Joseph Pine’s landmark book ‘Mass Customization – The New Frontier in Business Competition’, which set out how this new strategy could be deployed in an enterprise.

Developments in supply chain management during the 1980′s and 1990′s, such as Just-in-Time delivery, made it feasible to dispense with large inventories of parts, and instead order frequent smaller deliveries to match demand. This made it more feasible to offer products built to order, as part order quantities could be based on actual customer orders.

The major impediment to widespread adoption of mass customization in the early 1990′s was the absence of an efficient communication channel for customers to describe their requirements. Telephone ordering existed, but it was not an efficient method for taking large numbers of orders for a customized product. However, two separate strands of information systems research were about to combine supply the right tool: the Product Configurator.

I’m open to correction on this, but my research suggests that the earliest work on what would be considered a product configurator was carried out by Ron Brachman at Harvard University in 1977. At that time, the term used was ‘knowledge representation’. In the mid-1980′s, Brachman worked at the Artificial Intelligence Principles Research Department at American Telephone and Telegraph (ATT) which developed the PROSE product configuration system for use in the telecoms industry. A few years later, unrelated research by Tim Berners-Lee would produce the first web-browser. By 1996, Dell had combined these two technological innovations into the first web-based product configuration system, that would allow anyone to specify their requirements when purchasing a computer. The idea of allowing customers to configure products on a website and then purchase the product was now no longer just a theoretical idea, but a reality.

Technological developments continued through the late 1990′s, with product configurators being developed by many different IT companies, but the general business concept of mass customization was largely unchanged during this period: companies would offer a basic product that could be configured in numerous ways by the customer at the time of purchase. The first two examples of how mass customization could be the catalyst for new business models came about at the turn of the Century. These can be summarised under the headings of Manufacturing Service Provider and Micro Manufacturing.

A manufacturing service provider is one who manufactures mass customized products, and also provides software to allow other brands to sell these customized products under their own name. The term ‘Manufacturing Service Provider’ is a variation on the well-known phrase ‘Application Service Provider’ which describes companies that provide business software as a service on the internet. The manufacturing service provider is simply offering custom manufacturing as a service to other companies through the internet. The best known exponent of this business model is Bivolino, a Belgium-based manufacturer of custom-made shirts. Customers can design and purchase made-to-measure shirts on Bivolino’s own website. However, Bivolino also provide other retailers with their expertise in custom shirt making, through an associated company, Shirtsdotnet. Retailers can set up their own website with their ‘branded’ version of the shirtsdotnet product configurator installed. They can also install a Shirtsdotnet kiosk in their stores, which their customers can use to configure a shirt while they are in the shop. Like on the retailers website, the retailer’s own branding appears on the kiosk version of the product configurator. The completed order is then manufactured and delivered by Shirtsdotnet/Bivolino, but under the brand name of the retailer.

The second of these business models, micro manufacturing, is exemplified by two companies: Zazzle and CafePress. Both of these companies offered conventional personalization of everyday products – you could upload your picture and they would print it on items like t-shirts and mouse mats. However, the most important aspect of their business was that they were also ‘micro-manufacturers’. Micro-manufacturing works like this: You have a website and you would like to earn money from it by selling merchandise. You have some interesting logo, photos or artwork that you want to put on t-shirts or other everyday items, but you have no factory, employees, suppliers or budget. No problem – sign up with a micro manufacturer. Upload your artwork to their website, then fill in a few details and copy some code to your own website. You are an instant retailer of your own collection. Manufacturing, distribution and payment are all dealt with entirely by the micro-manufacturer. All you have to do is run your site and wait for your share of the revenue to arrive from the micro-manufacturer. The idea has been a huge success, with Zazzle and Cafepress both having signed up hundreds of thousands of webmasters as members.

The growth of these companies was important in that it showed how the mass customization idea could be adapted to create completely new business models.

In conventional mass customization, the customer had, as yet, no role beyond specifying their requirements and making the purchase. However, it was obvious from the success of micro-manufacturing that there were a great many people who wanted to jump across from being customers to being developers of products themselves.

Ideas about involving the customer in the innovation process had been around since the late 1980′s. This area of research has a number of slightly different strands that have gradually come closer to each other over the years. User Innovation is the earliest of these concepts, devised by Eric Von Hippel at the Massachusetts Institute of Technology (MIT). Von Hippel discovered that most products and services are actually developed by users, who then give ideas to manufacturers. This is because products are developed to meet the widest possible need; when individual users face problems that the majority of consumers do not, they have no choice but to develop their own modifications to existing products, or entirely new products, to solve their issues. Often, user innovations will share their ideas with manufacturers in hopes of having them produce the product, a process called free revealing.

In 1986, Von Hippel introduced the Lead User method that can be used to systematically learn about user innovation in order to apply it in new product development. A Lead User is someone who faces needs that will be general in a marketplace – but faces them months or years before the bulk of that marketplace encounters them. Lead users are also positioned to benefit significantly by obtaining a solution to those needs. So user innovation can be combined with mass customization so that the customer is directly involved in the lifecycle of the product, from the design stage through to the configuration and purchasing stage.

Later, the idea of Open Innovation was devised by Henry Chesbrough, a professor and executive director at the Center for Open Innovation at Berkeley. The central idea behind open innovation is that in a world of widely distributed knowledge, companies cannot afford to rely entirely on their own research, but should instead buy or license ideas (i.e. patents) from other companies. In addition, internal ideas not being used in a firm’s business should be taken outside the company (e.g., through licensing, joint ventures, spin offs). While Open Innovation encourages greater openness in a company’s research and development, it doesn’t specifically encourage interaction with end-customers. Therefore it is quite different in this respect to User Innovation.

Another approach to this area is referred to as ‘co-creation’. This originated in the 1994 book ‘Designing Interactive Strategy – From Value Chain to Value Constellation’ by Richard Normann and Rafael Ramírez. They they proposed a model of ‘co-production’ between ‘actors’ in the business environment, coming together in a ‘value constellation’. The co-creation idea was later expanded upon by management writer C K Prahalad, who argues value is increasingly being co-created by the firm and the customer, rather than being created entirely inside the firm. Co-creation is at the heart of the open source software movement, where users have full access to the source code and are empowered to make their own changes and improvements to it. Open source software is the inspiration for other new business models, which I will come back to later.

Most recently, Patricia Seybold has updated the User Innovation idea in her book ‘Outside Innovation‘. This recent book brings right up-to-date the idea of customer involvement in the innovation process, and some of the concepts described in this article are explored in detail in ‘Outside Innovation’. Therefore, I would strongly recommend Outside Innovation as reading for anyone interested in exploring these ideas further.

Just as the first generation world wide web had allowed businesses to sell customized products to consumers, Web 2.0, or the social internet, enables new methods of interaction between business and customers. (The correct usage of the term Web 2.0 is sometimes subject to a certain amount of debate and argument about particular technologies. Therefore for this article I will stick with the more generic term of ‘social internet’).

The social internet is the name given to web-based activities that involve two-way conversations, where the consumer of information (the website reader) can also become a contributor of information to that same site. Examples of the social internet include blogging, where the reader can leave comments on an article, and wikis, where the reader can join a community and contribute to authoritative content on a particular topic. In the world of mass customization, the social internet has been adopted by some businesses to integrate their customers into proposing designs for products. In the business-to-consumer sector, companies like Threadless and Innertee have adopted this strategy, referred to as ‘Crowdsourcing’.

Crowdsourcing involves the use of discussion and debate among participants to arrive at a solution which satisfies the requirement. In some cases, such as Threadless, there is a formal ‘voting’ process. Designs submitted by members are voted upon and the most popular are then marketed by the business. In a crowdsourcing model, the designers whose ideas have been selected sometimes receive a commission on each example of their design that is subsequently sold.

An alternative approach in crowdsourcing for deciding the correct solution is a process of discussion and review. This is generally moderated by people within the enterprise who eventually decide what solution will be used based on a consensus among the contributors.

While crowdsourcing, to date, has been used mostly in the area of visual design, it could easily be adapted to issues of technical design also. Who is to say that an electronic equipment company could not use crowdsourcing to develop new products? There could be thousands of engineers itching to submit designs for new devices or contribute to the design of a new product. Indeed, Patricia Seybold’s Outside Innovation describes just such a case, that of National Semiconductor, which empowers design engineers to reach their desired outcomes with a comprehensive software toolkit.

Crowdsourcing can generally be described as commercial organisations encouraging customers or users to contribute knowledge or ideas, that it can then use to its own benefit, and the contributors may or may not share financially in the benefits. However, the possibility of using crowdsourcing for technical development inevitably hits a stumbling block due to the traditional concerns regarding the protection of intellectual property rights. Very few CEO’s would be willing to have their intellectual property and product designs discussed openly. However, the same viewpoint has been significantly challenged in the publishing sector, with the growth of the Open Source software movement. If open source can be accepted in relation to copyright, it might also be more accepted in other forms of intellectual property.

The general view among publishers of all kinds (including software) for many years was that it was essential to maintain copyright over the work to protect the financial benefits for the author and publisher. However, the growth of open source software changed attitudes to copyright, and it was only a matter of time before similar open distribution models would appear in other areas of activity. The first very significant development in this regard was Creative Commons licensing. This concept was devised by Lawrence Lessig in 2001, and it enables copyright holders to grant some of their rights to the public while retaining others through a variety of licensing and contract schemes, including dedication to the public domain or open content licensing terms. Creative Commons was adopted by many websites as a means of allowing the content to be distributed while giving a degree of recognition to the original publisher.

If you combine creative commons with user innovation, the result closely resembles another concept, Peer Production. Commons-based peer production is a term coined by Yale’s Law professor Yochai Benkler to describe a new model of economic production in which the creative energy of large numbers of people is coordinated (usually with the aid of the internet) into large, meaningful projects, mostly without traditional hierarchical organization or financial compensation. He compares this to firm production (where a centralized decision process decides what has to be done and by whom) and market-based production (when tagging different prices to different jobs serves as an attractor to anyone interested in doing the job). Peer production to date has been limited mostly to information technology projects, a good example of which is the open source Mozilla Firefox web browser.

The Outside Innovation book describes how this project is run on a non-profit basis, but has generated significant financial surpluses due to sponsorship arrangements with other technology companies. The Mozilla organisation is reported in Outside Innovation as looking at ways of distributing part of its surplus back to those who took part in its development. This gives rise to an interesting question – just as today’s public companies are listed on the stock market, distributing surpluses to shareholders in the form of dividends, might there in the future be a ‘stakemarket’ where peer production projects are listed and distribute surpluses to stakeholders who have contributed to them intellectually? Exploring this question is probably one for another day.

Getting back to our discussion, if you combine crowdsourcing with a type of creative commons intellectual property arrangement, you could have a business model where products are developed by users under creative commons licensing, which would in turn allow other businesses to use the intellectual property subject to conditions (financial or otherwise). This presents the potential to massively advance countless areas of technology, by opening them up to faster development by sheer weight of numbers.

Another part of our jigsaw is digital manufacturing (or digital fabrication – ‘fabbing’). This originated with CNC milling machines and the like in the 1980’s, but took a step forward technologically with the development of additive fabrication during the 1990’s. Without going into too much technical detail, additive fabrication is three-dimensional printing. Design data is read from a file, and a three-dimensional object is created by depositing materials in successive layers to create the shape contained in the design.

A company called eMachineShop combined digital manufacturing with the world wide web to create an ‘online factory’ which can make almost anything from a designs submitted by customers. Customers download eMachineShop’s own design software, an easy-to-learn CAD application. They then use this software on their own computers to compose their design, before uploading it to the eMachineShop website and place the order for it to be manufactured by the company.

eMachineShop’s design software is a type of ‘user toolkit’- the name given to software that assists users to design new products for manufacture by the company concerned. Although eMachineShop customers mostly design and purchase items for themselves, user toolkits are most often associated with open innovation, where they are used to contribute design knowledge to a project. User toolkits are to open innovation what product configurators are to mass customization. Of course, a user toolkit may exist as a web application or a software download.

It is also possible to combine one or more of these business concepts with digital manufacturing. There is already one example of Creative Commons and digital manufacturing being combined for the purpose of allowing customers to ‘download designs’ for products. Ronen Kadushin, a lecturer in furniture design at the Shenkar School of Engineering and Design in Israel, has published a collection of lighting and accessories, where the product designs available for download under the principles of ‘Open Design’.

In explaining many of these concepts, it is difficult to state definitively if a particular project belongs to one or the other concept, as it may display attributes taken from many or all of them. So, while all of these ideas and concepts for new ways of doing business were devised separately, they do overlap to a signficant extent. Patricia Seybold has devised a ‘continuum of customization’, showing many of these ideas on a scale of customer involvement, beginning with the most basic level of product customization and moving towards ever increasing involvement of customers as stakeholders in the business, through their contribution to product design and development.

Looking to the future, in the event that hardware manufacturers were to produce an affordable digital manufacturing system for home use, the popularity of downloading designs would grow exponentially. Chris Anderson discussed this idea in the final chapter of his recent book ‘The Long Tail‘ .

Combining user-friendly digital manufacturing with mass customization and the other concepts described above would enable a host of new business models to gain popularity, from the Creative Commons distribution example used by Ronen Kadushin, to ‘shareware’ style examples (get a basic product design for free, pay a fee for a more advanced version), through to standard commercial agreements. And, of course, any of these business models for digital products could be combined with all of the other ideas discussed above, for example:

• User innovation – users contribute to the design of a digital product design which is then made available for download by other customers;
• Crowdsourcing – users upload designs of their own for peer review and possible resale by a digital manufacturing business;
• Custom marketplaces – webmasters upload three dimensional product designs to a custom digital manufacturing marketplace (a sort of combination of eMachineShop with Zazzle or Cafepress).

One other technology development that may yet be a significant factor in the development of customerism is digital identity management. Inputting personal details, and especially personal measurements or other preferences, is a chore for most people. What if you could store all of your personal details in a manner where they could be retrieved instantly, to be used whenever you are purchasing a customized product, contributing to an open innovation process, or just about anything else? An open source project currently underway, called the Higgins Project, may be the path towards having a single overall digital identity for every web user. This project is still at the development stage, but could be a major leap forward in the way that personal data is accessed on the web. While its impact cannot be predicted with certainty, if successful it could make filling out detailed order forms on the web look quaint in years to come.

This is the overall diagram (set your browser to full-screen view for best results) which shows how the various events and trends described above have interacted with each other. In the diagram , the event flows sometimes originate at a great distance from each other, not so much in the geographic sense, but rather in their field of research or activity. However, each new development feeds off everything that has gone before, and differences between the concepts tend to be eroded as ideas become adapted to real-world applications.

This is where we are now then: a collection of separate business concepts and enabling technologies, that encourage user/customer participation, whose attributes overlap with one another to a significant extent. I have given some thought as to whether they can be labelled collectively as a group. While there is no single word that can take in all of them (‘masspeercustomizationcommonsmarketplace’ doesn’t roll off the tongue!), my personal opinion is that there is one word to describe a series of ideas that empower the customer with a greater level of participation in deciding how products are designed and how they are produced. It has been used before in a couple of places, more so to describe the general growth of consumer power, rather than in the context I am describing here. However, “..isms” generally refer to a collection of ideas, so it seems appropriate to use it for this purpose.

It’s called ‘Customerism’.

Note: Some information for this article, particularly the definitions of some concepts, was sourced on Wikipedia. Logos of companies are shown in diagrams to illustrate an event or trend only.

It might be appropriate to namecheck those people who have used the term ‘customerism’ in other contexts previously. Firstly, Dan Gillmor wrote an article in SiliconValley.com some years ago which used the term (unfortunately this article seems to be no longer available online), and more recently, Jeff Jarvis titled a posting “The Age of Customerism and Producerism”. This article discussed at length the merits of the blogging approach to communication with customers.