Innovation Perspectives – Co-Creation vs. Open-Product Development

by Debbie Goldgaber

This is the seventh of several ‘Innovation Perspectives‘ articles we will publish this week from multiple authors to get different perspectives on ‘How should firms collaborate with customers and/or value chain partners to co-create new products and services?’. Here is the next perspective in the series:

by Debbie Goldgaber

Innovation Perspectives - Co-Creation vs. Open-Product DevelopmentDefining Co-Creation

As a general rule, when you embark on a project it’s important to take a moment to define your terms.

This is particularly important with the term co-creation, because it’s easy to conflate it with the more general concept of open innovation or open product development. Co-creation sounds like you might be asking your client and value-chain partners to help you create new products and services, by intervening in several or all steps of the traditional product development cycle.

In fact, experts tend to see product co-creation a little bit differently, insofar as the focus is not on a new product, the improved widget, software, or cereal, that you create with your customers’ input or know-how, but rather on creating something “softer.” Co-creation focuses on experience.

If co-creation is a “softer” science than open product design, it’s because it taps into the possibilities of personalized experiences and interactions that consumers have with products. With co-creation part or all of the products’ value comes from the fact that it’s co-created. As such, co-created products or services no longer imply durability or uniformity and the roles of “consumer” and “producer” are necessarily blurred.

While conflation of open innovation and co-creation can lead to missing the co-creative point, it’s inflexible to insist on a firm line between open-product development and co-creation. In fact, you might say that open innovation, when it’s used to describe opening up the product development process to users/customers, is co-creation 1.0.

Co-Creation: Some Examples

Lego Mindstorms famously lets customers co-design the next generation of LEGO toys. I won’t write anymore on LEGO’s admirably engaging site, but invite you to see for yourself. Or read more about it here.

Along with product co-development, co-creation also seems to imply some level of product personalization. Nike, for example, was among the first consumer goods companies to allow users to “design” their own shoes–offering personalization interfaces online and in-stores. Now, with small-batch production, as a recent Wired.com article emphasizes, customer-designable is about to take a quantum-leap forward.

But co-creation is not just about massively-scalable, bespoke T-shirts, chocolate or running shoes. It is when any part or dimension of the value of the product is produced by the user, especially the “soft” values of experiential, social, ethical or cognitive value.

Local Motors is often used as an example of open innovation, or at least open-(crowd-sourced) product design, but they also trade in customer co-creation. Here’s one co-creative dimension:

Creating “Local” Value: For many people Sustainable=Local. Local Motors parts are not made locally (there’s the BMW-made engine, for instance), but the cars are made with particular locales in mind (e.g. San Francisco, Southwest USA, Texas) and the cars are assembled locally, with the aspiration of maintaining as much modularity as possible. This allows innovative/sustainable parts to be subbed-in as soon as possible. But its when the customer goes in to build his/her car that the co-creation comes in. Building your car with your neighbor is what builds-in the local dimension: building the car feels like building a better world. And that’s the Local Motor Value.

Lest you think that there’s no obvious way that you can get in the co-creative spirit, let me offer another, perhaps-surprising route in that you might engage customers or value-chain partners: Data.

Co-Creating with Data?

Surely some of you have been prodded to think (or are prodding others to think) about how your enterprise can be more data-driven. How about thinking data-driven and co-creative together?

Open Data: Governments, federal, state and local have recently shown the way to co-create using nothing but published, structured data that agencies collected anyway. Publishing it allowed users to co-develop useful products and services and co-create, through the data’s use, more transparent, civic structures.

Atop of this published data, users have built a rich array and apps and “mashups.” Indeed, the whole philosophy behind the open government data movement is that the feds cannot and should not decide the best uses for data. Get it into the hands of the people, with their own interests, goals and values and let them decide how they want to use it.

The take-away? Lots of data that your enterprise is sitting on is not confidential/mission critical and potentially valuable to customers and value-chain partners. Should you publish data or adopt an open data strategy? Which data? Why not ask your customers and partners?

OkCupid is a fascinating example of a data-driven service that’s inspired data (and service) co-creation. It lets users, for example, design their own online matching tests, offer them to the network, and then shares the resulting data insights.

How can data-exchange between users and firms become more co-creative?

Surely, in the age of Facebook and Google, this is one of the most pressing and intriguing challenges we currently face.

But, don’t forget that knowledge is the original co-creative act.

Focusing on co-creation is, most of all, an opportunity for you to see your products and services differently. You shouldn’t miss it.

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You can check out all of the ‘Innovation Perspectives‘ articles from the different contributing authors on ‘How should firms collaborate with customers and/or value chain partners to co-create new products and services?’ by clicking the link in this sentence.


Debbie GoldgaberDebbie Goldgaber is Deputy VP of Concepts + Communciations @ hypios which provides enterprises with open innovation ecosystems. She is also a PhD candidate @ Northwestern University.

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