User-Centered Innovation: New Business Model???

Trochim and Donnelly  authors of The Research Method Knowledge Base defines deductive and inductive reasoning as “reasoning that woks from the more general to the more specific (deductive), and “reasoning that works the other way, moving from specific observations to broader generalizations and theories.

When applied to the process of information systems development, inductive reasoning is utilized during a process of systems development called user-centered development.  User-centered development is a development process based on focusing on the needs of the users as opposed to the “thing” being developed.  Ongoing belief by researchers is that if the user-requirements or needs are identified and met, then the product or service is applicable to broader spectrum of user. User-centered development can be used during software development, information system development, or even product development.

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Threadless, a Web 2.0 company that was built upon the concept of user-centered design. This concept goes against the traditional business model where companies make the product and customers buy it. The basis of user-centered innovation is active participation of the user in the development of products and services. This active role of the user is one in which the user of products are able to develop what they need for themselves.  The platform for innovation is provided by a host, who then manufactures and distributes the product.

In the case of Threadless the users are the community of designers who submit their ideas for t-shrts and then vote on the one they like best.  Threadless owners Jake Nikell and Eric Von Hipple provide the platform (Threadless) for the development of the user’s ideas. (For more Threadless info read Inc. Magazine’s article on the company).

Another such company RYZ is a community driven high-end sneaker company based in Portland, Oregon. RYZ’s business model relies solely on the Internet for design, marketing, and sales of all or their sneakers.
RYZ lets you download the sneaker template and design everything from the inside and outside panels to the tongue, footbed, heel and outer sole. The designs are then posted online where designers may use social networks like MySpace and Facebook Viewers must then vote for their favorites design. The design with the highest amount of votes are produced by RYZ, and the designer will get $1,000 plus 1 percent royalties.

Companies such as Threadless and RYZ are honing in on user-centered innovation, by capitalizing on web 2.0 collaborative applications and making tons of money while doing so.  Is user-center design a new business model?   It will be interesting to watch this concept develop in the new future.

Check out this RYZ Video

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