Section 21.1. Sports Equipment Innovation by Users and Their Communities


21.1. Sports Equipment Innovation by Users and Their Communities

Both users and manufacturers contributed to the development of equipment innovations in the windsurfing, skateboarding, and snowboarding industries. Users are defined as individuals or firms that expect to directly benefit from a product or service by using it (von Hippel 1988). In contrast, manufacturers are those who expect to benefit from manufacturing and selling a product, service, or related knowledge; thus, firms, entrepreneurs, and inventors seeking to sell ideas, products, or services are all examples of manufacturers. To illustrate, snowboarders are users of snowboards. Firms such as Burton and Gnu are manufacturers of snowboards. An inventor who hears that there is a market for improved snowboard bindings and develops a new type of binding with the intent of patenting and licensing it is categorized as a manufacturer.

21.1.1. The User Innovation Process in Three Sports

This section describes the process by which users and their communities develop innovations. I begin with an example that illustrates this process. The following passage describes how Larry Stanley and the community of windsurfing enthusiasts around him innovated in the sport of windsurfing.

Mike Horgan and Larry Stanley began jumping and attempting aerial tricks and turns with their windsurfing boards in 1974. The problem was that they flew off in midair because there was no way to keep the board with them. As a result, they hurt their feet and legs, damaged the board, and soon lost interest. In 1978, Jurgen Honscheid, of West Germany, came to participate in the first Hawaiian World Cup and was introduced to jumping. A renewed enthusiasm for jumping arose and soon a group of windsurfers were all trying to outdo each other. Then Larry Stanley remembered the Chipa small experimental board that he had equipped with footstraps a year earlier for the purpose of controlling the board at high speedsand thought:[1]

[1] Quotes from Larry Stanley in this chapter come from an interview of Stanley conducted by the author.

It's dumb not to use this for jumping.

I could go so much faster than I ever thought and when you hit a wave it was like a motorcycle rider hitting a rampyou just flew into the air. We had been doing that, but had been falling off in midair because you couldn't keep the board under you. All of a sudden, not only could you fly into the air, but you could land the thing. And not only that, you could [also] change direction in the air!

The whole sport of high-performance windsurfing really started from that. As soon as I did it, there were about 10 of us who sailed all the time together and within one or two days there were various boards out there that had footstraps of various kinds on them and we were all going fast and jumping waves and stuff. It just kind of snowballed from there.

News of the innovation spread quickly and instructions for how to make and attach footstraps to a windsurf board were shared freely. Later, Larry Stanley, Mike Horgan, and a small set of windsurfing friends would begin the commercial production and sale of footstraps (and other innovations). Today the footstrap is considered a standard feature on windsurf boards.

This example illustrates three key components of innovation development by users. First, the act of use itself creates new needs and desires among users that lead to the creation of new equipment and techniques. Second, user cooperation in communities is critical to prototyping, improving, and diffusing solutions to those needs. Working jointly allows rapid development and simultaneous experimentation, however working jointly also requires that users openly reveal their ideas and prototypes to others. Third, user innovationseven after they have been freely revealedare sometimes commercialized. Each of these three key components is discussed in detail in the following subsections..

21.1.1.1. Discovery through use

Users generate and accumulate information based on product use in extreme or novel contexts, the creation of new (unintended) uses for the product or service, and accidental discoveryin addition to intended product use. In contrast, marketing teams at firms generally focus on understanding and improving the intended use(s) of a product. For example, until the handles of childrens' scooters accidentally fell off and children experimented with the resulting toy, it is unlikely that manufacturers would have identified skateboarding as a fun activity. These differences in usage and search patterns create an information asymmetry between users and manufacturers. Because users and manufacturers hold different stocks of information, they will tend to develop different types of innovations.

Two complementary sets of information are required for product development activity. The first is information regarding need and the use context. As discussed in the previous paragraph, this information tends to be generated by users.[2] The second is solution information. This information may be held by both manufacturers who specialize in a particular solution type and individuals with expertise in specific areas. It can be a challenge to bring these sets of information together. Both need and solution information can be difficult to communicate between individuals and can be difficult to transfer from the site where it is generated to other sitesin other words, information is both tacit and sticky (Polanyi 1958; von Hippel 1994; Nonaka and Takeuchi 1995). These difficulties in transferring information, combined with the potential idiosyncratic nature of the request and communication costs, can make it difficult for manufacturers and users to work together.

[2] Technique is as important as equipment when it comes to actual use activity. I will focus on innovations in equipment in this chapter, but innovations in technique are equally important e.g., a surgeon with a new tool must devise a new surgical technique before using the tool. The example at the beginning of this section that describes the development of footstraps provides a particularly vivid illustration of the interplay between equipment and technique innovations.

If information cannot be transferred, users and manufacturers will continue to hold different sets of innovation-related information. Not surprisingly, innovators will develop innovations based upon the information they possess. As a result, users and manufacturers will tend to develop different types of innovations. Functionally novel innovations will tend to be developed by users. These types of innovations allow users to do qualitatively different things that could not be done previously, that is, they create a new functional capabilitye.g., adding footstraps to a windsurfing board so that "jumping" is possible. The development of such innovations requires a great deal of information regarding user needs and use contextinformation that is held by the user; it makes little sense for manufacturers to "guess" what novel functions users might want. Dimension-of-merit innovations may be developed by manufacturers or users. Dimension-of-merit innovations improve known product performance parameterse.g., making a snowboard less expensive, faster, or lighter. Manufacturers, with their dedicated engineering and design staffs, can draw from their specialized expertise to improve dimensions of merit known to be of value to customers to maximize sales and market share. Users can also draw from what they know to make dimension-of-merit innovations.

Individual users hold limited stocks of information from which to draw when innovating.[3] Even a user who knows exactly what functionality she desires may be unable to independently create a solution that achieves that functionality, let alone create an efficient or elegant solution. Users frequently overcome this barrier by working together.

[3] Extending the information asymmetry argument one step further, we see that individual users and manufacturers will create and hold different stocks of information. As a result, different users (or manufacturers) will develop different solutions and some users (or manufacturers) will be able to more cheaply develop a solution or develop a better solution than others.

21.1.1.2. Communities: cooperation among users

Working together provides users with significant benefits. Working with others allows users to access resources to develop their innovations. Working with others also allows more rapid development due to simultaneous experimentation. To illustrate, consider the following description given by windsurfing innovator Larry Stanley:

...we were all helping each other and giving each other ideas, and we'd brainstorm and go out and do this and the next day the [other] guy would do it a little better, you know, that's how all these things came about...I would say a lot of it stemmed from Mike Horgan because, if something didn't work, he would just rush home and change it or he'd whip the saw out and cut it right there at the beach.

Cooperation among users can take many forms. Informal one-to-one cooperation between users is frequent. Semistructured one-to-many interactions have also been documented (e.g., through publications in newsletters, magazines, and web sites). More structured cooperation within "innovation communities" is also widespread. Innovation communities provide social structures and, occasionally, tools that facilitate communication and interaction among users and the creation and diffusion of innovations. Open source software development communities are a good example of this.

Innovation communities are composed of loosely affiliated users with common interests. They are characterized by voluntary participation, the relatively free flow of information, and far less hierarchical control and coordination than seen in firms. These characteristics allow for rich feedback and the potential to match problems with individuals who possess the ideas and means to solve them. Due to the varied needs and skills of the individuals involved, user communities are often well equipped to identify and solve a wide range of design problems.

Innovation communities may be organized specifically around the development of a particular product or may be organized around a particular activity, with innovation being only one of the community's stated or emergent functions. The term communityrather than network, for exampleis used, because these groups often call themselves communities and possess distinct social structures. User innovation communities develop norms and rules, methods for attracting new members, and methods for maintaining their structure and integrity.

Two unique facets of innovation communities are their dedication to open product design and open communication. Open product design means that users are able to modify"tinker with"the product or service. Product design can be closed technologically (e.g., by distributing software code only in binary format) or via institutional and contractual mechanisms (e.g., warranties, intellectual property protection, government law and regulation, licensing, or usage agreements). For example, proprietary software by its very nature prevents user innovation: the code is closed both institutionally, through copyright protection, and technologically, through distribution in the form of binary code. In contrast, open source software not only allows but also encourages user innovation. This has two consequences: (a) user innovation will only flourish in open source, and (b) users inclined to innovate will gravitate toward open source. More generally speaking, open design is a prerequisite for facilitating user innovation and the formation of innovation communities.

In addition to open design, communities working with complex products or sets of information may choose to adopt modular project architectures. Modular design involves building complex products from smaller subsystems that can be designed independently yet function together as a whole. When a product or process is "modularized," the elements of its design are split up and assigned to modules according to a formal architecture or plan. Modularization makes complexity manageable; enables multiple individuals to work simultaneously and later integrate their work products; and makes it possible to accommodate unforeseen changes to the system, so long as the design rules are obeyed ( Baldwin and Clark 2000).

Innovation communities embrace open communication. By making information and innovations accessible to as many interested users as possible in a timely manner, innovation communities increase the diversity of expertise that can be brought to bear on a problem and allow the results of trial-and-error experimentation by multiple parties to be exchanged. Both factors are likely to increase the likelihood that an effective solution will be created and will reduce the time required to create such a solution.

User communities utilize a number of communication channels. Today the Internet is one of the most commonand is being used for much more than open source software development. For example, kite-surfing enthusiasts have created an online community where they share innovation-related information on board and sail design. Mailing lists and web sites are well-suited communication platforms for communities. They allow many users to be reached very quickly and allow users to both share and record information; they are relatively inexpensive, widely accessible, and easily scalable. However, free and open diffusion of ideas and innovations occurred even before the advent of the Internet. Users have historically shared and continue to share ideas through word of mouth; at club meetings, conferences, and competitions; and in newsletters and magazines. For example, Newman Darby, who is credited with the invention of the windsurfer, published blueprints and instructions for making a windsurfer in Popular Science magazine.

The open revelation of information and innovations is a necessary input into cooperative work. Communities provide several innovation-related benefits that might lead an innovator to develop an innovation within or share a completed innovation with the community. First, community members work with innovators and provide innovation-related ideas and assistance ( Franke and Shah 2003; Harhoff, Henkel et al. 2003). To get assistance, one must reveal the problem and possible solutions. Given that user-innovators are also enthusiasts who enjoy practicing their activity, much of the "reward" for innovation is in future improvements and continued use. It thus makes sense to reveal the innovation (unless the innovator believes the design is ideal), since revealing opens the door to getting feedback and improvement ideas from others. Interviews with innovators indicate that a desire to advance the technology motivates collaborative work[4]:

[4] From interview with the author; interviewee unnamed for reasons of confidentiality.

We knew that we were just scratching the surface... The more we worked together, the sooner we'd go faster or do new things.

Second, innovators may share simply because they enjoy the innovation development process and working with others. This pattern emerged in this study, and in research examining the activities and motives of software, radio, and automobile enthusiasts (Weizenbaum 1976; Gelernter 1998; Torvalds 1998; Haring 2002):

If you did not share... [others] would not be able to keep up with you. To do or experience something new and fantastic or go another step faster isn't much fun when you shout "Wow! Did you see that!" and nobody is there to hear you.

Third, user-innovators willing to share their work with others generally want to prevent third parties from appropriating that work. Third-party appropriation would prevent users from further modifying, improving, and producing the innovation. Communities take a variety of precautions to protect their work and make sure that it will remain available for others to use and modify. For example, public exhibition and documentation act to prevent appropriation by the manufacturer and encourage development by others. Protecting the innovation via available intellectual property protection mechanisms and then allowing others to use and modify it freely can have a similar effect. The sports enthusiasts described here engage in such practices, as do communities of open source software developers (O'Mahony 2003).

Finally, a generally unintended consequence of sharing the innovation in the community is the potential development of a market for the innovative product or product featureand the opportunity to build a business to satisfy and further grow this market. Sharing the innovation with others can result in both improvement and widespread adoption of the innovation. While some adopters will be willing to construct the innovation for themselves, others will prefer to purchase the innovation, thereby paving the way for firm entry. The process by which user innovations were commercialized in the windsurfing, skateboarding, and snowboarding industries is described in the next section.

21.1.1.3. Commercialization

Conventional wisdom argues that the open revelation of innovations and the commercialization of those same innovations for profit are antithetical. Yet a number of innovating users both freely revealed their innovations and started firms that produced those innovations for sale to others. The actions of snowboarding innovator Dimitrije Milovich show how a user-innovator can both profit from an innovation and contribute to community development and market growth. Milovich, granted a patent for his snowboard design in 1971, made it known that he would not enforce his patent against users and other firms in the industry. His actions encouraged experimentation by users and the founding of new firms; both of which are likely to have contributed to market development and growth. He also started his own snowboard manufacturing firm, called Winterstick. Many other user-innovators in these sports did not patent their innovationspurposefully or because they did not recognize the potential commercial value of the innovationsbut later started companies that produced the innovations for sale to others.[5]

[5] A small handful of user-innovators responsible for key innovations patented their innovations. Their experiences suggest that the enforcement of intellectual property rightsi.e., the decisions of courts in upholding patents which have been grantedis worthy of further examination. In the few cases where the windsurfing, skateboarding, and snowboarding innovations studied were patented and then challenged in court by firms wishing to profit from the manufacture of the innovation without paying licensing fees to the innovator, courts tended to overturn the patents. It was argued that these patents did not meet the "nonobviousness" criteria required to be granted a patent: if a layperson could develop the innovation, how could it be nonobvious? In contrast, firms tended not to challenge patents granted to users who were also professionally trained engineers. The legal system is reliant on the knowledge held by society and is influenced by society's assumptions, norms, and biases. It is possible that user-innovators will not be afforded the same rights as inventors, formally trained scientists and engineers, and firms until the importance of innovation by users is more widely recognized.

Not only can free revealing and commercial activity coexist, but "free revealing" can actually set the stage for profitable commercial production. As the innovation diffuses through the community, the reactions of community members to the innovation can be observed. Information regarding improvement ideas, usefulness, and new uses is openly communicated and discussed, making the community a rich source of information for innovating users, users, entrepreneurs, and existing firms seeking to make investment decisions. This is especially true in the context of new or emerging product categories where price and quantity information is not available and where it is difficult or impossible to engage in market research; recall that at this stage, many users are building their own products, distribution chains do not exist, and overall awareness of the product has not penetrated to the mainstream.

As user-innovators observed interest in their innovations, many chose to commercialize the product. This process is straightforward in some cases, and highly emergent in others. Some user-innovators did not think to produce their innovation for sale to others until after receiving a series of requests from enthusiastswho had heard of the equipment from other enthusiasts or in newsletters and magazinesinterested in purchasing a copy of the innovation. Handmade copies of the equipment were initially constructed for free or at cost. Eventually, some user-innovators realized that they could sell the equipment at a profit and began to manufacture and market the product.

Firms founded by users in these industries functioned as lifestyle firms for many years. By lifestyle firm, I mean a firm with 10 or fewer employees that generates modest revenues for innovating users while continuing to innovate and advance their skills in a sport. These firms were initially operated out of garages or spare rooms. In their early years, these firms generally had no capital equipment beyond portable power tools and produced products one by one or in small lots. User-innovators who founded firms typically worked full time at other jobs and often had low opportunity costs for their time.

The activities of users who founded firms highlights the multiplicity of motives at play, and cautions us to not think of entrepreneurial motivation in purely material terms. First, the innovative activity observed does not appear to be driven by pecuniary motives as is commonly thought; rather, it was driven by motives such as use, enjoyment, challenge, and a desire to build the sport. Second, for many user-innovators, the benefits of starting a firm were not merely financial. Starting a firm also allowed them to spend more time practicing and building the sport they enjoyed, and as the business became more profitable, they could afford to give up other forms of employment and focus fully on the sport.

Over time, many of these firms became leaders in their fields and many were regarded as makers of exceptionally high-quality equipment. Several continue to operate independently, while the brands established by others have been acquired by larger manufacturers. Many of today's well-known brands in the windsurfing, skateboarding, and snowboarding industriesincluding Windsurfing Hawaii, Gnu, Winterstick, and Dogtown Skateswere created by innovative enthusiasts who later became entrepreneurs.

21.1.2. How Important Is Community-Based Innovation in These Sports?

In 2000, I conducted a longitudinal study of the development and commercialization histories of 57 key equipment innovations in the windsurfing, skateboarding, and snowboarding industries (Shah 2000).[6] The aim of the study was to understand the extent to which users did or did not contribute to innovative and commercial activity in these sports. The study found that users and their communities were critical to the emergence and development of these sports.

[6] The innovations were identified with the assistance of multiple experts in each industry. Detailed information on each innovation was gathered through one-on-one interviews with a variety of actorsinnovators, designers, early manufacturers, current manufacturers, magazine editors, book authors, friends and acquaintances of the innovator who were involved in the innovation process, and occasionally professional competitors in the sport. Whenever possible, the innovator was interviewed to get a better understanding for the local information employed and the specific circumstances, needs, and problem-solving methods surrounding the innovative activity. Innovator is defined as the individual or set of individuals who first develops a working prototype of an equipment innovation.

Sports equipment users developed the first-of-type innovation in each of the three sports studied, that is, users developed the first skateboard, the first snowboard, and the first windsurfer. Users also developed 57% of all major improvement innovations in the sample, and manufacturers developed 27% of the major improvement innovations. The remaining 16% were developed by other functional sources of innovation, such as joint user-manufacturer teams or professional athletes.[7]

[7] In the study, users and professional athletes are treated as distinct. Users benefit directly through product use. In contrast, professional athletes derive financial and career-related benefits from activities such as winning or placing well at competitions and being awarded advertising contracts.

21.1.2.1. Product origins: first-of-type innovations

In each of the three sports studied, users developed the initial first-of-type innovation. In each instance, the innovator(s) engaged in the process of bricolage, using the skills and materials at hand to create the innovation.

For example, skateboarding began in the early 1900s. At that time, children played and rode on wooden scooters, often homemade, consisting of a board with roller skate wheels and a handle attached for control. Over the next five decades, adventurous users removed or did without the handle (it often broke off), thereby creating the first skateboards.

In the case of snowboards, people have been trying to stand up on their sleds for ages. Experts agree, however, that the "formal" history of the snowboard began with Sherman Poppen's Snurfer (Howe 1998; Stevens 1998). In 1965, Poppen noticed his daughter and a friend standing up on their sleds as they slid down a hill. He went to his workshop and used the materials available to create the first prototypetwo skis bound together with a string attached at the nose for stabilityof what would later become known as the Snurfer (a name created by combining the words snow and surfer).[8]

[8] Whether Poppen was a user is not clear, however his activities were first inspired and appreciated by a group of users important to himhis daughter and her friend!

In the case of windsurfing, an individual user, Newman Darby, was the initial innovator. In 1964, Darby, a Pennsylvania sailboat enthusiast and amateur boat builder, created the first windsurfer by fixing a universal joint to the base of a mast on a floating platform. The universal jointa fundamental feature of the windsurferallowed the board and mast to move relative to one another. This in turn meant that the sailor could directly manage the direction of sail by standing up and holding the boom and tipping the mast. Darby recollects his experience:

I first designed the universal joint back in 1948 to use, but I was afraid it would be too dangerous...But [with designs lacking the universal joint] every time the wind blew too strong, it blew the sail out of the socket. So I decided, "Well I'm going to have to use the universal joint." I was a little afraid it would break your legs if you went over. Then I started developing one using rubber hoses...I even tried a metal universal joint, and I finally devised one using ropes (Darby 1997).

21.1.2.2. Major improvement innovations

Manufacturers developed 27% (n=12) of the major improvement innovations in the sample; users developed 57% (n=26).[9] Major improvement innovations are an important subset of overall innovative activity in the sport. They are those equipment innovations identified by multiple experts as being most critical to the development of the sport.

[9] Percentage calculations throughout the paper exclude nine innovations for which the innovator is not known.

An existing manufacturer developed two major improvement innovations in the sample. Existing manufacturers might (theoretically) be of two types: those in closely related porduct categories (e.g., sailing, skiing, surfing) and those with production or design capabilities useful in mass-producing the product. The existing manufacturer observed in this studyNHSwas a small, Northern California firm founded by three surfing buddies to design and build surfboards. A surplus of fiberglass and a deficit of customers led the trio to begin designing skateboards. NHS ultimately developed two key skateboarding innovations: the use of precision ball bearings and skateboard truck modifications that allowed each wheel to move independently of the others.

Manufacturers organized specifically to produce for the sport in question developed three major improvement innovations in the sample. For example, F2, which was initially organized to distribute and manufacture windsurfers for the European market, is believed to have pioneered the use of polyester film as a sail material.

Existing sports equipment component suppliers developed seven major improvement innovations in the sample. These innovations generally involved transferring specific technology and know-how from an existing sport to the novel one. For example, a maker of fins for surfboards was asked to design a fin to solve some windsurfer-specific problems. Similarly, a producer of sailboat sails worked to improve the design of windsurfing sails and made several innovations. In most cases, the innovative components suppliers were small craft shops run by their founder-owners.

Users and user-manufacturers developed 58% of all improvement innovations in the sports studied. The term user-manufacturer describes innovative users who founded firms after prototyping and beginning to refine an innovation(s)and, in most cases, also after sharing the innovation(s) with others.[10] These individuals benefited from their innovation(s) both through use and financially. As discussed earlier, the firms they founded are generally best characterized as small, lifestyle firms rather than mass market producers.

[10] The first innovation produced by user-manufacturers was made prior to the creation of a firm. Subsequent innovations made by user-manufacturers with 10 or fewer employees are included in this category. Innovations developed by user-founded firms that grew beyond 10 employees are classified as manufacturer innovations to conservatively estimate innovative activity by users.



Open Sources 2.0
Open Sources 2.0: The Continuing Evolution
ISBN: 0596008023
EAN: 2147483647
Year: 2004
Pages: 217

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