User Generated Brands and their Contribution to the Diffusion of User Innovations

Research Paper by Eric von Hippel and others:

Abstract:
It has been argued that users can create innovations and also diffuse them peer-to-peer independent of support or involvement by producers: that “user-only” innovation systems can exist. It is known that users can be incented to innovate via benefits from in-house use. But users’ incentives to invest in diffusion are much less clear: benefits that others might obtain from their innovation can be largely or entirely an externality for user innovators.

Of course, effective distribution of information products can be done near-costlessly via posting downloadable content – for example, software – on the Internet. However, potential adopters must still learn about the product and trust its qualities. In producer systems, this aspect of diffusion is heavily supported via the creation of trusted brands. It has been shown that brands help to increase awareness, to communicate a product’s benefits, and to reduce perceived risks of adoption.

The development of brands by producers is traditionally seen as a very costly exercise – unlikely to be thought of as worthwhile by users who expect little or no benefits from the diffusion of their innovations to others. In this paper, we explore the creation of a strong and trusted brand by the Apache software community – and find it was created costlessly, as a side effect of normal community functioning. We think the costless creation of strong brands is an option that is generally available to user innovation communities. It supports, we propose, the existence of robust, user-only innovation systems by helping to solve the problem of low-cost diffusion of trusted user-developed innovations.

Download the full pdf at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1756941

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