Spreading the power, new signs of customer driven products and services

Something about the way business is being done has been changing over the past few decades.  In Michael Hammer and James Champy’s 1993 book “Reengineering the Corporation: A Manifesto for Business Revolution” they cite ‘the customer’ as one of the major changes sweeping the modern business environment. They assert that the customer is coming into a position of power and demanding choice and customization in everything.  It’s nearly 20 years later, but this point is what I reflected on when I bumped into a few items on the Web recently.

Order your own comedian
Comedian Paul F. Tompkins says that if you can get 300 people from your town to commit to seeing him by joining a Facebook group then he’ll book a gig in your city. This is an interesting way of doing things. The traditional process was that you’d somehow forecast the cities that would respond well to your comedy, you’d then book a show at a venue there and then you’d plaster the city with advertising trying to get people to buy tickets so you can cover your costs and hopefully make some money too.  This process has two main components, forecasting and advertising/marketing.  What Tompkins is doing flips the equation, which makes it a pull process instead of a push process. He is pulled to cities where fans (customers) take it upon themselves to organize a display of actual demand instead of him pushing himself on cities trying to create demand.  This reduces the risk of Tompkins performing to an empty hall (losing lots of money) because when he goes to book a gig he already has an estimate of actual demand, not a best guess forecast.  The cost of organizing this estimate of demand is so dramatically low that it becomes a viable and inexpensive method that both he and his customers can use easily.  How much cost or risk does a person incur when they join a group on Facebook to try to get Tompkins to book a gig in their city?  None.  To get an idea for how far that cost has fallen, just imagine how one would try to pull off this type of organization in the days before the Internet. 

Design your own shirt
Shirts My Way and Blank Label are two companies offering massive customization to customers who order shirts from them.  You go to their site and select everything from the cloth to the designs you want for your shirt.  This type of customization goes much further than simply picking a color and size, but it’s still a selection based activity.  Customers aren’t actually designing shirts, per se, but rather selecting from a much wider selection of options.  Even with this limitation, it does illustrate a shift to massive amounts of customization. 

Design your own car
Local Motors is doing something that should be turning the heads of CEOs all across Detroit.  They’ve applied the software development concepts of open source and crowd sourcing to automotive design and manufacturing and they’re coming up with stunning results.  This is where we start to depart from the 1993 view of Hammer and Champy, who still viewed the customer as a distinct entity separate from the company, and we start getting into new territory.  Where does one draw the line between customer and company when the customer is actively designing and manufacturing the very products and services that you are selling?  Now that the costs of organizing have fallen through the floor, as Clay Shirky puts it in his book “Here Comes Everybody: The Power of Organizing Without Organizations“, it is possible for an organization like Local Motors to exist.  In fact, calling Local Motors an ‘organization’ is almost inaccurate, maybe a ‘coordination’ would be a better term.   In a traditional organization a person who contributes only one idea would make a horrible employee.  With Local Motors the concern is about your ideas and output, not how long you fill a chair every day. If you only come up with one good idea that’s fine.  The people who supply the ideas, often those who used to be just passive customers, can come and go as they please.  Some will contribute many and many more will contribute just some.  In the context of online media, Dan Gillmor calls this group of people the “former audience“. 

Write your own newspaper?
Ok, so I didn’t recently bump into this one, but when you mention the ‘former audience’ in a post like this you can’t not mention AnnArbor.com.  This site was the online replacement for the printed Ann Arbor News newspaper, which served the Ann Arbor community until about a year ago.  AnnArbor.com has full time paid journalists, but they also employ a cadre of volunteer bloggers.  Additionally, anyone (and I mean anyone) can simply submit a news story for immediate inclusion.  So, when anyone can contribute what becomes of the traditional roles of readers, journalists, and editors in this new form of organization?  Well, that’s another story.