Aircraft Industry

article review:

Von Hippel, Eric “lead users: a source of novel product concepts” management Science 32 (July 1986),pp. 791-805.

Article Overview

In this article, Erick von Hippel is trying to put more emphasis on the issue of the high failure rate of substantial number of innovations in the marketplace, especially for a “high technology” product. The methodology being used in this article to address the high failure rate for this product is called lead user process. Lead user is defined as a customer who are well ahead of market trends, who have needs that go far beyond those of the average user, and-critically-who innovate solution to their problem. Although the insights of lead users are as constrained to the familiar as those of other users, lead users are familiar with conditions which lie in the future for most-and so are in a position to provide accurate data on needs related to such future conditions. Lead Users of a novel or enhanced product, process, or service have been defined by Erick von Hippel as those who display two characteristics with respect to it: first, they face needs that will be general in marketplace but face them months or years before the bulk of the market place encounters them. Second, they expect to benefit significantly by obtaining a solution to those needs.

Research conducted by Erick von Hippel on lead user, shows that many products are initially thought or even prototyped by user rather than the manufactures. For example, in the chemical industry, the percentage of products developed by user compared to those developed by manufacturer is 70:30, in the scientific instrument innovation (first of type, e.g. first NMR) is 100:0, in the process machinery is 67:33 and so forth. The type of innovation developed by user is ranging from new functional capability (82%) to automation of existing function or reliability improvement (13%).

To summarize, Erick von Hippel suggests the use of four-step process to incorporate lead...