Reports

Where Does Innovation Start: With Customers, Users, or Inventors?

Stav Rosenzweig, Gerard J. Tellis, and David Mazursky, 2015, 15-108

Innovations are vital for business health, survival, and success. All innovations start with an idea. Understanding the origin of ideas for innovations is critical to firms that are striving to come up with the next big idea before competitors do. This study seeks to understand the origins of innovative ideas. In particular, to what extent do ideas originate with the customer, inventor, or user? What role does technology play in the origin of ideas?

Stav Rosenzweig, Gerard Tellis, and David Mazursky offer a framework with three agents – customer, inventor, and user – and three technologies – novel, imitative, and exaptive – that affect the origin of ideas for innovations. Using the historical method, they collect data on and analyze 180 innovations, commercialized between 1900 and 1999, and recreate their early history, especially during the stage of ideation. The historical approach enables a longitudinal perspective that is missing in innovation studies.

The study yields three main findings, the first two of which run contrary to prevalent thinking in the marketing literature. First, inventors play a significantly bigger role than customers in the origin of ideas for innovations. Second, benefits of the innovation to customers increase as the role of customers in the origin of the idea decreases. Third, superior benefits also increase as the role of exaptive technology increases.

These findings provide important managerial implications. First, managers can learn which agent and which technology in the origin of the idea contribute to superior benefits of the innovation and allocate their resources accordingly. Second, managers can identify novel technology solutions for their firm’s internal problems, and convert those to serve external customers. Third, exaptive technology seems to possess an unfulfilled potential for firms’ managers seeking ideas for innovation: in their quest for ideas for new ideas, managers should actively rethink how their technology can serve customers in domains different than the ones they currently serve. Managers should also canvass other product domains and identify plausible technology shifts to their own product domain.

Stav Rosenzweig is Assistant Professor of Marketing, The Guilford Glazer Faculty of Business Administration, Ben-Gurion University of the Negev, Israel. Gerard J. Tellis is Director of the Center for Global Innovation, Neely Chair in American Enterprise and Professor of Marketing, Marshall School of Business, University of Southern California, Los Angeles. David Mazursky is The Kmart Professor of Marketing, School of Business Administration, The Hebrew University of Jerusalem, Israel.

Acknowledgments
This study was funded by grants from the Marketing Science Institute, the Israel Foundation Trustees, the Kmart Foundation, Don Murray to the USC Marshall Center for Global Innovation, and the Davidson research center. The authors benefited from helpful comments by Nukhet Harmancioglu, Deepa Chandrasekaran, and Gaia Rubera.

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