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A86 - Lead Users Generate Innovative Ideas and Great Returns

Machine Design, Penton Publishing, Cleveland, Ohio, USA
February 13, 2014

Among the most satisfying experiences for an engineer is to be part of product that’s New-To-The-Industry or New-To-The-World. The satisfaction of seeing your creation touted by the media, consumers, and the like is hard to match. Yet, a very small percentage of products released to market are truly new.

Several companies have developed successful new products, thanks to an approached called Lead User Analysis [LUA].

Bose Corp., for example, can trace its meteoric rise in the stereo equipment industry to a Lead User Analysis that showed in the 1960s there was a large market of high-end audiophiles that would pay thousands of dollars for speakers with accurate sound reproduction. Sony used LUA in developing the WalkMan, a product that kicked off the wearable electronics movement in the early 1980s. MiniMed's wearable insulin pump in the early 1990s, now a Medtronic product, was also developed in part due to LUA.

LUA has been around for several decades, yet few companies have systematically deployed it. Instead, companies continue to center on focus groups, data mining, emotional intelligence studies, and the like. That’s because these techniques are familiar and do not require something different be done for every project, and management readily accepts them. However, they rarely result in truly new products.

If you query "Lead User Analysis" on an Internet search engine, you will likely get more than one-hundred million hits. It is far from a pie-in-the-sky or luck-of-the-draw thing. Eric von Hippel at MIT is generally credited with fleshing it out as a repeatable process that can be successfully used to identify Lead Users.

This article goes on to explain von Hippel's definition of a Lead User, and gives the reader an idea of the basic approach. A good reference, Blue Ocean Strategy by W. Chan Kim, that describes the significant financial results of New-To-The-Industry and New-To-The-World products is then cited.

This article is an ongoing column in Penton Publishing's Machine Design magazine entitled "Goldense On R&D-Product Development."

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