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Even with a vibrant community you can still fail
Posted on March 14th 2009
Ok, so you have a vibrant community. People are submitting ideas for your next generation products, they seem to be having fun, they are engaged and keep referring new members. Your community is growing at a healthy clip and you are happy.
Be careful - your chances of failure are still fairly high.
Let's look at a couple of reasons why vibrant communities may not achieve the goals they were set up to deliver.
1. You are getting the wrong ideas from your community
There are all sorts of reasons why you could get the wrong ideas from your community. One of them is the use of wrong incentives. If you pay people $10 for 10 ideas you will get 10 ideas - but are those really the ideas that will make a difference in your new product innovation?
Dan Ariely, the author of Predictably Irrational would argue that by tapping into people's social framework instead of their market framework, which is what you do when when you pay them, would deliver better results. The Economist argues a similar point as it relates to customer reviews (h/t Matt Rhodes).
2. You are getting too close to your community members
There is such a thing are listening too closely to your customers. First off, your customers may not know how to express their needs in a way that would let you help them. They may complain about group scheduling issues, but that does not tell you whether they need a group calendaring or a group task management solution. In new product innovation, there is a huge difference between what is being said and what is being meant.
Second, it is a known fact that innovations based on direct customer feedback leads to incremental innovations at best, not the breakthrough innovations that allow you to steal marketshare from your competitors.
Lastly, and as the late Peter Drucker once said, for most companies a majority of their future revenue stream has to come from people who are not yet customers (Drucker estimates that to be 70% across all industries). If that is the case, then listening too closely to your existing customers may result in products that will stand in the way of acquiring first time users.
So yes, communities are a must in today's economy. And getting communities to work is hard - really hard. But once you have it working, it may still not deliver what you are looking for. Communities have to be fully integrated with the business processes they are intended to support and need to be driven by the same common sense principles (not that all real world processes are driven by common sense).