Product Development 2.0

The Move to Product Development 2.0

	Product Development 1.0	Product Development 2.0
Primary Customer Interaction Channel:	Telephone, Mail, Face-to-Face, One Way Media (Print, TV, Radio, etc.), e-mail	World Wide Web, e-mail, IM
Source of Innovation:	Organizations	Customers
Innovation Cycle:	Months, Years	Minutes, Hours, Days, Weeks
Content Creators:	Internal Producers	External Producers
Feedback Mechanisms:	Market research, satisfaction surveys, complaints, focus groups	Analytics, online requests, user contributed changes
Customer Engagement Style:	Controlled, well-defined process	Spontaneous and chaotic
Product Development Process:	Upfront design	Less upfront, much more emergent
Product Architecture:	Closed, not designed for easy extension or reuse by others; walled garden	Open, very easy to extend, refine, change and add on to, ecosystem friendly, designed (and legal) for widespread remixing and mashups
Product Development Culture:	Hierarchical, centralized, Not Invented Here, somewhat collaborative, expert-driven	Egalitarian, decentralized, remix instead of reinvent, highly collaborative, Wisdom of Crowds
Product Testing:	Internal, dedicated test groups, hand-picked select customers	Users as testers
Customer Support:	Customer Service	User Community
Product Promotion:	One-Way Marketing and Advertising	Viral propagation, explicit leveraging of network effects, word of mouth, user generated and other two-way advertising
Business Model:	Product Sales, Customer Service and Support Fees, Service Access Charges, Servicing High Demand Products	Advertising, Subscriptions, Product Sales, Servicing All Product Niches (The Long Tail), Unintended Uses
Customer Relationship:	External Buyer (Consumer)	Partner and -- increasingly remunerated -- Supplier (Consumers as Producers )
Product Ownership:	Institution, particularly executive management and shareholders	Entire User Community
Partnering Process:	Formal, explicit, infrequent, mediated	Ad hoc, thousands of partners online, disintermediated
Product Development and Integration Tools:	Heavyweight, formal, complex, expensive, time-consuming, enterprise-oriented	Lightweight, informal, simple, free, fast, consumer-oriented
Competitive Advantage:	Superior products, legal barriers to entry (IP protections), brand name advantage, price, popularity, distribution channel agreements	#1 or #2 market leader, leveraging crowdsourcing effectively, mass customization, control over hard-to-create data, end-user sense of ownership, popularity, cost-effective customer self-service, audience size, best-of-breed architectures of participation

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