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                                  How  Relations  Influence  Design  in  the  Era  of  the  Internet  

 

 

Sebastiaan  Wolzak   Royal  College  of  Art,  London     5th  of  October  2012                                          


Table  of  Content   Introduction  

3  

Internet  changes  markets   The  downfall  of  Yahoo  and  rise  of  Google   Creating  new  market  space   Defining  the  core  proposition  

4   4   5   6  

Relationships   Trust   Communities   Relationships  change   Shareholders  impact   System  structure   Crowdsourcing   Active  and  passive  crowdsourcing   Crowdsourcing  methods  

7   7   8   9   11   11   12   14   15  

Conclusion  

15  

Bibliography  

17  

 

 

How  Relations  Influence  Design  in  the  Era  of  the  Internet  |  

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Introduction  

    I  started  my  dissertation  proposal  about  the  theory  of  NextNature,  the   merge  between  nature  and  culture,  and  where  to  differentiate  between  nature   and  cultural  emerged  nature.  During  my  research,  I  have  been  reading  a  lot   about  different  environments  and  eventually  the  Internet  as  concept  of  an   environment.  As  I  was  researching  more  about  the  Internet  and  products  in   systems  using  the  Internet  as  an  environment  to  grow  and  make  profit,  I  got   interested  in  how  relationships,  the  Internet  is  based  on,  can  influence  new   product  development.  Google  for  example  is  building  up  a  massive  network  of  its   own  services  interacting  within  their  system  and  within  the  entire  Internet;  or   Facebook  is  becoming  a  part  of  our  daily  life  but  struggling  to  develop  a   sustainable  business;  Twitter,  is  everywhere  with  its  simple  concept  of  140   characters  messages.  I  am  wondering  how  relationships  influence  a  system  and   how  to  make  use  of  that  knowledge  for  a  product  platform  designed  system.  I   believe  that  products  can  serve  as  platform  to  offer  services  that  provide  the   opportunity  to  changing  user  experiences  and  meet  changing  needs.  In  my   opinion  it  is  more  important  to  develop  products  that  are  flexible  and  last  longer   in  terms  of  experience,  rather  than  keep  redesigning  unsustainable  product   generations  repeatedly.  The  material  used  to  create  a  slightly  new  user   experience  with  every  product  generation  is  tremendous.  Companies  like  Apple   and  Google  have  shown  that  it  is  possible  to  develop  product  platforms,  which   are  able  to  develop  themselves  through  crowdsourcing  and  also  deal  with   changing  customer  needs  over  time.  I  am  not  saying  that  the  iPhone  is  a   sustainable  product  because  it  is  replaced  on  a  yearly  base  by  a  new  smartphone.   But  in  my  opinion  there  is  potential  in  the  concept  behind  it.  A  four-­‐year-­‐old   iPhone  is  still  able  to  deliver  a  new  generation  iPhone  experience  due  to  Apple’s   App-­‐Store.       How  do  relationships  influence  design  in  the  era  of  the  Internet?     During  his  TEDTalk  at  the  EG  conference  in  2007,  Kevin  Kelly  describes   the  Internet  as  a  single,  global  machine.  (Kelly,  2007)  After  calculating  the   information  processed  by  the  Internet,  he  compared  it  with  the  capabilities  of   the  human  brain.  The  Internet  can  be  seen  as  a  large  machine  processing  a   immense  amounts  of  data,  which  is  embodied  by  devices  like  smartphones,   laptops,  cashpoints  or  a  digital  billboard.  Kevin  Kelly  describes  them  as  windows   looking  into  that  machine.  Back  in  2007,  he  predicted  the  union  between  the   atomic  and  the  digital  world.  The  concept  leads  to  his  next  assumption  in  which   he  claimed  that  the  spectrum  of  media  will  become  one  media  platform  because   they  will  share  more  in  common  and  share  the  same  “laws  of  media”:     o Copies  have  no  value   o Value  is  in  the  uncopyable   o Media  wants  to  be  liquid/  free   o Network  effects  rule  –  the  more  you  have,  the  more  you  get   o Personalization  

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Technological  developments  make  communication  cheap.  I  believe  that   everything  that  is  handling  digital  data  follows  the”  laws  of  media”  and  therefore   new  product  development  needs  to  embed  this  thought.  

Internet  changes  markets         A  good  example  for  the  changing  vicissitudes  of  the  Internet  is  the   downfall  of  Yahoo  and  the  success  of  Google.  The  essential  difference  between   both  online  search  engines  is  the  way  they  rate  the  importance  and  relevance  of   their  links  and  search  results.  Yahoo  selects  results  according  to  their  belief  of   importance.  They  decide  for  their  customers  what  is  relevant  and  what  is  not.   Google,  in  contrast,  rates  the  importance  of  results  based  upon  the  amount  of   other  pages  that  link  to  that  particular  website.  Simply  put,  the  more  links  the   better  and  thus  the  more  relevant  the  content.      

The  downfall  of  Yahoo  and  rise  of  Google    

The  Internet  was  slow  and  expensive  15  years  ago.  Google  did  not  exist   and  far  fewer  webpages  were  online.  In  those  times,  Yahoo  offered  a  web  portal   next  to  its  search  engine  providing  the  latest  news,  a  free  emailing  service  and  an   integrated  chat  facility  to  keep  up  with  friends.  While  finding  and  loading  pages   was  not  fun,  it  offered  its  users  the  bundled  Internet  experience  from  one  online   portal.  Yahoo  was  the  “gate  of  the  Internet”  and  designed  as  a  destination.  As  the   Internet  got  quicker  and  cheaper  and  online  content  growth  exploded   exponentially  with  blogs,  websites,  news,  photos,  videos,  you  name  it,  needs   changed  and  it  was  impossible  for  Yahoo  to  review  everything  before  adding  it  to   their  database.  Furthermore,  the  Internet  became  a  playground  for  everybody,   not  only  for  big  players.  Yahoo  generated  its  revenue  with  Banner  Ad  revenue   and  missed  the  opportunity  of  search  advertising,  which  can  be  better  targeted   and  is  cheaper.  That  meant  that  small  businesses  could  also  afford  it.  The   concept  of  “designing  a  centralized  destination”  did  not  support  the  new   possibilities  the  exponentially  growing  Internet  was  offering.         In  comparison,  Google  thinks  in  a  distributive  way.  Its  cover  page  on  its   main  webpage  just  features  the  Google  logo,  an  input  box  and  the  search-­‐button  -­‐   no  ads  or  menu-­‐bar.  It  is  simply  what  it  is:  a  search  engine  to  access  the  Internet.   Google  is  structured  differently  than  Yahoo.  Next  to  its  search  engine,  it  offers   many  services  and  platforms:  “Blogger”  for  publishing  content,  “Google  Docs”   and  “Google  Calendar”  for  office  collaboration,  “YouTube”  for  videos,  “Picasa”  for   photos,  “Google  Analytics”  to  track  sites’  traffic,  Social  Network  “Google  Plus”,   “Gmail”  for  emailing,  “Android”  for  Smartphones,  “AdSense”  for  revenue  and   “Google  Maps”.  (Jarvis,  2009)  But  Google  does  not  centralize  all  these  services  on   their  cover  page  trying  to  lock  up  users  on  their  website.  Instead,  they  enable   users  to  embed  services,  like  Google  Maps  or  YouTube  on  their  blogs,  company   websites,  social  networks  and  applications.  In  this  way,  Google  does  not  create   an  audience  for  its  services  to  sell  advertisements  but  opens  up  its  services  and   provides  a  platform,  upon  which  users  can  develop  new  applications  therefore  

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extending  Google’s  own  service.         Today  finding  a  store  or  restaurant  is  easy  -­‐  it  does  not  require  searching   Yellow  Pages  for  an  address  or  a  telephone  number  anymore.  (Kelly,  2007)  Over   the  years,  users  integrated  all  their  information  into  Google  Maps.  Google  gave   them  free  services  and  in  return  got  back  free  information  to  extend  and   improve  its  content.         In  thinking  in  systems  and  relations  and  giving  control  to  users,  a  holistic   point  of  view  becomes  more  important  than  before.  Products  and  services  do  not   exist  in  a  local  vacuum.  (Kim  &  Mauborgne,  2004)  The  Internet  connects  markets   and  people  and  increases  competition  dramatically.  Products  and  services   cannot  define  their  own  value  through  existence  -­‐  they  are  replaceable  and   replicable.  The  environment  in  which  the  product  or  system  is  placed,  defines   the  value.  Technology,  behavioral  patterns,  politics  or  business  are  constantly   changing  and  creating  new  relationships  amongst  each  other.  It  is  an  ever-­‐ changing  spectrum  of  linkages:  generating  new  design  opportunities  and   destroying  others.  Consequently,  systems  are  redesigned  relationships  -­‐  the   Internet  is  not  just  a  playground  for  people  to  communicate.  “Stuff”  does  it  too:   your  running  shoes,  car,  fridge,  clothes,  everything  can  create  a  relationship,  if   we  make  it  communicate.  That  is  what  is  happening  right  now  and  on  into  the   future.  Therefore,  it  is  crucial  to  do  not  only  understand  how  users  execute  their   actions  but  their  intention  in  relation  to  the  context  and  environment  they  life  in.  

Creating  new  market  space    

  It  is  important  to  consider  the  fast  pace,  tremendous  competition  and   product  touch  points  stimulated  by  today’s  connectivity.  Alternatives  enable   customers  to  be  fussy  and  the  Internet  offers  large  numbers  of  alternatives.  The   mass  market  eventually  breaks  down  into  tiny  niches,  aiming  for  every  single   customer  preference.  (Jarvis,  2009)  The  “start-­‐up  friendly”  market  situation   offered  by  the  Internet  is  great  as  long  as  a  product  provides  unique  value  to   stick  out  from  the  mass  of  niche  products.  But  it  is  likely  that  somebody  else  has   the  same  idea  and  is  serving  the  same  market.  Therefore,  the  definition  of  the   core  value  proposition  and  an  optimal  implementation  is  the  most  important  and   essential  part  in  new  product  development.  The  smoother  a  product  fits  into  the   context  and  the  more  flexibly  it  is  modeled  into  the  market,  the  more  sustainable   it  can  be.  (MacCormack,  Verganti,  &  Iansiti,  2010)  The  situation  is  comparable  to   a  “format  war”.         A  format  war  occurs  when  two  incompatible  formats  of  similar   technology  are  competing  against  each  other  in  the  same  market.  In  most  cases,   in  the  end  one  of  them  is  able  to  establish  itself  as  standard  -­‐  often  by  better   marketing  strategies  or  business  alliances  and  often  leaving  groups  of  unlucky   consumers  and  orphaned  features.  In  the  past  couple  of  years,  format  wars  were   very  common  in  the  digital  media  industry  and  heavily  influenced  by  the   cooperation  of  large  retailers.    

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The  concept  of  a  format  war  is  similar  to  today’s  situation  and   competition  is  stimulated  through  the  possibilities  of  the  Internet.  Features  and   specifications  are  similar  and  often  winning  formats  are  better  enabled  through   content,  business  models,  strategies  and  cooperation.  The  same  applies  for   today’s  new  product  development.  However,  the  fundamental  challenge  for  new   product  development  is  the  uncertain  and  dynamic  environment.  (MacCormack,   Verganti,  &  Iansiti,  2010)  This  paper  is  not  focusing  on  saturated  markets  and   how  to  compete  in  a  format  war.  From  a  holistic  view,  the  space,  between   substitute  industries,  provides  great  opportunities  for  innovation.  (Kim  &   Mauborgne,  2004)  Understanding  the  needs  of  customers  between  these   industries  and  improve  what  communities  in  these  spaces  are  already  doing,   according  to  Marc  Zuckerberg.  (Jarvis,  2009)     “Consider  Home  Depot,  the  company  that  has  revolutionized  the  do-­‐it-­‐ yourself  market  in  North  America.  In  20  years,  Home  Depot  has  become  a   $24  billion  business,  creating  over  130.000  new  jobs  in  more  than  660   stores.  By  the  end  of  the  year  2000,  the  company  expects  to  have  over   1,100  stores  in  the  Americas.  Home  Depot  did  not  achieve  that  level  of   growth  simply  by  taking  market  share  away  from  other  hardware  stores;   rather,  it  has  created  a  new  market  of  do-­‐it-­‐yourself  out  of  ordinary  home   owners.”  (Kim  &  Mauborgne,  2004)       The  same  applies  to  Instagram.  They  understood  the  lag  when  taking   large  pictures  on  a  smartphone  and  sharing  them  via  Twitter,  Facebook,  or   Tumblr.  Instagram  enabled  the  user  to  improve,  resize  and  share  easily  their   pictures  on  multiple  social  networks.  Today  over  5  million  pictures  per  day  are   uploaded  through  the  Instagram  application.  (Fox,  2012)In  order  to  avoid  the   competition  in  substituted  products  and  services,  the  Internet  can  be  used  to   identify  and  understand  the  spaces  between  industries  and  develop  a  core   proposition  that  focuses  on  these  spaces.    

Defining  the  core  proposition  

    The  graphic  (see  Figure  1)  below  shows  how  the  focused  approach  of   head-­‐to-­‐head  competition  can  change  into  an  approach  in  which  a  new  market   space  is  created.  Instead  of  centralizing  the  research  and  design  process  around   one  industry  or  user  group,  the  way  of  thinking  is  to  broaden  up  and  touching   multiple  markets  and  looking  beyond  the  boundaries.  

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Figure 1, Creating  New  Market  Space,  Harvard  Business  School  Review  OnPoint  (Page  11)  by  Kim,  C.  K.,  &   Mauborgne,  R.  (2004)    

 

  Before  we  are  able,  to  develop  a  core  proposition  we  need  to  understand   what  relations  and  system  structures  mean  for  a  service  and  company.  

Relationships    

  A  multi-­‐disciplinary  team  or  panel  of  experts  can  help  take  a  holistic  view   and  understand  the  scope  of  relationships  and  spaces  between  industries,  users   and  communities.  There  is  the  risk  of  inaccuracy  based  on  out-­‐of-­‐date  experience   and  erroneous  assumptions  but  as  a  preliminary  stage  and  to  support  evaluation,   this  is  a  good  starting  point  to  pin  point  design  opportunities.  (Coleman,   Clarkson,  Dong,  &  Cassim,  2007)  It  sets  the  framework  to  create  a  project   proposition,  which  is  the  core  proposition  of  the  system.  Before  that  however,   the  scope  and  importance  of  relationships  need  to  be  understood  since  that  is   the  backbone  on  which  the  Internet  is  operating.  

Trust       The  success  of  many  online  media  is  based  on  their  trust  in  the  user  and   the  control  the  user  has  over  their  products.    Such  services  like  Wikipedia  or   Google’s  “PageRank”  could  not  exist  without  trusting  people  and  handing  over   control.     ‘PageRank  relies  on  the  uniquely  democratic  nature  of  the  web  by  using   its  vast  link  structure  as  an  indicator  of  an  individual  page’s  value.  In   essence,  Google  interprets  a  link  from  page  A  to  page  B  as  a  vote,  by  page   A,  for  page  B.  But,  Google  looks  at  more  than  the  sheer  volume  of  votes,  or  

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links  a  page  receives;  it  also  analyzes  the  page  that  casts  the  vote.  Votes   cast  by  pages  that  are  themselves  “important”  weigh  more  heavily  and   help  to  make  other  pages  “important.”’  (Blachman  &  Peek,  2007)       The  same  principle  made  Flickr  famous  with  its  “selected”  pictures.  The   algorithm  of  Flickr  even  analyzes  relationships  between  people  to  estimate  the   rating  value  of  a  picture.  The  abundance  of  information  leads  to  quality  in  the   end  because  customers  have  a  choice  and  a  voice  to  communicate  that  choice.   Creating  an  interface  in  which  users  can  share  or  indicate  their  choices  or   opinions,  creates  an  abundance  of  information,  which  can  be  processed  through   algorithms.  This  technique  improves  encyclopedia  articles  on  Wikipedia  or  helps   a  company  to  improve  their  products.       The  crowd  is  willing  to  share  information  with  you  and  everybody  else.  5   million  pictures  are  uploaded  on  Instagram  every  day.  (Fox,  2012)  Sharing  is  fun   and  users  are  willing  to  share  photos,  locations  or  opinions.  They  will  tell  a   company  what  they  like  about  their  product  and  what  they  do  not  appreciate.  A   company  just  needs  to  ask  and  listen  to  the  feedback  -­‐  as  Starbucks  is  doing  with   My  Starbucks  Idea  (Starbucks  Corporation,  2010).  “…  Starbucks  reported  that   they  have  already  implemented  a  few  hundred  consumer  ideas  submitted   through  their  crowdsourcing  communities.”  (Bayus,  2012)       However,  the  examples  of  Starbucks  and  Dell  with  it  “IdeaStorm”  who  are   both  using  crowdsourcing  to  improve  their  products  is  still  an  “add-­‐on”  service   idea  and  not  related  and  implemented  in  the  entire  system  thinking  of  the   service  and  product.  It  serves  as  a  feedback  system  and  playground  for  ideas  but   without  giving  essential  control  to  the  user.  Google,  Facebook,  Apple  or  Twitter   are  a  step  ahead  in  providing  a  developer  toolkit  thus  enabling  users  to  develop   their  own  applications  for  the  company’s  platform.  It  is  the  community  behind   Apple’s  iOS  and  Google’s  Android  that  makes  their  operating  system  desirable,   helping  them  to  hold  more  than  85.6  percent  market  share  in  the  U.S.  in  July   2012.  (Schroeder,  2012)  The  biggest  difference  lies  in  their  system  organization:     Google  relies  on  an  open-­‐system  whereby  Apple  uses  a  closed-­‐system.  Both  have   their  advantages  and  disadvantages.    

Communities       Nevertheless,  they  understood  that  there  is  potential  in  giving  their  users   control  and  host  a  community  that  is  helping  them  satisfy  most  of  their   customers,  increases  their  profit  and  keeps  their  operating  system  updated   alongside  changing  user  needs.  It  does  not  take  much  to  understand  that  other   companies  want  to  start  their  own  community.  Unfortunately,  you  cannot  just   create  communities  according  to  Facebook  Founder  Marc  Zuckerberg.  At  the   annual  meeting  of  the  World  Economic  Forum  International  Media  Council  in   Davos,  Switzerland,  Marc  Zuckerberg  was  approached  by  the  head  of  a  powerful   news  organization  asking  him  for  advice  how  to  build  his  own  community.   Zuckerberg  replied  with:  ‘”You  can’t”  Full  Stop.  Hard  stare’.  (Jarvis,  2009)       Yahoo  is  an  example  of  a  failed  company  trying  to  build  its  own   community.  Over  time,  the  Internet  has  became  a  place  for  everybody,  the  

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possibilities  have  increased  and  customer  needs  have  changed.  Yahoo’s   centralized  web  portal  has  lost  its  value  as  the  tried  to  keep  customers  on  their   portal  as  long  as  possible  and  earn  profit  from  banner  advertisements.         How  did  Facebook,  Apple  or  Google  build  their  communities?  In  a  later   point  of  the  conversation  between  Marc  Zuckerberg  and  the  publisher,  he   offered  more  advice.  “He  told  the  assembled  media  moguls  that  they  were  asking   the  wrong  question.  You  do  not  start  communities,  he  said.  Communities  already   exist.  They  are  already  doing  what  they  want  to  do.  The  question  you  should  ask   is  how  you  can  help  them  do  that  better.”  (Jarvis,  2009)     In  my  opinion,  Zuckerberg  is  missing  a  crucial  point.  Disruptive  products  or   services  can  influence  and  fragment  communities,  and  change  the  way  people   behave  and  interact.  Without  Apple  and  Google,  Facebook  would  not  be  the  data   kraken  it  is  today.  Users  would  not  share  locations,  photos  and  tweets  on  the  go.   Consequently,  disruptive  products  or  services  can  be  the  reason  to  form  or   reshape  a  community.  I  do  not  question  the  core  concept  of  a  community  but  a   product  or  company  can  be  part  of  that  community  it  influences.       In  1998,  Nokia  introduced  the  Nokia  5100  series  with  a  user-­‐changeable   cover.  (Nokia,  2009)  People  loved  the  idea  and  soon  an  entire  industry  and   community  around  changeable  Nokia  covers  was  born.  Nowadays  the   opportunities  for  Nokia  are  huge  in  being  part  of  that  community.  They  reach   from  applications  for  customers  to  design  their  own  covers  up  to  a  Nokia   dedicated  online  store  where  users  could  sell  their  own  designs.  It  is  an  outdated   idea,  but  it  nevertheless  shows  how  something  small  can  create  an  opportunity   for  companies  to  enter  and  host  a  community.  The  same  counts  for  Apple  and   Google  -­‐  both  developed  a  way  to  interface  with  communities  –  allowing  third   parties  to  develop  applications  and,  through  their  applications  stores,  giving   them  a  piece  of  the  cake  in  return.  As  a  result,  their  devices  stay  updated  and   offer  a  large  range  of  experience  and  uses.  

Relationships  change  

    Systems  that  provide  control  to  their  users  can  under  some  circumstances   change  their  relationship  from  a  business-­‐to-­‐customer  model  to  a  business-­‐to-­‐ business  model.  In  the  case  of    Apple  and  Google,  users  have  become   stakeholders  in  the  system.  They  are  developing  most  of  the  applications  –   becoming,  in  effect,  the  backbone  of  the  successful  smartphone  industry.  Apple   for  example  offers  over  550.000  Applications  (Apps).  On  the  5th  of  March  2012   Apple  announced  that  over  25billion  apps  had  been  downloaded  from  the  App   Store.  (Apple  Inc.,  2012)     “We’d  like  to  thank  our  customers  and  developers  for  helping  us  achieve   this  historic  milestone  of  25  billion  apps  downloaded,”  said  Eddy  Cue,   Apple’s  senior  vice  president  of  Internet  Software  and  Services.  (Apple   Inc.,  2012)  

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Figure  2,  Chart:  Who  Participates  And  What  People  Are  Doing  Online.  Retrieved  09  24,  2012,  from   Businessweek:  http://www.businessweek.com/stories/2007-­‐06-­‐10/chart-­‐who-­‐participates-­‐and-­‐what-­‐ people-­‐are-­‐doing-­‐online  BloombergBusinessweek.  (2007,  06  10)    

    Consequently,  the  stakeholders’  customers  and  their  requirements  need   to  be  taken  into  consideration  and  met  by  the  system  design  too.  (Karol  &   Nelson,  2007)  Profit  is  involved  and  an  industry  is  created  around  the  system.   The  diagram  by  Forrest  Research  (Figure  2)  featured  on  the   (BloombergBusinessweek,  2007)  website  classifies  users  into  six  different   categories    (Creators,  Critics,  Collectors,  Joiners,  Spectators,  Inactives).  Eddy  Cue,   of  Apple  quotes  two  types  of  people:  customers  and  developers.  (Apple  Inc.,   2012)       Indeed  there  are  mainly  two  subgroups  of  categories:  customers   consuming  content  and  creating  data  and  developers  creating  apps.  Both  are   part  of  a  crowd-­‐sourced  system  or  product,  but  they  interface  differently.  They   have  different  requirements  but  are  both  crucial  for  a  successful  business.   Google’s  Android  outsells  Apple  iPhones  in  volume  terms  by  a  factor  of  two.   Nevertheless,  the  Apple  closed-­‐system  has  a  crucial  advantage.  Apple  is  more   efficient  at  updating  their  devices  and  applications,  only  one  type  of  phone  and   operating  system  needs  to  be  considered  by  developers,  which  makes  it  easier   and  cheaper  for  them.  They  do  not  have  to  consider  a  large  range  of  different   specifications  and  versions.  (Wingfield  &  Chen,  2012)  As  a  result,  Apple  is  more   profitable  than  Google  when  developing  applications  for  the  smartphone  market.   This  may  vary  however  when  market  shares  change  in  favor  of  Google  and  Apple   loses  a  large  amount  of  their  customers.    

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Considering  the  impact  communities  can  have  on  a  system,  it  is  important   to  design  a  system  from  a  holistic  point  of  view  and  with  an  understanding  of  the   dynamics  and  relations  affecting  the  overall  system.  Handing  over  control  to  a   crowd  enables  the  system  to  change  and  grow  with  changing  customer  demands.   Nevertheless,  relationship-­‐changes  should  not  be  underestimated  when   customers  (users)  become  stakeholders,  participating  in  the  system  or  product   development.  They  are  part  of  the  business  model  and  success  of  the  company.   Through  new  applications,  these  stakeholders  bring  new  customers  into  the   system.  These  indirect  customers  need  to  be  considered  in  the  system  design  as   much  as  direct  customers.  (Karol  &  Nelson,  2007)  

Shareholders  impact  

    Developers  are  not  the  only  important  shareholders.  Partners  from  the   outside  also  effect  many  products  and  services.    They  enable  a  company  to  serve   local  markets,  manage  transactions  or  ensure  customer  service.  The  basics  of   working  with  different  functions  needs  to  be  part  of  the  system  design  process   (Karol  &  Nelson,  2007)  and  has  to  be  selected  carefully,  because  it  influences  the   customer  experience.       The  best  online  bookstore  cannot  work  without  a  good  delivery  service   partner.  If  the  delivery  service  fails,  the  online  bookstore  fails.  Listing   requirements  when  rating  a  potential  partner  is  a  good  and  quick  method  in   selecting  the  most  suitable  partnerships.  A  gap  analysis  can  be  useful  to  compare   actual  performance  with  the  desired  performance,  set  by  the  core  value   proposition  of  the  system.  Once  a  partner  is  selected,  a  relationship  should  be   kept  as  flexible  as  possible.  The  tremendous  pace  of  today’s  markets  does  not   only  require  the  product  to  change  but  also  all  the  partner  relationship  too.  If  a   partner  is  not  able  to  keep  up  with  the  pace  of  innovation,  it  is  likely  that  the   partner  will  influence  the  efficiency  of  the  entire  system  in  which  the  product  or   service  is  placed.  Therefore,  it  is  important  that  the  partner  delivers  their  job  but   while  having  the  least  amount  of  involvement  in  the  project.  (Karol  &  Nelson,   2007)  That  keeps  the  system  and  partnership  flexible  and  changeable.  

System  structure  

    Apple  did  well  in  closing  the  loop  and  has  built  a  system  that  can  expand   within  the  walls  of  Apple  while  ensuring  that  everybody  participating  gets  a   piece  of  the  pie.  Nevertheless,  the  walls  Apple  is  using  to  control  with  are  as   much  their  strength  as  biggest  weakness.  Platforms  are  differentiated  into  open-­‐ system  and  closed-­‐system  platforms.  In  an  open-­‐system  there  is  no  gatekeeper   controlling  access  and  use  of  the  system.  On  the  other  hand,  a  closed-­‐system  has   a  limited  access  to  services,  software  or  hardware  within  its  own  system.   Everything  entering  the  protected  system  is  tested  and  reviewed  before  it  is   implemented.         In  a  Wall  street  journal  Interview,  Jonathan  Zittrain,  a  professor  of   Internet  law  at  Harvard  Law  School  and  co-­‐director  of  Harvard's  Berkman   Center  for  Internet  argues  that  open-­‐systems  offer  greater  flexibility  and  attract  

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more  usage  and  mind  share.  He  argues  that  Twitter  would  have  had  a  much   better  control  over  its  look  and  user  experience  if  they  had  had  a  closed-­‐system   but  they  decided  to  use  an  open-­‐system  for  the  benefits  and  to  enhance  the  usage   of  Tweets.    (Sherr  &  Totty,  2011)   “Instead,  Twitter  had  open  application  programming  interfaces,  or  APIs—a   way  of  allowing  other  companies  to  write  Twitter  applications  or  interact   with  Twitter  in  automated  ways.  That  led  to  new  interfaces  for  Twitter  that   some  users  liked  more,  which  drove  usage  and  made  Twitter  more   valuable.”     The  decision  seems  obvious.  Twitters’  core  proposition  is  not  looks  and   feel  -­‐  it  is  short  messaging  communication  service.  The  more  people  are  taking   part,  the  better  for  the  service.    On  the  other  hand,  a  closed-­‐system  enables  Apple   to  create  a  more  perfect  experience  throughout  all  their  devices  as  they  control   both  the  hardware  and  also  the  software  base  with  iOS.    “The  platform  is   predictable  in  terms  of  upgrades,  delivers  high  performance  and  works  the  same   on  any  generation  of  device.”,  says  Mark  Van  Den  Brink,  leading  the  Frog  Design   Inc.’s  world-­‐wide  engineering  team.  Nonetheless,  it  also  has  disadvantages,   especially  for  the  user  involving  customer  trust.  A  closed-­‐system  might  lock-­‐in   customers  because  their  investment  is  not  transferable  into  another  system.  It   creates  a  market  that  is  less  competitive  but  delivers  competition  within  the   system,  stimulating  innovation,  according  to  Tom  Eisenmann,  Professor  at   Harvard  University  (Dixon,  2010).  Quite  the  opposite,  open-­‐systems  tend  to   fragment  because  they  have  an  unlimited  scope  in  which  to  develop.  So,   providing  an  open-­‐system  can  be  a  source  for  inspiration  and  innovation  but  is   less  predictable.         There  are  endless  discussions  in  journals,  books  and  blogs  about  which   system  is  the  best.  Although  it  seems  difficult  to  suggest  an  answer,  the  examples   of  Twitter  and  Apple  show  that  both  systems  can  work  depending  on  the  core   value  proposition  of  the  system.  Therefore,  it  is  important  to  define  the  core   proposition  and  then  build  the  system  platform  around  it.  Often  flexibility  is   associated  only  with  open-­‐systems,  but  in  my  opinion  is  that  that  is  wrong.  Both   systems  provide  flexibility  but  with  a  different  amount  of  accepted  impact.    

Crowdsourcing    

  Jeff  Howe  introduced  the  concept  of  ‘crowd  sourcing’  in  a  Wired  Magazine   article  called  The  Rise  of  Crowdsourcing.  (Howe,  The  Rise  of  Crowdsourcing,   2006)  It  describes  a  web-­‐based  strategic  model  for  collective  processing.  Howe   offers  the  following  description:   Simply  defined,  crowdsourcing  represents  the  act  of  a  company  or   institution  taking  a  function  once  performed  by  employees  and  outsourcing   it  to  an  undefined  (and  generally  large)  network  of  people  in  the  form  of  an   open  call.  This  can  take  the  form  of  peer-­‐production  (when  the  job  is   performed  collaboratively),  but  is  also  often  undertaken  by  sole  individuals.   The  crucial  prerequisite  is  the  use  of  the  open  call  format  and  the  large  

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network  of  potential  laborers.  (Howe,  Crowdsourcing:  A  Definition,  2006)     Since  then,  there  are  many  different  ways  that  authors  have  described  the   term  crowd  sourcing  -­‐  as  the  collection  of  quotes  in  the  article  “Towards  an   integrated  crowdsourcing  definition”  by  (Estelles-­‐Arolas  &  Gonzalez-­‐Ladron-­‐de-­‐ Guevara,  2012)  illustrates.  In  this  paper,  I  define  crowd  souring  as  a  system  that   outsources  a  task  to  an  undefined  network  of  people  in  the  form  of  an  interfacing   platform  for  communication,  giving  the  tools  and  sources  to  participate.     The  strength  of  crowd  sourcing  is  a  collective  smartness  based  on   diversity  and  expertise.  When  answers  and  solutions  are  published  and   accessible  within  the  community  future  solutions  can  build  upon  old  ones.  The   process  is  an  evolution  of  iterative  concepts  and  thoughts  influenced  by   diversity,  creating  a  holistic  view  of  the  problem.  This  compares  with  an  “expert   panel”,  a  common  technique  of  eliciting  information  within  a  user-­‐centered   design  process. “Groups  of  experts  (designers,  ergonomists,  occupational  therapists,   physiotherapists,  home  economists,  and  so  on)  are  often  used  as  a   quick  way  of  getting  an  insight  how  products  are  used  and  the   advantages  and  disadvantages  of  particular  designs.”  (Coleman,   Clarkson,  Dong,  &  Cassim,  2007)   The  difference  is  the  large  amount  of  people  participating  in  crowd   souring  project  compared  to  an  expert  panel.  According  to  James  Surowiecki  and   Lior  Zoref  ,  a  collective  of  individual  decisions  is  a  average  better  than  a  single   individual  decision.   “After  all,  think  about  what  happens  if  you  ask  a  hundred  people  to   run  a  100-­‐meter  race,  and  then  average  their  times.  The  average   time  will  not  be  better  than  the  time  of  the  fastest  runners.  It  will  be   worse.  It  will  be  a  mediocre  time.  But  ask  a  hundred  people  to   answer  a  question  or  solve  a  problem,  and  the  average  answer  will   often  be  at  least  as  good  as  the  answer  of  the  smartest  member.  With   most  things,  the  average  is  mediocrity.  With  decision-­‐making,  it’s   often  excellence.  You  could  say  it’s  as  if  we’ve  been  programmed  to   be  collectively  smart.”  (Surowiecki,  2004:  11)     Lior  Zoref  asked  his  audience  during  a  TEDTalk  to  estimate  the  weight  of   an  ox.  The  estimated  result  by  500  answers  was  1792  pounds,  three  pounds  off   the  actual  weight  of  1795  pound.  Even  though  the  lowest  guess  was  308  lbs.  and   the  highest  8000  pounds,  the  average  was  remarkably  close.  (Lillie,  2012).  Most   often,  this  collective  smartness  has  been  shown  within  one-­‐dimensional  tasks   like  judging  quantities  or  evaluating  a  set  of  choices.  (Michael,  Steyvers,  Lee,  &   Dry,  2011)  It  is  reasonable  to  assume  that  the  collective  smartness  of  crowd   sourcing  does  not  work  for  multidimensional  tasks  in  which  different  pieces  of   information  need  to  be  considered.  The  level  with  which  the  crowd  is  more   accurate  than  an  individual  depends  on  the  expertise  and  diversity  of  the   collective.  Sometimes,  large  differences  in  expertise  and  diversity  can  cause  a   task  to  be  judged  so  differently  that  there  is  no  correlated  content  for  agreement.  

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That  is,  different  knowledge  and  values  create  very  different  problem   representations.  (Cronin  &  Weingart,  2005)  On  the  other  hand,  if  diversity  and   expertise  do  not  differ  sizably,  there  is  a  risk  that  they  share  the  same  blind  spots   and  agree  too  quickly.  (Larrick,  Mannes,  &  Soll,  2011)       There  are  possibilities  of  improving  the  effectiveness  of  crowd  sourcing   for  multidimensional  tasks.  “Central  to  bridging  the  gap  is  creating  some  degree   of  shared  understanding  so  that  people  can  translate  between  their  knowledge   bases;  this  problem  is  primarily  cognitive.”  (Cronin  &  Weingart,  2005)  There  are   various  ways  to  implement  crowd  sourcing  into  a  system,  not  all  of  them  require   the  system  to  consider  the  group  dynamics  and  effectiveness  of  the  crowd.  If   crowd  sourcing  is  an  essential  part  of  your  system,  mediation  is  vital  to  capitalize   on  their  diversity  and  to  create  a  common  interface.  This  is  because  a   representational  gap  reflects  the  differences  between  team  members’  problem   definitions  and  will  ultimately  affect  the  group  problem  solving.  (Cronin  &   Weingart,  2005)     Furthermore,  a  crowd  can  produce  a  large  amount  of  noise  throughout  the   process.  (Keen,  2008)  That  noise  can  blur  the  process  and  consequently  it  needs   to  be  filtered  and  summarized.  An  in-­‐house  expert  team  of  users,  who  have   proven  themselves  to  be  able  to  mediate  and  manage  cross-­‐functional  teams,   should  be  employed  to  bridge  the  lack  of  shared  understanding  as  well  as  help   filter  and  summarize  the  process.  When  it  comes  to  gaining  and  spreading   information  through  crowd  sourcing  we  need  to  differentiate  between  active   crowd  sourcing,  whereby  the  crowd  is  consciously  participating  and  passive   crowd  sourcing.    

Active  and  passive  crowdsourcing    

  When  the  crowd  is  participating  without  their  knowledge,  I  call  it  passive   crowd  sourcing.  An  example  for  passive  crowd  sourcing  could  be  Apple’s  speech   recognition  application  Siri  for  iOS.  Siri  does  not  process  data  itself  but  transfers   it  via  Internet  to  Apple’s  big  data  center  in  Maiden,  North  Carolina.  (McMillan,   2012)  Thus,  every  user,  who  is  using  Siri  transmits  his  voice  type  and  language   to  the  data  center  where  it  could  be  used  to  improve  general  voice  recognition,   allowing  for  dialects  and  language  use.  In  this  case,  the  user  would  participate   passively  and  unconsciously  through  a  service  in  a  crowd-­‐sourced  task.  In  this   example,  the  value  encouraging  all  free  labor  comes  from  the  value  which  the   service  Siri  provides.         Threadless.com  is  an  online  store  that  sells  t-­‐shirts  designed  by  the   crowd.  Users  can  submit  their  t-­‐shirt  design,  which  are  scored  within  7  days  by   the  Threadless.com  community.  Based  on  the  scores  and  comments  of  their   users,  Threadless.com  selects  every  week  a  print  design  that  will  be  sold  in  their   online  store.  The  winning  designers  receive  2000$  in  cash  and  a  500$   Threadless.com  Gift  Certificate  amongst  other  things.  (skinnyCrop  LLC,  2012)  In   active  crowdsourcing,  the  compensation  and  value  for  the  user  is  directly  linked   to  his  participation.  Compensation  in  cash  does  not  suit  every  crowdsourcing   activity.  The  community  around  Wikipedia  is  extending,  updating  and  reviewing   the  content  for  free.  Compensation  could  be  satisfaction,  fame  or  other  benefits  

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depending  on  the  crowd  sourced  task,  system  design  and  community  in  which   the  crowd  is  participating.    

Crowdsourcing  methods       Based  upon  the  previously  discussed  system  structures,  the  amount  of   available  flexibility  and  predictability,  and  the  interfaces,  a  variety  of  systems  can   be  designed.  Dependent  on  the  core  value  proposition  of  the  system  the  variables   can  change  according  to  the  needs.  Crowd  sourcing  can  affect  and  expand  a   system  or  product  in  many  different  ways.       1.   Core  value   What  is  the  core  value  of  your  product   proposition   (Example:  sale  clothes,  simple  communication,  a   better  encyclopedia)   2.   Crowd  sourcing  

What  do  you  want  to  be  crowd  sourced?   (Example:  prints  on  prefunded  shirts,  distribution  of   the  message,  content)  

3.   System  Structure  

How  flexible  or  predictable?   (Example:  predictable,  flexible,  flexible  but  checked)  

4.   Interface  

How  do  users  interface  the  system?   (Example:  flash-­‐based  t-­‐shirt  template,  developer   platform  interfacing  database,  advanced  online  text   input  form)  

    It  can  be  used  to  improve  an  existing  product  or  service  in  a  system   (Apple  Siri);  extend  a  product  or  service  with  new  content  (Google  Maps,   Threadless.com),  grow  the  system  in  itself  in  it  means  (Twitter)  or  simply  spread   the  product  (Share  applications  on  Facebook).  In  order  to  make  any  decisions  on   the  system  design  and  the  crowd  sourcing  a  core  proposition  needs  to  be   defined,  and  that  is  the  most  essential  part  to  started  the  design  process.    

Conclusion       The  Internet  created  new  opportunities  and  it  is  still  driven  by   technological  developments.  It  enables  everything  and  everyone  to  become  part   of  the  “large  machine”  that  Kevin  Kelly  (Kelly,  2007)  described.  Looking  from   that  perspective,  the  world  has  got  smaller  and  denser.  It  is  comparable  with  a   local  market  that  is  offering  an  unlimited  amount  of  products  and  is  highly   competitive.    Unfortunately,  most  markets  are  saturated  and  innovation  is  often   incremental  rather  than  disruptive.  It  leads  me  to  the  question  “how  does  new   product  development  needs  to  change  to  benefit  from  Internet  technology  and  in   the  end  stimulate  disruptive  market  innovation”.       According  to  my  research  and  own  experience  the  problem  with  the  user-­‐ centered  design  approach,  taught  at  design  schools,  and  the  starting  point  of  

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many  design  teams,  is  the  perspective  the  team  has  during  user  research.  In  my   opinion,  they  are  too  close  to  the  user  when  researching  and  defining  the  project   scope.  Most  often,  old  product-­‐contexts  are  researched  without  questioning  the   relevance  of  the  new  product  generation,  instead  of  starting  a  conventional  user   research  based  process.  In  terms  of  disruptive  innovation,  I  find  it  more   reasonable  to  research  the  spaces  between  industries  and  reinvent  their   relationships.  Indeed,  the  Internet  makes  the  market  denser  but  at  the  same  time   enables  new  spaces  in  which  to  innovate  the  relationships  between  people,   “stuff”  and  industries.  That  offers  opportunities,  especially  for  systems  that   bridge  the  spaces  and  create  the  potential  for  new  markets.       A  holistic  view  of  the  world  and  the  understanding  of  potential  relations   between  industries  are  needed  to  spot  the  space  for  opportunities  to  reinvent  a   market  and  disrupt  an  old  market.  It  is  more  important  to  start  from  the  very   beginning  of  the  design  process,  questioning  the  existence  of  products  and   markets  in  the  era  of  the  Internet.  The  success  of  new  online  media  companies   has  shown,  that  giving  control  to  users  can  enrich  a  system  and  keep  it  up-­‐to-­‐ date  simply  because  customers  can  actually  change  the  meaning  of  the  product   according  to  their  demands,  whereas  the  user-­‐centered  design  process  often   ends  up  designing  an  “experience  destination”.  Design  in  the  era  of  the  Internet   is  about  designing  the  infrastructure  for  crowd  sourced  product-­‐value  rather   than  developing  an  unchangeable  end-­‐product.  Design  thereby  becomes  a   strategy  to  guide  and  support  users  to  do  the  actual  design  work.  The  difficulty  is   not  to  get  the  right  size  or  color  of  a  button  but  how  the  system  is  interfacing  and   engaging  user  groups  and  their  needs.       Yet,  further  research  needs  to  be  done  to  develop  the  actual  design  tools   that  help  a  design  team  frame  the  research  and  create  a  system  design.  In  my   dissertation,  I  pinpointed  the  variety  of  possibilities  and  relationships  which  the   Internet  offers.  These  are  touching  points  and  building  blocks  that  have  to  be   assembled  correctly  according  to  the  core  value  proposition  of  the  system.   Furthermore,  another  aspect  that  needs  future  investigation  is  the  design   process  in  general.  Due  to  the  tremendous  pace  of  changes  in  the  different   industries  and  their  markets,  the  concept  of  a  flexible  design  process  needs  to  be   developed  in  order  to  handle  the  changing  vicissitudes  of  markets.  The  first  step   could  be  to  look  at  an  overlaying  design  process.  A  process  in  which  single  design   stages  are  running  parallel  to  each  other,  rather  than  following  linearly  on  from   each  other  and  being  divided  by  gateways.      

 

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http://blog.ted.com/2012/02/29/of-­‐oxes-­‐and-­‐the-­‐wisdom-­‐of-­‐crowds-­‐lior-­‐ zoref-­‐at-­‐ted2012/   Nokia.  (2009,  01  19).  Nokia  Conversations:  the  official  Nokia  blog.  Retrieved  09   20,  2012,  from  History  of  Nokia  part  one:  Nokia  firsts  -­‐  Nokia  Conversations:  the   official  Nokia  blog:  http://conversations.nokia.com/2009/01/19/history-­‐of-­‐ nokia-­‐part-­‐one-­‐nokia-­‐firsts/   MacCormack,  A.,  Verganti,  R.,  &  Iansiti,  M.  (2010).  Developing  Products  on   “Internet  Time”:  The  Anatomy  of  a  Flexible  Development  Process  .  Management   Science  ,  133-­‐150.   McMillan,  R.  (2012,  05  24).  IBM  worries  iPhone's  Siri  has  loose  lips.  Retrieved  10   23,  2012,  from  CNN.com:   http://edition.cnn.com/2012/05/23/tech/mobile/ibm-­‐siri-­‐ban/index.html   Michael,  S.,  Steyvers,  M.,  Lee,  M.  D.,  &  Dry,  M.  J.  (2011,  06  21).  The  Wisdom  of  the   Crowd  in  Combinatorial  Problems.  Cognitive  Science,  A  Multidisiplinary  Journal  .   Schroeder,  S.  (2012,  09  05).  Social  Media  News  and  Web  Tips  -­‐  Mashable  -­‐  The   Social  Media  Guide.  Retrieved  09  19,  2012,  from  Android  Increases  U.S.  Market   Share  to  52  Percent  [REPORT]:  http://mashable.com/2012/09/05/android-­‐52-­‐ percent/     Sherr,  I.,  &  Totty,  M.  (2011,  11  15).  Is  It  Better  for  Businesses  to  Adopt  Open  or   Closed  Platforms?  The  Wall  Street  Journal  .   skinnyCrop  LLC.  (2012).  Submit  a  design,  earn  $2,500  !!  Retrieved  10  24,  2012,   from  Threadless  graphic  t-­‐shirt  designs:  cool  &  funny  t-­‐shirts  weekly!  Tees   designed  by  the  community.:  http://www.threadless.com/submit   Starbucks  Corporation.  (2010).  My  Starbucks  Idea.  Retrieved  09  19,  2012,  from   My  Starbucks  Idea:  http://mystarbucksidea.force.com/ideaHome    

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How Do Relations Influence Design in the Era of the Internet