Not just trendwatching.com observed it, also Wired magazine dives fully into this trend with their special report titled “Free! Why $0.00 Is the Future of Business“. While the report at trendwatching.com is full of examples, this article in Wired analyzes a few case studies with more detail.

Thanks to Gillette, the idea that you can make money by giving something away is no longer radical. But until recently, practically everything “free” was really just the result of what economists would call a cross-subsidy: You’d get one thing free if you bought another, or you’d get a product free only if you paid for a service.

Over the past decade, however, a different sort of free has emerged. The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast. It’s as if the price of steel had dropped so close to zero that King Gillette could give away both razor and blade, and make his money on something else entirely. (Shaving cream?)

Wired also included an analysis of the countless business models leveraging the priceless economy and came up with six broad categories:

Freemium: What’s free: Web software and services, some content. Free to whom: users of the basic version.

Advertising: What’s free: content, services, software, and more. Free to whom: everyone.

Cross-subsidies: What’s free: any product that entices you to pay for something else. Free to whom: everyone willing to pay eventually, one way or another.

Zero marginal cost: What’s free: things that can be distributed without an appreciable cost to anyone. Free to whom: everyone.

Labor exchange: What’s free: Web sites and services. Free to whom: all users, since the act of using these sites and services actually creates something of value.

Gift economy: What’s free: the whole enchilada, be it open source software or user-generated content. Free to whom: everyone.

Read the full article here.

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BusinessWeek Magazine writes about the story behind Lenovo’s new superslim Thinkpad X300 notebook that also fits into one of those interoffice mail envelopes you have seen at the last MacWorld when Steve Jobs presented the MacBook Air.

 

"Phyllis! Get me one of those interoffice mail envelopes!"

It was just after lunchtime on Jan. 15, and Peter Hortensius was storming through the cubicles at Lenovo Group’s offices in Morrisville, N.C., shouting for his secretary. Hortensius, senior vice-president in charge of laptops, had just heard that Apple CEO Steve Jobs had unveiled the supersvelte, aluminum-clad MacBook Air by declaring it the "world’s thinnest notebook" and dramatically pulling it out of an interoffice envelope. Lenovo’s ThinkPad X300 notebook was due out in February, after a year and a half in development, and Hortensius was alarmed that it could be upstaged before it even made its debut.

His secretary, Phyllis Arrington-McGee, ransacked filing cabinets until she found one of the envelopes. She handed it to Hortensius, who gingerly slipped the X300 inside. "It fits! It fits!" he shouted.

 

Why do I blog this? Another good examples that great products might get killed by steering committees and review boards. To bring a great product to market it takes an individual who will pursue his vision no matter what a steering committee decides.

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The Design Management Institute offers an interesting article titled "Innovation, Growth, and Getting to Where You Want to Go" written by Ryan Jacoby and Diego Rodriguez, two Business Factor Consultants from IDEO.

Design thinking is a crucial business asset—one that can, indeed, move a company forward and improve the bottom line. To optimize this impact, Ryan Jacoby and Diego Rodriguez advise thoughtfully structuring the innovation process. They stress working on projects that improve people’s lives, and they present a “ways to grow”model that helps managers direct and assess innovation efforts.

 

The have also included a nice chart detailing their understanding of potential innovation outcomes and the impact on organic growth.

Organic growth can emerge from every quadrant of Ways to Grow. Use this tool to a) identify the type of growth you intend to create, b) to recognize the scope of that challenge and deploy an appropriate innovation process, and c) to assess your portfolio of innovation efforts.

A few more key messages of the article:

You must uncover human needs to design compelling user value propositions.

In order to deliver on the value proposition, will we—or could we—use technologies that are new to our organization or to the people who will use them?

Download the full article.

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Nokia OpenStudio is a project by Nokia Design which is based on the concept of exploratory design research. The Nokia Open Studio took place in three communities in India, Africa and South America where Nokia together with local teams staged an event to gather design ideas for mobile phones that match the lifestyle of people in their environment.

Nokia designed entry forms and provided writing equipment so that local people are able to write down their ideas and participate in the contest. Additionally the teams performed interviews how the design of their mobile phones actually relates to the people’s life.

At the end an award ceremony was organized and the winners were awarded. The most promising  ideas were an intuitive and instant weather forecast, a solution for creating awareness of the environmental problems as well as a four Simcard holder.

This is a good example of how to identify latent user requirements especially when you are dealing with customers that have a totally different cultural and environmental context.

 

Here is the speech from Younghee Jung

 

For more scientific information about this you can read more about sticky information in a paper written by Eric von Hippel titled "Sticky Information" and the Locus of Problem Solving: Implications for Innovation.

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FORA, the Danish Authority for Enterprise and Construction’s Division for Research and Analysis, has published the study “Concept Design – How to solve complex challenges of our time” which focuses on how design can be utilised together with other disciplines to create new solutions to the global challenges faced by public and private sectors.

Companies are shifting from asking themselves how products should be designed, how they should be produced and how they should be marketed to asking more fundamental questions such as what should the company focus on or what problems should the company’s innovations solve. Concept design is the discipline of creating concepts that provide answers to these questions and solutions for the identified problems.

The study provides an analysis of Danish companies offering concept design services as well as an overview of other international concept design firms. Dinesh Godburdhun, Senior Team Lead at Gravity Tank shares his view about this new industry:

“I think that what this new industry has in common is that there are complex problems out there. And clients don’t know who they should call to get them solved. Normally they would call their advertising agency, market researcher, design house or what have you, and today a lot of these people are handed complex problems by clients because it’s not quite clear who should be doing them.”

All in all an interesting study, and if you ever wanted to catch a glimpse into the offices of concept designers, check out the pictures included in the study.

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