13 June 2006

Putting the customer in charge [CNN/Business 2.0]

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Every company claims it listens to feedback from customers. But some startups are turning their customers’ ideas into the basis of their business.

At the online T-shirt emporium Threadless, shoppers suggest, rate, and buy T-shirt designs from other users. Online retailer Etsy provides a platform for users sell their handicrafts on its website, and lets customers vote on which products should be featured on its homepage. And electronics maker Slim Devices plans to let customers sell their own open-source software and even add-on accessories for its digital music gear.

By definition, these companies are selling precisely what consumers want. “It’s the open-source software concept applied to product marketing,” says Georg von Krogh, a professor of management at Switzerland’s University of St. Gallen.

But where open-source programmers donate code for fame rather than fortune, these companies often reward customers with cash for contributing ideas.

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