Lego Minecraft: A Lesson in CrowdsourcinG

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Crowdsourcing is not just for new entrants challenging established players; the latter can also leverage crowdsourcing to their advantage, enabling users to design new products and testing the demand at the same time.

And for the younger generation, this is simply a normal way of doing things. That’s the key lesson I learned this morning my friend's son explain the genesis of his Lego Minecraft set.

Agility

Lego is not exactly a start-up. With its $1bn annual revenue for the first time in more than half a century of selling plastic bricks, it has become a mammoth of the toy industry, but a nimble mammoth, one that seems quite able to adapt to the climate change of product design in the age of crowdsourcing. After testing the concept for three years in Japan, Lego has recently gone global with the beta-version of its Cuusoo crowdsourcing platform.

Transparency

The rules of the game are simple: any user can submit a product design, which other users will be able to vote for. When a submission racks up 10,000 votes it gets a formal stage-gate review and – unless legal flaws or other showstoppers are identified – it gets into production. The ideator receives a 1% royalty on the net revenue. It is too early to say how many voted-for submissions will fail the internal stage-gate review, but if Lego manages to provide clear feedback about submissions that fail, it will maintain the transparency of the scheme, which is essential to keeping the user base engaged.

Efficiency

Meanwhile, Lego enjoys unprecedented benefits from this crowdsourced product development process:

1. A wider community for the ideation phase, which will inevitably turn up many more ideas than Lego’s own designers, however talented, could do. In classic crowdsourcing fashion, the Shinkai 6500 submarine – the first project that… emerged through this process - saw the Lego amateur designers reach out to the marine life scientific community for advice.

2. A mind-blowingly cost-efficient development phase, whereby unsuccessful projects cost nothing to Lego and projects that go into production attract a very modest and fully variabilised 1% cost.

3. A virtually free pre-launch campaign through the voting phase that creates a buzz among the fan base (and probably well beyond the registered users as the 90-9-1 theory of online communities suggests) and provides a clear metric on what the fan base wants to buy.

Back to the Future

What I found most striking as I listened to the 10-year old's story of how Lego Minecraft came to be, is how natural it all feels to him. In Organization’s Culture terminology, user-led crowdsourced design is now ‘how we do things around here’. This may not be new, as the 200-year old story of the steam-engine user-led improvement shows, but it will soon become mainstream. Ignore it at your peril!

Posted on Innovation Excellence Site by Yann Cramer