Social media and innovation

Recently, vitaminwater has been advertising a new “flavorcreator” Facebook app, which allows consumers to develop the next great vitaminwater. In addition to voting for the next flavor, consumers can also determine the vitamins and create the new label. Over 500,000 fans have participated, and the new vitaminwater will launch in early 2010.

People often ask me about the implications of social media to innovation. My multi-part answer is:

1) It’s really too early to describe “best practices”. There are many interesting books on social media, but the pace of change on this topic is, in my opinion, far too quick to codify in a book. For example, are there any books that were published in 2008 that predicted the impact Twitter would have on us in 2009? Blogs and Linkedin are as big as ever, but are companies still investing in Second Life storefronts?

2) The implications vary greatly by industry. The vitaminwater example demonstrates the potential of Facebook for Gen-Y oriented consumer products industries. But does the same thinking truly apply toward health care or financial services companies that face greater regulatory constraints? In the end, I believe that some social media technologies are more relevant to some industries and certain usage cases than others.

3) Some interesting things are happening in crowdsourcing. Basically a form of open innovation, crowdsourcing is a very interesting way to leverage social media, and vitaminwater’s Facebook app is just one example. Increasingly, Peer Insight is working with companies to leverage crowdsourcing (and prediction markets) as a means of fostering more effective field research, ideation, and concept testing.