Competing with friends: Community-based innovation contests at Threadless & Local Motors
Benedikt Langner, Victor P. Seidel · Academy of Management Proceedings · 2013
Firms pursuing an open innovation strategy have increasingly turned to individuals as sources of new ideas. Two main approaches are often highlighted. First, firms can use innovation contests, where individuals submit ideas in competition for a prize reward. Second, firms can use firm- hosted online communities, drawing from collaborative efforts of individuals with more intrinsic motivations to participate. A hybrid approach, where firms establish community-based innovation contests, has been less studied. Given the apparent contradiction of norms between competition and community, what is the function of the community in these innovation contests, where individuals are “competing with friends”? We conducted extensive field work and over 90 interviews at two firms running community-based innovation contests, Threadless and Local Motors, complementing mainly quantitative research on contests. Drawing from detailed accounts of competitors, we empirically derive six functions of the community in improving and sustaining innovation contests. We also describe the challenges of this model of open innovation, and we highlight the conditions under which it is likely to be most valuable to firms. Our study has implications for understanding how competition and community, rather than being antithetical, can be reinforcing for certain approaches to open innovation.