User contribution in consumer electronics?  In hardware?

User contribution in consumer electronics?  In hardware?  That's what Pure Digital, the maker of the Flip Video camcorder, has done with a new system that enables buyers to design their camcorder to have any graphic look they desire...or to use the looks contributed by others.

Description of user contribution system

Apple gives iPod customers the ability to express themselves with a choice of 7 colors.  Why limit customers to just the colors the company offers?  Why not let them express themselves with any color, any image, any graphic design they create?  And let them benefit from the designs contributed by others.  Or so thought Jonathan Kaplan, the founder and CEO of Pure Digital, when he created the system called Designable.  

Here's the Designable section the the Flip Video site.  The breadth of contribution is best shown on the site of Pure Digital's partner, CafePress, which aggregates over 8,000 contributed designs.  Many designs support non-profits as Pure Digital gives the creator (or its cause) a slice whenever one of the creator's designs is purchased.

Full disclosure:  Scott Cook is an investor in Pure Digital.  

History of Pure Digital

First launched 2 1/2 years ago (May 2006) the Flip now captures about 25% of the US camcorder market by units.  Several big name rivals like Sony, Kodak, RCA have attacked Flip directly with clone products and gotten no traction.  How could a startup win big in a market crowded by the best of the Asian consumer electronics giants?

The story of Pure Digital and its founder/CEO Jonathan Kaplan displays several practices common to entrepreneurial successes.

• Disruption.  Pure Digital focused on what Clay Christensen calls "New Market Disruption" or attacking non-consumption, by targeting the people and situations where people were not shooting video.
• Single-minded focus on the problem.  The Flip targets the capturing and sharing of home videos of people, typically shot indoors and close to the subjects.  By focusing single-mindedly on that problem Pure Digital made design decisions and tradeoffs that the incumbents did not.  The result delivers superior low light performance, convenient one button operation, super easy deletion of bad shots, small size (~ a deck of cards), easy software for sharing via email or YouTube...advantages not found in found in any more expensive camcorder.  This was achieved by leaving out expense and complexity incumbents presumed were needed including optical zoom, image stabilization, removable recording media, multiple recording modes.
• Easy and goof-proof user experience in the hands of typical users.
• Iterate and be unafraid to change.  Pure Digital started in a different business with a different business model:  single-use still cameras sold in major chains like CVS.  A good business but nothing near the explosive growth of the Flip.
• Fast pace of innovation development:  In the past 6 months Pure Digital has shipped 5 new product initiatives:  Mino which shrunk the form factor by 50%, Designable to deliver products that are massively "right-for-me", a user contribution system for Designable designs, a software redesign, and HD quality video.  All from a company with about 100 employees.
• And now a user contribution system.

Scale

This year Flip Video camcorders will capture about 25% of the US market for camcorders, by units.  No data yet on the popularity of the Designable option or its design contribution system, though CafePress shows over 8,000 designs contributed since Designable was launched in the fall of 2008.

More resources

• Wikipedia article on Flip Video

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