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Sourcing, Filtering, and Evaluating New Product Ideas: An Empirical Exploration of the Performance of Idea Markets

Authors

  • Arina Soukhoroukova,

  • Martin Spann,

  • Bernd Skiera


  • We thank Gary Lilien, Arvind Rangaswamy, Gerrit van Bruggen, the participants of AMA's 2007 Annual Advanced Research Techniques Forum (A/R/T Forum) in Santa Fe, as well as seminar participants at Penn State University, University of Maryland, University of North Carolina at Chapel Hill, University of Passau, Goethe-University, and University of Texas at Austin for their valuable feedback. We also acknowledge support from the German Science Foundation (DFG) and the E-Finance Lab Frankfurt am Main. We are especially thankful to Rüdiger Kühnle for his support at Carl Zeiss. The authors contributed equally to the paper.

Address correspondence to: Martin Spann, Munich School of Management, Ludwig-Maximilians-University (LMU), Geschwister-Scholl-Platz 1, 80539 München, Germany. E-mail: spann@spann.de. Tel: +49 (89) 2180-72050.

Abstract

The proliferation of interconnectivity and interactivity through Internet-based technologies enables new forms of support for new product development. This paper analyzes idea markets, which use widely distributed knowledge, the power of markets, and the Internet to support the crucial initial tasks of the new product development process, including the sourcing, filtering, and evaluation of new product ideas. Idea markets employ virtual stocks to represent new product ideas and allow participants to suggest and trade new product ideas in a virtual marketplace. This paper empirically explores the performance of idea markets in a real-world field study at a large, high-tech business-to-business company that includes more than 500 participants from 17 countries and features various idea sourcing tasks. The results indicate that idea markets are a feasible and promising method to support the fuzzy front end of the new product development process. Idea markets offer a platform and formal process to capture, select, and distribute ideas in an organization, which motivates employees to communicate their ideas to management. By effectively sourcing and contemporaneously filtering, idea markets help reduce the number of ideas brought to management's attention to those that seem worthy of further consideration. Because idea markets also have the ability to source many ideas, they can increase efficiency at the fuzzy front end of the new product development process.

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