Lego has turned its most loyal users into designers and co-creators of their own products. The toy manufacturer providing a building system based on interlocking bricks patented in 1958 begun to run into difficulties in the late 1990s. Lego's product development had become increasingly complex with many product ranges and at one stage Lego had 11000 contractors -more suppliers than Boeing used to build its airplanes. At the same time a change in customer behavior from building models to computer games together with low cost competition made the company increasingly losing money and market share. With a new CEO and the injection of turnaround funding, the company rationalized its supply chain and factory location, reduced the number of unique pieces, in-licensed the rights to use characters from blockbuster movies and developed new ways of working with users as designers as part of the new product development process. The latter is what has made Lego famous in business model innovation (even though the in-licensing has proven to be the main revenue generator). An early product involving users, launched in 2000, was Lego Mosaic, which allowed users to upload photographs to Lego's website. The company would digitize the picture and calculate the bricks required to build the mosaic. In 2005 Lego launched Lego Factory where users can design, share and purchase custom models. The user downloads a virtual building program to design 3-D models with virtual bricks and elements and depending on the creation, a price is dictated by the size and elements used. A community of builders shares their virtual creations, more than 30000 kits uploaded so far, and download the building instructions to build from their existing Lego collection or purchase someone else's model for themselves. In parallel to the sharing platforms Lego launched its MIndstorms Robotic Invention System (RIS) product, aimed at competing with computer games. MIndstorms is a sophisticated kit with a programmable brick, various sensors and actuators to build models that can carry out various movements. One of the key limitations of the original Mindstorms was the complexity of the programming language and Lego discovered that users were hacking the software and developing applications and extension to the original code. Within weeks of the original Mindstorms’ debut, a user had reverse engineered the system and posted all of his findings including information on the underlying firmware, online. Lego concluded that limiting creativity was contrary to its mission or encouraging exploration and ingenuity, and rather than sending out cease and desist letters, Lego decided to write a "right to hack" into the software license. More than 40 guidebooks providing step-by-step strategies were developed by external users and hardware developers designed sensors far more sophisticated than the included ones. When Lego later developed the next generation Mindstorms (NXT), key developers driven by interest and involvement were recruited into a Mindstorms user panel in exchange for Lego sets and NXT prototypes.
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