In a time when five indie films take all five Oscar nominations, the question is, can we get that kind of quality if we provide support for the indie developer?  In a customer-led economy, the answer is a resounding yes.

One Minneapolis group that’s taken the lead is University UNITED, a group of 12 progressive community organizations + businesspeople that want a vibrant, urban, pedestrian-oriented, transit-oriented district along St. Paul University Avenue, seeking investment in places like the mixed-use building pictured above. They understand that the kind of development they prefer will come from smaller, indie developers and investors, and thus sought $120,000 from the Minneapolis Foundation to provide them with a competitive advantage - the U-Plan Community Planning Studio.

The do-it-yourself themed center hosts computers equipped with Geographic Information Systems (GIS) mapping, AutoCad and SketchUp architectural graphics and visioning/design software, a large format color printer that can generate maps, professional staff proficient in GIS mapping and architectural design - all for free - IF you can prove your project will raise the bar for design and quality of life in the neighborhood.

More here.

Yesterday in Part 1, we looked at the different models of a what is fast becoming a standard feauture in anything we buy - customer-led services, products and yes, buildings and neighborhoods. However, just to show you how quickly this is all evolving, Trendwatching provides a summary of the next step - getting paid for it - and they even have their own term (albeit a bit trite):

“Generation C(ontent) is joining Generation C(ash). If consumers produce the content, if they are the content, and that content brings in money for aggregating brands, then revenue and profit-sharing is going to be one of 2007’s main themes in the online space. It’s not like brands will have a choice: talented consumers are going to be too sought after to remain satisfied with thank you notes. Get ready for an avalanche of revenue sharing deals, reward schemes and sumptuous gifts aimed at luring creative consumers.”� Some examples:

- Intel and Netflix offer $1 million to help them come up with new products and services respectively.
- No less than seven (see Generation Cash article) video-hosting services (like YouTube) reward you with $ the more they’re viewed. One of these days we’ll set up such a system for the cool places that you live in or visit (see image).

Now, how does this apply to co-designing and developing cool places in your city as part of the CoolTown beta community program?
- $10,000 reward for referring a developer to investment capital
- 10% price reduction on homes that you co-design, since you’re saving the developer marketing, realtor, inventory, marketing analysis and market uncertainty/risk costs.
- Lead a local beta community as part of the development team and earn about $20,000-$60,000 per 20-50 units of housing built via the customer-led model.

You’re hearing more and more how customers are participating in the decision-making behind what they’re buying. Here’s a summary of terms used to describe this customer-led economy, with real-world examples and how it will help shape our communities for the better:

Customer-Led - The most generic description encompassing the entire field, also referred to as customer-driven or customer made. This website has an entire collection of entries on this topic here.

Mass Customization - The business definition - the industry term for the ‘how to’ behind the customer-led economy, such as Dell’s and Mini Cooper’s computer-aided manufacturing systems to produce custom output.

Co-Design - Well-documented in the newly published book Outside Innovation: How Your Customers Will Co-Design Your Company’s Future and accompanying “>blog by industry expert Patricia Seybold. This generally involves customizing a product just the way you want it. Examples include Nike ID, Levi’s and Scion.

Crowdsourcing - Mass volunteer participation and self-organization to create new products and services, like Wikipedia, YouTube, Flickr and now CrowdSpirit.  More details in a previous entry.

Open Source Development - Originating as a response to proprietary software, the open source code is freely available to the public for use and/or modification, typically created as a collaborative effort in which programmers improve upon the code and share the changes within the community.

Beta Community - How all this applies to building better places to live, work and play.  A beta community is a ‘cooltown-oriented’ community of future tenants that have a formal partnership with a development entity to build out their collective vision. Check out how to establish one here, and an example here.

The beta community is well underway in Louisville, KY, allowing future tenants to co-design and co-develop a key downtown block.

However, sometimes it’s easier to explain this customer-led, co-design, crowdsourcing at a much smaller scale, which is what CrowdSpirit does for us.  The basic concept is straightforward, as defined in their image above (excluding the urban village elevation, developed by Urban+West+Strategies). The goal is to co-design and manufacture any electronic product under $190 that the collective crowdspirit community feels should be made, but currently isn’t.

So what’s the CoolTown version of CrowdSpirit?  We’ll partner with a local representative (is that you?) in your community to establish a beta community to do the same, except that we’ll also partner with a forward-thinking developer instead of an electronics manufacturer. In addition, we’ll reward $10,000 to people who identify such a developer that is able to take advantage of at least $5 million in equity capital from a $150 million fund dedicated to investing in cool towns.

As Ghandi taught us, “We must be the change we wish to see in the world.“

Continuing yesterday’s entry… The Last Stand of the 6-Percenters - that’s the NY Times story that’s got home buyers excited and realtors needing to rethink their business model.  The current system awards 3% to the seller’s agent, and 3% to the buyer’s agent.  Louisville is pioneering a better model with its beta community.

“Traditional agents spend very little time brokering a deal. Most of their time is consumed looking for new clients, which is of no benefit to consumers,“ states a Berkeley professor who studies real estate commissions. Referring to the current realtor-controlled system, “It’s a thousand tiny shackles on innovation,”� says the chief executive of Redfin, an online realty service that offers 2/3 of the buyer agent’s fee (3%) back to the buyer, and replaces seller agents (3%) with a flat fee of $2000 to list in the MLS.  In the book, Freakonomics, realtors are even compared to… well, let’s just say cults - more here.  The Times article further states that realtors don’t even make that much given the amount of work and sacrifice (weekends) they put in.

Thus, enter the beta community model: No buyers agents. No listing agents. No fees.  You get to participate in the development of your home and the building it’s in.  The developer provides those savings to you, oftentimes as a 10% pre-sales discount.  Marketing costs for developers are instead directed over to establishing the beta community, which also reduces risk and inventory - or as Dell likes to call it, having negative inventory and negative working capital.

Image: This is the phase (design and planning) where resident-driven attainable home buying should begin.

Automakers build fully-working computer models of the cars they’re about to build, and the same applies for thousands of the products we buy.  The social networking phenomenon is growing like crazy, with MySpace alone at 68 million members.  At the same time, we’re delving deeply into a customer-driven economy.  It’s only a matter of time before the three intersect, and we’re already seeing a preview among the 10-20 million people actively participating in creating their own online worlds.

The result?  Rather than try to understand two-dimensionally and in words just what kind of communities the emerging generation of home buyers, workers and shoppers prefer, take a trip into the online world of Second Life and see for yourself.  In an alternate virtual world to our physical one, people buy virtual land and develop buildings, host events and form social groups, even selling virtual items and charging admission.

In fact, practically speaking, here’s what the progressive developers and cities should do to attract the creative class:  Build several virtual versions of their projects, even neighborhoods, and present them in any one of these online worlds (read up on Trendwatching.com’s Youniversal Branding), and allow people to not only comment or create their own versions, but to buy units in the virtual buildings that serve as reservations in the real buildings should they be built.  It’ll happen.

As mentioned yesterday, we are fully immersed in a customer-driven economy, and those investing in cities and neighborhoods must participate to prosper.

Trendwatching provides the most current “definition: “The phenomenon of corporations creating goods, services and experiences in close cooperation with experienced and creative consumers, tapping into their intellectual capital, and in exchange giving them a direct say in (and rewarding them for) what actually gets produced, manufactured, developed, designed, serviced, or processed.”�

Here are some companies that are associating themselves with customer-feedback programs to design their next generation of products and services:  Honda with their Civic, Nokia with cellphones, Microsoft and Apple with their operating systems, and Starwood Hotels with an ‘agent’ at FlyerTalk.com - if hotels can participate, so can real estate investors. Meanwhile, Lego allows you to design your own product online, and NY State Assemblyman Jimmy Meng even has a ‘Make Your Own Law’ contest with the winner’s proposal to be introduced as a bill.

If companies are afraid of being so publicly close to what their customers really think of them, they can hire intermediaries to do this privately, such as Nielsen’s Buzzmetrics and Bzz Agent, covered here two years ago.

Or they can wait for customers to do it for them, like why Verizon had to start buying domains like verizonsucks.com before others did.

We have an entire thread of related articles under the category Mass Customization.

There are two million people who know sign language (not necessarily deaf), and there is a visionary development group in South Dakota that believes 2500 of them will move to a new town designed specifically for them, by them.

While it’s not exactly a cooltown, it does follow the principles of new urbanism; walkable, mixed-use, a diversity of housing types, front porches and alleys, live/works and a town center.

What is entirely significant about this community is that it’s customer-made, also known as mass customized, and to be designed as a beta community - the underlying nature of a cooltown.

Some of the benefits of such a customer-driven place?  They get to collectively do whatever they want, and for instance, that means building the ‘world’s first integrated ASL public school system, serving both hearing, deaf and CODA children’, among hundreds of other unique design features like signage and video phones.  Why they’re seeking McD’s and Subway as their first commercial tenants is beyond my scope, I doubt the beta-community-to-be would come to that conclusion.

Btw, it’s a sign-oriented community - so you can move there if you want to learn, like being around signers, or perhaps prefer a quieter place to live?

g src=“/images/customermade.jpg” align=left alt=“West Campus, Arizona State University”
We all have opinions on how we’d improve the places we live, work and play in, but rarely see that influence our surrounding built environment.  Well, if this customer-made trend continues to evolve, we won’t have to wait much longer.

Customer-made (as defined by Trendwatching.com): the phenomenon of corporations creating goods, services and experiences in close cooperation with consumers, tapping into their intellectual capital, and in exchange giving them a direct say in what actually gets produced, manufactured, developed, designed, serviced, or processed.

Find out via the links above how Boeing, Fluevog, Nike and Mini Cooper have set up ‘open source communities’ like Linux to create next generation products and services.  There’s even a company that helps companies create such communities, Bzz Agent...

... and yes, we’re developing our beta community model to do just that for neighborhoods and districts.

Comment/post questions below…

If there’s more variety and choice, will people purchase less or more?

One thing’s for sure, according to a University of Pennsylvania study, “If there is a perception of increased variety, people eat more,”� says Barbara Kahn, vice dean and director of the university’s vaunted Wharton Business School Undergraduate Division and expert in consumer choice and brand loyalty.  They even conducted a study with jelly beans to further substantiate their claims.  More choice = more consumption, and it doesn’t have to be measured in just calories.

Does this help explain why the most prolific, active town centers are ones with mainly independent businesses?  Maybe why economist Richard Florida found the most diverse cities are also the most economically successful?  Why the variety of choice in cities is more appealing than the monotony of suburbia, and why condos (associated with cities) are now more valued than single-family homes?

I’d venture to say yes.

What’s your opinion?  Comment/post questions below.