The ability of user communities to self-organize and develop valuable innovations is well known. There are many cases, however, when the goals of user innovation communities are actually fundamentally opposed to that of manufacturers. While this phenomenon happens across a range of innovation communities, it is especially true in the case of complex, proprietary systems, where user innovators have no regard for the closed architectures upon which manufacturers have built their businesses. Instead, driven by community praise and intellectual satisfaction, or, occasionally, anger, these user innovation communities explore within the manufacturers’ systems, bypassing technical and legal safeguards to do so. Known by different names across different industries – hackers, phreakers, crackers, and many others – these innovation communities have a complex relationship with the companies whose systems they modify. These sorts of communities, here called “underground innovation communities,” can develop innovations that undermine company business models and can lead to destructive open conflict between firm and community, just as it can lead to cooperation.
Industry complaints about piracy and theft are common, but countermeasures, whether legal or technical, often seem counterproductive, leaving open the question of how best to discourage negative community activities. Some industries and firms have progressed further in their attempts at discouraging unwanted innovation and have successfully harnessed negative communities to significant effect. Computer game companies, for example, have successfully co-opted large segments of the previously rebellious innovation community attached to their industry. The community now develops product extensions for free, while discouraging unwanted software piracy. Similarly, companies such as TiVo have managed to gain user acceptance over rivals by channeling or morphing potentially negative innovators into acceptable “unofficial” discussion boards and non-destructive innovation. And other firms are even harnessing these sorts of user innovation communities as important sources of highly qualified potential employees.
You can read some of my work on covert communities, from the phreakers of the 1960s to the hackers of today, the most comprehensive of which is my master’s thesis: Innovations from the Underground, but also my articles in the Sloan Management Review and the ACM.
Also, check out Textfiles.com, which gives a wonderful slice of the the writings of these communities.