Eleven of the most notable technology brands in the world–Apple, Google, Microsoft, Samsung, Intel, Cisco, HP, Oracle, SAP, Dell, and Adobe–together filed more then 15,000 patents in 2012 alone. Developing and protecting intellectual property is important, but all this patent filing reveals an entrenched posture among technology companies that can be summarized in a word: mine! This is a problem. Because the way we’re currently thinking about technologies is in direct conflict with how we think about brands. Technologies might belong to companies (because a team of lawyers says they do), but brands belong to people. And the people don’t want more patents. They want products, services, and experiences they can’t get anywhere else. This is harder and harder to do in our crowded marketplaces, so more and more brands are collaborating to create real breakthroughs. Co-making is on the rise, and it’s a very good thing for brands and their audiences.
Consider these examples: the Taco Bell Doritos Locos Taco, the most successful product launch in Taco Bell history, moved 100 million units in its first 10 weeks and has already sold more than a billion units. Even before Taco Bell and the Doritos folks at Frito Lay teamed up to create a stoner’s dream, Apple and Nike collaborated to create Nike+, which is now nothing less than the world’s largest running club. And Fiat and Gucci created a winning combination with their collaboration, the Fiat 500 by Gucci. Importantly, these examples are not about co-branding, which has traditionally been about marketing synergies–logo co-placement, sponsorships, and licensing. These are examples of co-making, brands teaming up to make-versus just market–the actual product, service, or experience. And there are three very good reasons why we’ll see more of these kinds of product development relationships in the near future.
The Doritos Locos Taco earns a 40% premium compared to Taco Bell’s regular taco. The Fiat 500 by Gucci sells briskly at a 52% markup over the base price of a standard Fiat 500. Online preorders for the original Nike+ Fuelband sold out in minutes, and Nike’s equipment division reported an 18% increase in profits for the fiscal year following the product’s introduction. These are impressive numbers for what are essentially a taco, an iOS-powered pedometer, and a very small Italian car. Margins like this used to be the exclusive domain of technology companies, so imagine what premiums technology companies will be able to command with even more groundbreaking collaborations.
The best brands are always striving for “only” status–a marketplace position that has no perceived substitute. But such a position is mostly mythological. Why? Because any category worth being in features capable competitors. Apple, currently the most powerful brand in the world, is hardly free of rivals. But co-making presents an opportunity to turn the myth of the “only” into a reality. Simply put, co-making creates something that otherwise could not exist, something that would not be possible without the contributions of two different brands. The number of potential brand pairings is essentially infinite, with the results of each pairing entirely unique. That’s a very real “only.”
The juiciest design and business opportunities in front of us simply cannot be solved with this-technology-is-all-mine thinking. Brands are often representative of core expertise, and tackling our world’s most formidable innovation challenges–from sustainability and security to transportation and health care–will obviously require more than a single expertise. We need our best technology brands to stop fussing about patents and start teaming up to tackle the impossible. Teaming up also infuses companies with new ideas and worldviews that are too often missing in our insular, us-against-them corporate cultures. Co-making is a fast way to get inspired, take on bigger stuff, learn new skills, and break new ground.
It’s time. It’s time for Google and American Express to design a smarter credit card, one that syncs with location-based technologies to score the best deals while also making fraud impossible. It’s time for Xbox and Virgin to re-imagine in-flight entertainment, and extend that experience across both air travel and hotel stays. It’s time for iRobot and Honda to finally cut to the chase with driverless cars. It’s time for HP and The Home Depot to 3-D print any nut, bolt, screw, or washer we may need. It’s time for Cisco and Honeywell and Samsung to visualize data from in-home water, gas, and electrical systems so we can cut our utility bills right from the couch. It’s time for all kinds of breakthroughs. Tacos with Doritos shells are just the start.