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Management article
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Reference no. SMR46406
Authors: Ethan Mollick
Published by: MIT Sloan School of Management
Published in: "MIT Sloan Management Review", 2005
Length: 6 pages

Abstract

Many complicated, proprietary systems attract a community of underground innovators who explore and alter them — and not always in ways that manufacturers appreciate. These individuals have little regard for the business models that companies have carefully devised to profit from those systems. Instead, they are driven by utility, curiosity and occasionally even anger, bypassing technical and legal safeguards in their drive to explore. Called by different names — hackers, phreakers, crackers and modders, among them — these underground innovators have complex and often antagonistic relationships with the companies whose products they modify. Indeed, in many cases the underground innovation triggers a war between the community and the company. But if handled properly, it also can lead to cooperation between the two parties, potentially resulting in new business models and novel products. To achieve that, though, companies first need to understand how underground communities operate. Underground groups typically contain two distinct classes: elites and kiddies. ‘Elite’ is a term reserved for those who truly innovate — the wizards who understand the inner workings of a proprietary system and are able to make it do things never intended by its developers. ‘Kiddie’ is short for ‘script kiddie’, signifying someone who does not truly understand a system but merely uses tools created by the elites to exploit the system in some way. Most companies make the mistake of treating elites and kiddies the same way, often alienating those who might make positive contributions. A more effective approach is to nurture the constructive elites, rewarding and even supplying them with tools to encourage their efforts, all while deploying more aggressive means to thwart the destructive kiddies.

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Abstract

Many complicated, proprietary systems attract a community of underground innovators who explore and alter them — and not always in ways that manufacturers appreciate. These individuals have little regard for the business models that companies have carefully devised to profit from those systems. Instead, they are driven by utility, curiosity and occasionally even anger, bypassing technical and legal safeguards in their drive to explore. Called by different names — hackers, phreakers, crackers and modders, among them — these underground innovators have complex and often antagonistic relationships with the companies whose products they modify. Indeed, in many cases the underground innovation triggers a war between the community and the company. But if handled properly, it also can lead to cooperation between the two parties, potentially resulting in new business models and novel products. To achieve that, though, companies first need to understand how underground communities operate. Underground groups typically contain two distinct classes: elites and kiddies. ‘Elite’ is a term reserved for those who truly innovate — the wizards who understand the inner workings of a proprietary system and are able to make it do things never intended by its developers. ‘Kiddie’ is short for ‘script kiddie’, signifying someone who does not truly understand a system but merely uses tools created by the elites to exploit the system in some way. Most companies make the mistake of treating elites and kiddies the same way, often alienating those who might make positive contributions. A more effective approach is to nurture the constructive elites, rewarding and even supplying them with tools to encourage their efforts, all while deploying more aggressive means to thwart the destructive kiddies.

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