Creating and Evaluating New Product Ideas with Idea Markets: Working Paper

The creation and evaluation of new product ideas are crucial initial tasks in the new product development process. Three factors influence the quality of the output of these two tasks positively: (1) a large number of ideas and idea creators involved, (2) group decisions instead of individual decisions, and (3) methods that combine the creation of ideas with their evaluation. Idea-markets help combine these three factors. They use virtual stocks to represent new product ideas, let participants trade those stocks in a virtual marketplace, and use the efficiency of market-based aggregation and the resulting stock prices as indicators for the likely success of various new product ideas. Therefore, we propose the concept of idea markets as a new method to create and evaluate new product ideas. We describe the methodology of idea markets and discuss their scope for designs. We present the results of a real-world intranet-based idea market in a large, high-tech B2B company. We empirically assess the feasibility of idea markets for creating and evaluating new product ideas, analyze the quality of the idea market's ability to create and evaluate new product ideas, compare the evaluations of an idea market with those of experts, and outline the participant’s as well as the top-management's evaluations of the overall performance of the idea market. Our results indicate that idea markets are a promising new method to support the new product development process