Co.Design

3 Reasons Why Co-Making Is The Future Of Branding

The explosive success of the Taco bell Doritos Locos Taco shows that it's time for brands to collaborate to create real breakthroughs.

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.

Consumer Love = High Margins

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.

Snowflake Status

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.”

Outside Inspiration

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.

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5 Comments

  • Good read Devin. These constant patent wars do seem ridiculous. Yet I wonder without all these patents, if corporations would have the incentives to invest as much money as they currently do into innovation? Less patent control may mean less profit which would probably mean less incentive to take chances on more risky ventures.

  • Derek: I think that is a super valid point. Patents are definitely important when it comes to rewarding innovators for their efforts. My concern is that the focus on patents creates some unintended side effects when it comes to a brand's posture toward collaboration. We need patents to protect breakthrough innovation. But we need collaborations to create breakthrough innovation. So I think there is an emerging tension there.

  • Hip Hop has been the master of this. Lots to learn from those guys.

    I thought this was going to be about the process Nismo did for the creation of their IDx.

  • Barry: I LOVE the hip hop comparison. In fact, so many of the examples I gave could be put into the "featuring" language from hip hop. The new FuelBand, featuring Apple. Taco Bell featuring Doritos. Fiat featuring Gucci. And what's also great about your comparison is that hip hop is hardly short on ego and unique expressions of individuality. One of the objections I sometimes hear is that co-making collaborations could "dilute" a brand. Hip hop shows it's the opposite! To be a great collaborator, you have to know exactly what you bring to the table.