There are numerous definitions and meanings associated with this term. For example, "Mass Customization toolkit" is normally used synonymously with "configurator", whereas "toolkit for user innovation" refers to more sophisticated systems with an expanded range of possibilities and hence an even higher level of user involvement.

Toolkits for user Innovation

Sticky information and its transfer via toolkits

Innovative products often fail because the voice of the customer is not sufficiently heard during the product development process. It follows that one of the most crucial success factors in product development is effectively fulfilling customer requirements and translating these into actual product features. (Urban and Hauser 1993) Responding to this challenge, toolkits for user innovation comprise methods for integrating customer input into the product development process and optimizing the interface between manufacturer and customer.

Consider how many companies still design products the traditional way, in spite of the opportunities provided by new technologies. After trying to predict potential customers' needs with market surveys, a design is developed. It then takes several - sometimes hundreds - of tests and modifications before the final product can be produced. Nevertheless, there is no certainty whether customers will accept the product or not (see figure 1).

In other words, the traditional product development process often turns out to be unsatisfying (expensive, time consuming and error-prone) because it is difficult and hence costly to transfer information from consumers to companies - the information is 'sticky': “The stickiness of a given unit of information in a given instance is defined as the incremental expenditure required to transfer it to a specified locus in a form useable by a given information seeker. When this cost is low, information stickiness is low, when it is high, stickiness is high.” (von Hippel and Katz 2002, p. 822)

In the case of product development, sticky information needed by developers is generated by product manufacturer and product users alike. A manufacturer will generally posess information regarding solution possibilities and production processes, while users have information about their needs and the context within which products might be used. (von Hippel 1994, von Hippel 2001, von Hippel and Katz 2002)

Capitalizing on new communication and information technologies, toolkits for user innovation and design offer dramatic new capabilities for rapid and inexpensive customer and manufacturer input at all stages of the product development process. Specifically, they reduce the stickiness of information and hence its transfer costs by repartitioning product development into subtasks requiring information either from users or manufacturers, and allowing both to take part in the design of the product.

Subtasks involving sticky solution information are assigned to the manufacturer, while those involving sticky need information are assigned to users. Once this has happened and appropriate assistance is given, manufacturers and users alike can begin to act as problem solvers, and the development of products can proceed more rapidly and effectively. (von Hippel 2001, von Hippel and Katz 2002)

"To understand why this is so, consider that the development of a new product proceeds via an iterative process of trial and error. User- or manufacturer-based designers begin by designing what they think they want; then they test the initial solution, find drawbacks, and try again. This iterative process is sometimes called “learning by doing’”.” (von Hippel and Katz 2002, p. 823) But the need to shift the problem back and forth between users and the manufacturer during the trial and error can eliminated once the tasks have been subdivided, so that the sticky information required to solve them and the problem solvers are collocated. Iterative learning by doing is still carried out, but the trial-and-error cycles for each subtask are carried out entirely by a user or manufacturer. (von Hippel and Katz 2002)

Since toolkits enable users to create a unique product that fits their individual needs, the toolkit approach seems to be the ideal product development method for all product types characterized by heterogeneous user demands (Franke and von Hippel 2003). Online-toolkits in particular can help satisfy these heterogeneous user needs by providing the gateway to a mass customization production process. Highly personalized products can then be built to order on a mass scale and at mass production efficiency, although manufacturing takes place only if and when there is an order from a customer (Tseng and Jiao 2001).