In our service design practice, we triangulate the trends of business, technology and society to predict for our clients where things might be in one, three or five years. (Okay, five years is a very long time.) So we’re always gratified when those predictions come true and here’s one we’ve been talking about for years: car monitoring to reduce insurance rates.

In effect, would you make a deal with your car insurance company that you promise not to go over the speed limit, in exchange for a 10% decrease? How about 15 or 20%? In order to prove that, would you be willing to let the insurance company install a small device on your vehicle that tracked your speed? Maybe you get one or two chances, but then the third time you speed - bing - you lose the discount.

Well, that future is here. Progressive Insurance has announced the My Rate Program, which provides a small device that plugs into your car’s on board computer. The device tracks things like when and how you drive your car including acceleration, hard braking, etc. and then sends that data back to Progressive wirelessly. (The system is not based on GPS, so it’s not tracking where you go but still, we can imagine that in a future generation.)

Let’s take this one step further: How about a deal where you promise your life insurance company not to text or talk on the phone while driving, in exchange for a very big discount? After all, that behavior has shown to increase the likelihood of accidents by a factor of four. After an accident, it would be a simple matter for the insurance company to compare the time of airbag deployment with your cell phone bill to determine if you kept your promise. If not, no health care for you or no death benefits for your loved ones. Would you take that deal?

There is a saying that “everything in life is a trade-off,” and with advances in technology these types of automated trade-offs will start to permeate our relationships with service providers and impact pricing options. Watch for these trends in everything from insurance to mortgages to TV and shopping. It’s one thing to have privacy taken away from you, but it’s quite another thing to trade it for cash. So what’s your “break-point,” at which you would give up details of your private life in exchange for a discount? 10%, 30%, 80%? Everything’s negotiable.

On my recent trip to the Consumer Electronics Show in Las Vegas, my eye caught the logo of company exhibiting in a small booth. There were about four people there, with stacks of small boxes all around the booth. How could I not stop and ask what a company called “Quirky” did?

Turns out, they have a very innovative business model for product design and development. On their website, they have created a community for designers/thinkers/makers who collaborate with the stated goal of creating a brand new consumer product every WEEK. Everyone who participates gets a piece of the revenue of the launched product, with the inventor or idea catalyst getting the lion’s share, while others who provide feedback, comments, etc. get a relative portion, based on their feedback.

Once everything is locked down on the design side, the product goes on pre-sale on the website to assure that tooling costs are covered. Once a certain threshold of sales is hit, then the product actually goes into production and revenues start to get distributed. Since launching last summer, the site has 6 products that have cleared the threshold with another 17 in line waiting. A very clever idea indeed, creating a collaborative space for inventors who up to now, usually labor/suffer as individuals.

Could this idea be applied to service design as well? Sure (and probably is in various forms on the Web) but it’s much more difficult, since service ideas and concepts are much more “portable” and easy to launch than the logistics involved in actually creating manufacturing molds, tools, packaging, shipping, etc. Still, a great model of innovative thinking. Here’s a quick video…