Two guys come up with product idea – a “kickstand” for the iPhone than can be used to add value to the product. But to manufacture the “Glif“  they need to raise $10,000 to make the plastic injection moldings. So they turn to a fundraising website, Kickstarter to “pre-sell” the product, hoping to get 500 people to pledge $20 to buy one. (If they don’t raise the $10,000 commitment, then people who pledged don’t have to pay their $20.) Their fundraising period just ended; they raised $137,417 from 5,273 people. The Economist has just published a great story about this experience.

Our three takeaways from this story:
1 – The iPhone is a whole economic eco-system until itself.
2 – Anything can always be made better thru good design.
3 – Create value and money will follow.

Kickstarter – as a web service – is a great example of service design facilitating product design.

The App Store for the iPod has been getting a lot of attention, but another intriguing aspect of the iPhone has gone relatively unnoticed. During the recent preview of the iPhone 3.0, Apple announced that they would be opening up the 30-pin connector at the base of the device for third-party hardware accessories (and software apps that can take advantage the inter-connect).

This is a big deal. Why? Because now, this “device” can talk to other “devices.” Imagine all types of input or output devices, from blood pressure or glucose monitors, to breathalyzers, to biometric or security devices. This list goes on and on, for both consumers apps as well as very focused B2B applications. The great thing is that Apple already has an installed base of 30 million devices with a very powerful (and ever-growing) developer base with over 25,000 applications deployed to date.

Hardware and software, products and services. The lines are blurring more and more – all requiring more refined service design.

Ethan Nicholas, developer of a tank artillery game called iShoot, told Wired.com he quit his job the day his app rose to No. 1 in the App Store, earning him $37,000 in a single day.

Until recently, there has been no realistic way for individual programmers to make serious money on their own. Most of the software market is dominated by big companies, and the traditional distribution method for independent developers — shareware — isn’t conducive to striking it rich. By contrast, Apple’s iTunes App Store provides a platform for marketing, selling and distributing software; all a developer needs to provide is a good idea and some working code. It wasn’t easy for Nicholas, either. After getting off his shift as an engineer at Sun Microsystems, he worked on iShoot eight hours a day, cradling his 1-year-old son in one hand and coding with the other. He didn’t have the money to buy books to learn how to write an iPhone app, so he taught himself by reading websites.

When iShoot launched in October, business was slow for a while. And then Nicholas found some spare time to code a free version of the app — iShoot Lite, which he released January. Here’s how that helped: Inside iShoot Lite he advertised the $3, full version of iShoot. Users downloaded the free version 2.4 million times. And that led 320,000 satisfied iShoot Lite players to pay for iShoot. The game soared to the No. 1 spot — and it stayed there for 26 days.

Full story here.