Steven Johnson’s cover article in this month’s Time Magazine has a great insight:

“more significant [than the question whether Twitter sells to Google is] the fact that many of its core features and applications have been developed by people who are not on the Twitter payroll….This is not just a matter of people finding a new use for a tool designed to do something else. In Twitter’s case, the users have been redesigning the tool itself…. It’s like inventing a toaster oven and then looking around a year later and seeing that your customers have of their own accord figured out a way to turn it into a microwave.”

Johnson has honed in on one of the most striking and exciting things that is happening on the web today — user powered innovation.

Even if only in retrospect, I now realize this is an important theme running across many of Polaris’s consumer web investments over the last few years.

For starters, nowhere is the user community a more central force for product innovation than with WordPress, where literally thousands of users/third party developers provide a rich ecosystem of plug-ins, ad-ons and extensions, and gather in popular confabs called “Wordcamps” around the globe.

Sproutbuilder is all about bringing the power of flash development to the consumers of flash content.

And, only recently emerging from stealth, LOLApps provides tools that allow Facebook users to create their own customized apps.

Notwithstanding the economic stormclouds still hovering out there, I have never been more convinced than now that the web’s radical empowerment of users is ushering an unprecedented wave of innovation.