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The importance of user innovation is widely accepted, but the development of the Internet of Things is primarily driven by large commercial players. Using an innovation perspective, this paper identifies how user innovation and market-based innovation can be combined in the Internet of Things (IoT). A survey of tools for user/developers in the IoT space uncovers a rich set of tools for creation of hardware, software and data but reveals poor support for distribution and sharing of such artifacts. To address this shortcoming we propose connected marketplaces as a way to provide users/developers with rich opportunities for sharing and trading of artifacts, and to enable effective user innovation in the IoT.