Adoption Curve (Diffusion of Innovation)

Rafat Abushaban

- Business #  O 3.9K views   اقرأ بالعربية

Summary:The Adoption Curve "Diffusion of Innovation" represents how different customers react to new innovative technological products and services

The "Diffusion of Innovation" or "Technology Adoption Curve" is a market-focused curve that breaks down customer groups into different categories to help understand the overall market. The curve consists of five main customer groups:

Diffusion of Innovation curve


Innovators


Innovators are technology enthusiasts, who are interested in new and cutting-edge technologies and want to be the first to try new products and services. Innovators usually have a high buying power.

A good example for this is backers for early-stage development crowdfunding campaign as funders want access to such new technologies before others. Another example is influencers such as You-tubers who try new gadgets and equipment. Such people can directly affect public opinion.

Innovators forms around 2.5% of the curve.

Early adopters


Early adopters are the ones who first get the product or service after its initiation and review by the innovators. They adopt new technologies early on, and like to be  'early in the game'. Like innovators, adopters are trend followers, but they await the advice and recommendation of the innovators.

This group is particular of interest to entrepreneurs as they form the main caveat or flipping point in the adoption curve. Once a critical mass has formed of this group, the product can develop a snow-ball effect that leads to the next group of majority. Thus, it is important to nurture this group carefully as it could make or break it for the product.

 Early adopters form around 10% of the curve.

Early majority


Forming a significant (30-40)% of the target market, early adopters represent the first majority to adopt a new innovation. They take a varying time to follow and adopt after the early adopters, but once the chasm has passed (more on this below) the early majority represent the first actual partition of the mass market, and the first sizable market for a business. Here, the business transforms from selling to niches towards selling to the masses.

Late majority


Also forming (30-40)% of the target market, late majority follows the early majority group to adopt the innovation, but they prefer to wait until it is mature and tested. They are a group of customers more reluctant to change and prefer to stick with what they know, but are open to innovations when proven useful.

The late majority represent the second half of the majority (mass) market, after which mostly everyone in the target audience will have engaged the products or services of the business. What remains is only the laggards group.

Laggards


Laggards are the last group to join the market. this group is very skeptical to change and are only open to innovation when they are forced by their friends or community to use it. Laggards represent about (10-16)% of the market.

Laggards come at the end of the curve, and come as an alert that the market demand for the particular product or service offer has depleted and went towards other newer products and services. Businesses here should take benefit of this group financially, but also start planning for their next innovation.

Diffusion of Innovation chasm


The Chasm?


A take on this model by author Geoffrey Moore in his book "Crossing the Chasm" suggests that there is a chasm between the 2nd group (early adopters) and the 3rd group (early majority). The author suggests that falling into this chasm is the reason why many innovations don't take off or succeed in the market. This theory advises that if an innovation is to become widespread and gain real success, it must cross this chasm to reach the masses of the early majority, while innovators and early adopters move away to follow the next big trend.

Therefore, crossing the chasm as a terminology specifies how startups should plan early on to bridge the gap between the adopters and the majority by working closely with the adopters and collecting feedback and continually improve their service offering aiming to avoid the fall in the chasm.