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The Diffusion of Innovation – What it is and where it began.

For the purposes of my discussion, I use the work of Everett Rogers as the starting point in the codification of the study of innovation stating with his first edition published in 1962 (Diffusion of Innovation, Everett Rogers).

To be historically accurate, Joe M. Bohlen and George M. Beal in 1957 at Iowa State are credited as the first to describe the theory of the technology adoption lifecycle (TALC) as a sociological model, with its purpose to track the purchase patterns of hybrid seed corn by farmers.

Rogers’ points out in his 4th edition (1995) at the time of his first edition there were already 405 publications about the topic. Rogers significantly broaden the model and is recognized as the seminal thought leader in diffusion theory. His 4th edition is worth the read albeit I warn you in advance, it is a text book written with academy in mind.

Rogers’ book has a wealth of concepts that I hope to present to you over the lifespan of my blog, but for this series I will focus on a couple of salient points that evolved from his work. First Rogers wasn’t necessarily talking about technology diffusion per se, though as we will see later, technology diffusion has become a prime focus of diffusion theory.

But rather diffusion is the broader study of how communities respond to discontinuous innovations. Discontinuous innovations can be ‘ideas” or new products or services requiring the end user and the marketplace to dramatically change their past behavior with the promise of gaining equally dramatic new benefits.

Diffusion theory can be graphically explained using the now familiar S shaped diffusion curve which is nothing more than the accumulated number of adopters plotted over time. When plotted over time on a frequency basis, the also familiar bell-shaped curve results, thus the same adoption data can be represented by either curve, but most often the bell curve is used in describing the adoption life cycle.

As described by Rogers “The S-shaped adopter distribution rises slowly at first when there are few adopters in each time period. It then accelerates to a maximum until half of the individuals in the system have adopted. Then the S-curve increases at a gradually slower rate as fewer and fewer remaining individuals adopt the innovation.”

Rogers goes on to explain “This S-shaped curve is normal. Why? The reasoning rest on the role of information and uncertainty reduction in the diffusion process.”

The S-shaped curve takes off once interpersonal networks become activated in spreading subjective evaluations of an innovation from peer to peer in a social system. The part of the diffusion curve from about 10% to 20% adoption is the heart of the diffusion process. After that point, it is often impossible to stop the further diffusion of a new idea, even if one wished to do so.

The S-curve begins to level off after half the individuals in a social system have adopted, because each new adopter finds it increasingly difficult to tell the new ideas to a peer who has not yet adopted, for such non-knowers become increasingly scarce.

Now switching to the bell curve to better explain and categorize the process and players in the adoption distribution. As explained by Geoffrey Moore in his book “Inside the Tornado,” (more on Moore shortly – sorry, I couldn’t resist that line ): When a market is confronted with an opportunity to switch to a new paradigm, say typewriters to word processors, customers self-segregate along an axis of risk aversion:

• Risk immune innovators movng to the forefront • Risk allergic laggards retreat to the rear of the line (quills still firmly in hand)

In between these two ends are: • Early Adopters • Early Majority • Late Majority

Looking at the diffusion bell curve we can see that each of the segments in the bell curve represent a standard deviation from the norm. Where the early majority and late majority are defined within 1 standard deviation, the early adopters and laggards are 2 deviations and the innovators are 3 deviations from the norm.

The Characteristics of Each Segment: The five adopter categories set forth by Rogers and later extended by Moore, are ideal types. Ideal types are conceptualizations based on observations of reality that are designed to make comparisons possible. Exceptions to the ideal types can be found. If no exceptions or deviations existed, ideal types would not be necessary. With that said, the dominant characteristics and values of each adopter category can be generalized as follows:

Innovators = Technology enthusiast • Desire to explore • Committed to new technology —- sooner or later technology will improve our life’s • Pleasure in mastering its intricacies • But they don’t have money! • But they do have influence —- get it into the hands of the innovators

Early adapters = Visionaries – • Desire to exploit • The true revolutionaries • First Real money • But they demand special modifications no one else would dream using —- Overtaxing R&D; resources of fledging enterprises

Early majority = Pragmatist • Evolution not revolution • Bulk of all technology infrastructure purchases • Adopt only after proven track record of useful productivity improvement • Strong references from people they trust • Prefer to buy from the market leader

Late majority = Conservatives • Pessimistic about ability to gain value from new technology • Undertake technology only “under-duress” —- remaining alternative is to let the world pass them by • Price sensitive • Simplify and commoditize systems to a point where they just work

Laggards = Skeptics • The gadflies of high tech

80’s market strategy based on the TALC

So knowing that diffusion is a social network process, and armed with the characteristics of the categories of each of the five segments, one should easily be able to drive diffusion by simply following these steps:

• Seed product to the technology enthusiast so they can help educate the visionaries • Turn visionaries by whatever it takes into satisfied customers so they can serve a good references to the pragmatists • Gain the bulk of your revenue by serving the pragmatists —- become the market leader —- Set the defacto standards • Leverage pragmatist to generate sufficient volume and experience • Product becomes reliable and cheap enough to meet the needs of the conservative • Skip the skeptics – leave them to their own devices

Simple enough just follow the steps and presto! You have a winning new product introduction and you’re on your way to fame and fortune. If life were so simple, but the real world doesn’t quite work this way. In my next blog I will describe what Geoff Moore calls the Chasm – a discontinuation of adoption between the early adopters and the early majority.

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