The Cost Of Early Adoption

First Kid on the Block The Cost of Early Adoption т W Th F Sa Su X X X X X X X With the rapid change in technology, knowing when to purchase a truly innovative product is becoming increasingly more difficult. With promises of changing our lives or saving time and money, more often than not, the initial release doesn't live up to these expectations - at least not right away. However, many of us wait in long lines to be the first adopters, understanding that we most likely will pay more and have to deal with problems. Even with these known hurdles, being an early adopter does have its benefits. Who Are the Early Adopters? The Breakdown Early Adopters is a term coined by Everett Rogers to refer to early customers of any given company, product, or technology. Innovators: People creating and pulling the change. Rogers' Innovation Adoption Curve Early Adopters: Opinion leaders who test out the new ideas. 40% 34% 34% 30% Early Majority: Cautious but rapid adopters. 20% 16% 13% Late Majority: Skeptics who only use the idea or product when 10% the majority starts to use it. 2.5% Laggards: Traditionalists who are wary and critical of new innovations. Innovators Laggards Early Majority Late Majority Early Adopters According to Rogers study, “The Diffusion of Innovations," at 13%, Early Adopters make up only a small portion of any population so Mainstream Adopters (68%) are the ones who determine whether an innovation is successful. What Attracts Early Adopters to a New Service or Technology? Exclusivity If it's one thing early adopters enjoy, it's the feeling that they're exclusively a part of something cutting-edge. Many startups infuse this idea into their business models by having an invitation-only phase for beta users. Digital V.I.P. When Facebook began in 2004, it was positioned as a private social network for Harvard University students. Half of the g+ university's undergraduate populace joined in less than a month. This year, Google launched its own answer to Facebook with Google+, which reached 10 million users just two weeks after debuting as an invite-only limited trial. Co-creation Since early adopters essentially are the first guinea pigs, they are eager to drive decision making and help shape the service or prod- uct into what it will ultimately become. Privilege Not only will companies reward early adopters with a firsthand look at the product, they may also offer referral bonuses or badges to encourage viral growth of the product or service. ★★★★ Mayor of Early Adoption Town Foursquare taps into game mechanics by giving out badges and mayorships to users who use the app Expert Rank For many early adopters, joining a service before it hits the mainstream, allows them to learn the product and position themselves as experts. frequently. The earlier members join, the greater the potential rewards. The Risks of Adopting Early 24 R.I.P. Buggy Expensive Obsolete Early versions of products Less expensive versions Technology may not become the typically have bugs or usually appear after standard. For example, early adopters malfunction. the initial release. of HD DVD discs now have a great set of coasters. A Well Known Adoption Story - Apple's iPhone We all remember the images of Apple's most loyal customer waiting in line, sometimes for days, for the new iPhone. But was it worth it? Judging by the dramatic price drop in the first 8 months alone, waiting to adopt may have been the best idea if price was a consideration. $599 iPhone 2G 8GB $499 iPhone 2G iPhone 26 Steve Jobs: 16GB $399 4GB "There is always change $299 and improvement... iPhone 3G iPhone 3GS 32GB iPhone 4 16GB 32GB $199 This is life in the iPhone 3G iPhone 3GS 16GB iPhone 4 8GB 16GB $99 technology lane." iPhone 3GS 8GB 2007 2008 2009 2010 ( Early Adoption) Sources: Rogers, E. M. (1962). Diffusion of innovations. New York: Free Press. SOCIALCAST ValueBasedManagement.com // Apple.com // Newstatesman.com Mashable.com // NewYorkTimes.com // BusinessDictionary.com © 2011 SOCIALCAST INC. ALL OTHER TRADEMARKS HEREIN ARE RECOGNIZED TO BE THE PROPERTY OF THER RESPECTIVE OWNERS.