If you are reading this, you are probably an "early adopter" or an "early majority pragmatist", definitely not a laggard. While not as common as some types of classification, these categories are widely used in the technology businesses. Indeed, most companies now make at least some use of TAM, the Technology Adoption Model, pioneered by Professor Everett Rogers in Diffusion of Innovations, an important book first published in 1962.
The point about TAM is that not everybody adopts a technology at once. When Philips and Sony launched CD audio discs in 1982, for example, hardly anybody bought them. Most people probably didn't even know they existed. However, what used to be high-priced, high-technology players are now routinely fitted to hi-fi's and portable audio systems. Many people carry small, cheap versions around in the same way that an earlier generation carried around a Walkman cassette player. They also appear in computers, games consoles, clock-radios and cars.
TAM provides a model that describes how a new technology can be adopted and diffused through society over a period of time. The process starts with innovators and enthusiasts, who like to play with things. This sort of person is adventurous enough to buy a CD player to find out how it works. Sales are small.
The next group to take up an innovation are the early adopters, who buy things for their benefits - or at least, their own perception of them. They were willing to pay high prices for CD players even when there weren't many discs to play. The fact that they had already bought Elcassettes, 8-track tapes, laser-disc video players, quadraphonic systems and other market failures did not put them off. Sales are still small, but could be about to take off.
Success comes when the "early majority" buyers arrive. These are knowledgeable and practical people who don't really want to waste their money on products with little or no future - which, as it happens, is most of them. They watch what the early adopters are buying, and take their pick of the plums while avoiding the turkeys. If you can sell to this group then you have achieved success, because they make up about a third of the market. "Early majority" buyers are decision makers. They make technologies into market standards.
The next third of the market is made up of "late majority" buyers. They don't worry too much about the technicalities, but they want something cheap, safe and standard. They are sceptics who don't buy promises. They want proven products from large companies that offer lots of support. When an innovation gets through to the "late majority" buyer, it has reached the mass market.
Finally there are the laggards, who are often traditionalists (if not simply poor). Who needs a CD player? In the old days, people sat around the piano and made their own music. Laggards may buy technology products without realising it. For example, if a wristwatch has hands, they may not notice if it has an oscillating crystal inside rather than clockwork. At the extreme are the Amish, who reject modern technology altogether.
One of the interesting implications of this approach is that innovation is not the ultimate "success factor," and it probably doesn't matter much if you are the "first mover," or the tenth or the hundredth. What matters is whether or not you are the first to reach the "early majority" buyer. Being "first mover" certainly gets you a first throw at the dartboard, but the average innovator couldn't hit the side of a barn.
Many products are re-invented several times before someone comes up with something that hits the target. For example, Go Corporation, founded in 1987, was the first company to try to commercialise pen-operated handheld computers, but failed to make any impact on the market. Apple thought its size, image and tremendous marketing skills would lead to success but its product, the Newton Messagepad, was ridiculed. Many other companies tried their hands at the format, including Active Book Corp, Amstrad, Casio, Kyocera and Sharp. The successful Palm Pilot, however, was not introduced until 1996.
Being "innovative" and being "first mover" didn't help Go at all. Its real problem was that it was too far ahead of the technology price/performance curve. If it had started a decade later, it might have taken over the market.
In the personal computer business, the "first mover" was, arguably, MITS with the Altair, launched in 1975. It certainly appealed to geeks and technofreaks. Commodore, Apple and Tandy followed with machines aimed at consumers, in 1977, and IBM set the standard with the IBM PC launched in 1981. Who won the market? Michael Dell.
Dell was just a kid when the innovators and early adopters were arguing about first mover advantages. He founded Dell Computer Corp in 1984, when he was a 19 year old student, and it is now well on the way to becoming a $60bn corporation.
The model also provides some insight into the perennial technology problem of ease of use. The problem is that the only people who care about ease of use are the late majority buyers, and by the time they arrive, it's all over.
The innovators and early adopters don't care: they expect things to be hard, and solving problems is half the fun. For serious business buyers, problems are the price you pay for trying to leapfrog the competition. The early majority care, but not a lot. They are practical people and first of all they want features and performance. Capability is essential, whereas ease of use is just a bonus. As long as the benefits are bigger than the aggravations, they are willing to learn.
The "late majority" buyers are the ones who want everything on a plate, but even so, they take a balanced view. They are not obsessive about ease of use, or any other single factor except, perhaps, market standards. Also, for these buyers, "ease of use" is much broader concept than it is for the average one-dimensional geek. It includes factors far beyond the narrow operational ones, such as the easy availability of products on the high street. In other words, the "late majority" buys "the whole product," which is a much more extensive concept than "the product".
As mentioned in this column before, "the whole product" does not consist of a simple device, such as a CD player, or a computer. It includes both the product and the vast array of supporting products and services that make it useful. In the computer market, it includes hardware features such as flexibility and expandability, the availability of software, peripherals, training and maintenance, and adherence to standards, among other things.
Importantly, "the whole product" includes "the future product", or people's reasonable expectations thereof. For example, in the 1980s, someone could have argued that LPs were a better whole product than CDs because there was more music available on vinyl, and it was cheaper. However, buyers could still decide that CD offered a better whole product if they expected vinyl records to become obsolete and/or more expensive, while CDs would become cheaper and take over the market.
In Silicon Valley, the concept of "the whole product" drives many corporate marketing strategies -- at least in theory. That is thanks mainly to the popularity of two ground-breaking books, Crossing the Chasm and Inside the Tornado, by technology consultant Geoffrey Moore.
The problem for technology companies is that they launch hundreds of products that are only bought by small numbers of people: the innovators and early adopters. If you just looked at the Technology Adoption Model, you might assume there was a natural evolution from these early adopters to the mass market, but as a matter of common observation, very few products make it. Moore posited that there was, in fact, some sort of chasm between the two. So the real question is: how do you cross the chasm?
Moore was also familiar with the whole product concept, which provides a model to describe how consumers behave. They don't buy technologies in a vacuum, they buy products that satisfy their needs, whether that is to listen to Bach or play a Super Mario game. It is therefore possible for a product to remain physically the same while "the whole product" changes dramatically.
At launch, for example, a CD player could cost $1,000 and only have 50 titles available. A couple of years later, the same player could cost $250 and have 5,000 titles available, with many more on the way. Only early adopters would buy the launch product, but early majority buyers could well buy the "later" (albeit identical) CD player because it is a much better "whole product".
So Moore's answer to how you get your product across the chasm is that you turn it into a "whole product" that meets the needs of a defined group of buyers. For example, it would be impossible to launch a new computer platform with 100,000 applications to meet every need, but you could get a foothold with one or two good desktop publishing programs and a laser printer. It was well before Moore's day, and Apple didn't intend to do this, of course, but desktop publishing saved the Mac after it flopped on its initial launch.
As all these market factors have become much more widely known over the past two decades, suppliers have tried to compress the TAM life-cycle by getting to "the whole product" as quickly as possible. It is no longer enough to launch a product and see if it sinks or swims. Today, for example, it's not unusual to see a raft of magazines appear to support a new games console before it has even been launched, and software houses start talking about the games they are developing long before that.
It is understandable, but sad to say, it leads to markets that are built mainly on hype, and prone to collapse when the arrival or real products evokes not excitement but disillusionment. It's a fair bet that your first encounter with a Wap or 3G phone was not wild excitement but: "Oh, is that it?"
