What percentage of people are covered by the early adopters in the technology adoption graph?

Fundamentals of B2B Product Management Series: Part 3

In my previous post I talked about what research has found about the drivers of product adoption. In this post, I'll cover the complementary topic of the Adoption Curve. I would guess that maybe 80% of readers have seen this curve because it's a staple in marketing and new product development. What the Adoption Curve captures is that markets adopt products non-linearly. Penetration of a new product starts slowly, then accelerates until about half the market has adopted, then decelerates to an eventual snail's pace. This is not a theory. As you can see below, most 20th Century consumer products exhibited this adoption behavior. (Although, you can clearly see how new product adoption was derailed by the Great Depression.)

Source: The Atlantic "The 100-Year March of Technology in 1 Graph"

Stages of Adoption

So why does product adoption exhibit such a regular pattern? The reason is that adopting new products is fundamentally a social process. And like any social process it operates through the connections in our social network. "Hot New Things" tend to start out at the edge of our social networks with Innovators, slowly spread to well connected Early Adopters, rapidly cascade from Early Adopters to their connections (the Early Majority) and then more slowly spread to the next tier of connections (the Late Majority). By now, they've become Cold Old Things, flushing out among poorly connected Laggards. This process, in normal social network topologies, produces a Normal Curve of adoption over time: the mirror of which is the S-curve of cumulative market penetration. Each stage of adoption (and adopters) has its own characteristics and it's worth diving into them in some detail.

Stage 1: The Innovators

Innovators are interested in "Hot New Things". Innovators are well connected to other Innovators but not well connected to the rest of the population of Early Adopters and Majority. And because they're always enthusiastic about their latest Hot New Thing discovery, the Majority of the world tends to tune them out. Innovators have fewer connections to the rest of the mainstream social graph - so new Innovations are only slowly transmitted from Innovators to Early Adopters. If you're introducing a new product category, it will be mostly Innovators using your stuff first (afterall they're defined as being most receptive to new stuff) - but it's equally important to understand a few things about them.

1. Innovators are often only your customers for a short time window. Don't be surprised when they move on to the next Hot New Thing next year. Also, don't be surprised when they start trash talking the old Hot New Thing (your thing!) when they move on. A good sign of an Innovator is someone who says "We tried X, and it was great, but now we're really into Y".
2. Innovators are often poor reference customers because they can't articulate how your product added value or solved a core business problem. They're just not looking at your stuff that way. "It was new so we tried it - but we might try something else next year". But that's ok - reference customers don't matter all that much to Early Adopters as we'll see.
3. B2B Innovators are often well known as such. In the tech infrastructure market, for example, companies like Disney, Aetna and Morgan Stanley will try almost every new technology that comes along. The fact that Disney uses your stuff is not persuasive to a Majority company.

Stage 2: The Early Adopters

The Early Adopters are where markets are made or broken. Early Adopters are the respected gatekeepers for new Innovations. If an Early Adopter can prove to themselves that your product is valuable, then they'll tell others in the Early Majority, who will put heavy weight on that opinion. Early Adopters have the spare social capital and the resources to take the financial and social risk that your product won't work for them. Early Adoptors will often quantify an innovation's benefit or at least have a process or tool by which they assess success or failure. They're the show-me people. They only believe what their own experience tells them. You can help them to structure and accelerate their evaluation, but they won't take your word for it (or anyone else's).

Stage 3: The Early Majority

If Innovators care about what's NEW and Early Adopters care about PROVEN VALUE, then the Early Majority cares about what's POPULAR. The Early Majority are well connected to the Early Adopters and rapidly follow them when they see something that works. They don't have the same appetite or ability to absorb failure as Early Adopters. They're influenced by customer marketing: they care deeply about references and they trust Early Adopters to gate-keep new products. They often skip the detailed, show-me-the-value proof of concepts and trials that Early Adopters require. As a result, when they start chain-adopting a new product, you can see extremely rapid adoption. Note that the Observability of the success of a product (which I talked about in the last post) either accelerates or retards how fast the Early Majority adopts.

Stage 4 & 5 - The Late Majority & The Laggards

By the time half the market is using an innovation, adoption starts to slow down as you reach companies in the Late Majority. These are companies that don't have budget for new purchases, or have economic models that don't reward the adoption of innovations (for example, selling cost reduction technologies into Utilities that price on a cost plus basis). Alternatively, these can be companies for whom a failed innovation can be very costly. They tend to be isolated on the social graph. Many types of small businesses, non-profits, and protected industries land in these stages.

Consequences of the Adoption Curve

The fact that newly adopting customers behave so differently at different stages of market adoption has profound implications for product management & marketing mix strategy. I'll talk about those implications in my next article "Consequences of The Adoption Curve".

Coda: A Note About "Crossing the Chasm"

You may have first encountered the notion of an adoption curve in Geoffrey Moore's book "Crossing the Chasm." In that book Moore covers the basics of the adoption curve, but he also makes a claim that there is a "chasm" between Early Adopters and the Early Majority that is difficult to cross.

His basic thesis is that Early Adopters comprise a diversity of use cases and subsegments and it's necessary to build a "whole product" for multiple use cases and customer segments within the Early Adopter segment (he calls this the "Bowling Alley"). The "whole product" is the collection of solutions comprising the products, services and third party products/technologies needed to deliver on the customer-defined value proposition. Companies who don't assemble "whole products", he claims, won't reach the critical mass of Early Adopters that then attracts the Early Majority.

In my opinion, the evidence of the last twenty years since the book's publication is that the "chasm" doesn't really exist as Moore envisions. Some businesses have a bowling alley, many do not. There are many truly horizontal technologies that go quickly from Early Adopters into the mainstream with minimal "whole product" requirements for different use cases and segments. VMware and Slack are just two of the most prominent examples.

What percentage are early adopters?

How big is the early majority segment of the technology adoption life cycle?

What is an early adopter of technology?

Where do the late majority sit on the technology adoption curve?