technology-adoption-curve

What Is A Technology Adoption Curve? The Five Stages Of A Technology Adoption Life Cycle

In his book, Crossing the Chasm, Geoffrey A. Moore shows a model that dissects and represents the stages of adoption of high-tech products. The model goes through five stages based on the psychographic features of customers at each stage: innovators, early adopters, early majority, late majority, and laggard.

Why is the technology adoption life cycle useful?

There is a peculiar phase in the life cycle of a high-tech product that Moore calls a “chasm.”

This is the phase in which a product is getting used by early adopters but not yet by an early majority.

There is a wide gap between those two psychographic profiles in that stage.

Indeed, many startups fail because they don’t manage to have the early majority pick up where the early adopters left.

Understanding the technology adoption of a product helps you assess at which stage a product is and when the chasm is close to how to fill the gap and allow the early majority to pick up the void left by the early adopters.

That void is created when the early adopters are ready to leave a product that is about to go mainstream.

The market is plenty of examples of companies trying to conquer the early majority but failing in doing so.

In the process also lost the enthusiasts that made that product successful in the first place.

RelatedBusiness Strategy: Definition, Examples, And Case Studies

Crossing the Chasm with Seth Godin

In a blog post entitled attention vs. the chasm, Seth Godin highlighted:

One way they’re thinking about it:Attention is the new innovation.I don’t agree…

…Moore’s Crossing the Chasm helped marketers see that while innovation was the tool to reach the small group of early adopters and opinion leaders, it was insufficient to reach the masses. Because the masses don’t want something that’s new, they want something thatworks, something that others are using, something that actually solves their productivity and community problems.

…Early adopters are thrilled by the new. They seek innovation.

…Everyone else is wary of failure. They seek trust.

What are the stages of a technology adoption life cycle?

The stages of a technology adoption life cycle, comprises five main psychographic profiles:

  • Innovators
  • Early Adopters
  • Early Majority
  • Late Majority
  • and Laggards

Innovators 

Innovators are the first to take action and adopt a product, even though that might be buggy.
 
Those people are willing to take the risk, and those will be the people ready to help you shape your product when that is not perfect.
 
As they’re in love with the innovative aspect behind it, they are ready to sustain that. This psychographic profile is all about the innovation itself.
 
As this is sort of a hobby for them, they are ready and willing to take the risk of using something that doesn’t work perfectly, but it has great potential.

Early Adopters 

Early adopters are among those people ready to try out a product at an early stage. They don’t need you to explain why they should use that innovation.
The early adopter has already researched it, and she is passionate about the innovation behind that, however, while the innovator will adopt the high-tech product for the sake of the innovation behind it.
The early adopter will make an informed buying decision. In that stage, even though the product is only appealing to a small niche of an early adopter, it’s great and ready.
Those early adopters feel different from the early majority. And if you “betray them” they might probably leave you right away. That is where the chasm stands.

Early majority

The early majority is the psychographic profile made of people that will help you “cross the chasm.” Getting traction means making a product appealing to the early majority. Indeed, the early majority is made of more conscious consumers, that look for useful solutions but also beware of possible fads.

Late Majority 

The late majority kicks in only after a product is well established and it has a more skeptical approach to technological innovation and it feels more comfortable in the adoption only when a product has gone mainstream.

Laggards

Laggards are the last in the technology adoption cycle. While the late majority is skeptical of technological innovation, the laggard is adverse to it.
Thus, unless there is a clear, established an advantage in using a technology those people will hardly become adopters. For some reason, which might be tied to personal or economic aspects, those people are not looking to adopt a technology.

Other factors influencing technological adoption

One of my favorite authors is Jared Diamond, a polymath whose knowledge goes beyond books, education, or instruction.

In fact, Jared Diamond is an ecologist, geographer, biologist, and anthropologist.

Whatever you want to label him, the truth is Jared Diamond is just one of the most curious people on earth.

As we love to put a label on anything, we get impressed by as many labels one person has. 

However, Jared Diamond has been just curious, looking for answers to compelling and hard questions about our civilization.

Searching for those answers has made him an expert in many disciplines. 

In fact, even though he might not know what’s the latest news about Google‘s algorithm update, Apple’s latest product launch, or what features the new iPhone has, I believe Jared Diamond is the most equipped person to understand how the technological landscape evolves.

The reason being Jared Diamond has been looking at historical trends for thousands of years and dozens of cultures and civilizations.

He’s also lived for short periods throughout his life with small populations, like New Guineans.

In his book Guns, Germs & Steel, there is an excerpt that tries to explain why western civilizations were so technologically successful and advanced compared to any other population in the world, say New Guinea.

For many in the modern, hyper-technological world, the answer seems trivial. With the advent of the digital world, even more.

We love to read and get inspired every day by the incredible stories of geniuses and successful entrepreneurs that are changing the world.

Jared Diamond has a different explanation for how technology evolves and what influences its adoption throughout history, and it has only in part to do with the ability to make something that works better than what existed before.

Why the heroic theory of invention is flawed

If you read the accounts of many entrepreneurs that have influenced our modern society, those seem to resemble the stories of heroes, geniuses, and original thinkers.

In short, if we didn’t have Edison, Watt, Ford, and Carnegie, the western world wouldn’t have been so wildly successful.

For how much we love this theory, that doesn’t seem to resemble history.

True, those people were way ahead of their times.

They were geniuses, risk-takers, and in some cases, mavericks.

However, were they the only ones able to advance our society? That is not the case.

Assuming those people were isolated geniuses able to come up with the unimaginable, if the culture around hadn’t been able to acknowledge those inventions, we wouldn’t have traces as of now of those discoveries.

So what influenced technological adoption?

The four macro patterns of technological adoption

According to Jared Diamond, there are four patterns to look at when looking for technological adoption:

  1. A relative economic advantage with existing technology.
  2. Social value and prestige.
  3. Compatibility with vested interests.
  4. The ease with which those advantages can be observed.

The relative economic advantage of existing technology

The first point seems obvious.

In fact, one technology to win over the other doesn’t have just to be better; but way more effective.

To think of a recent example when Google took off the search industry. When Google got into the search industry, it was not the first player.

It was a latecomer. Yet its algorithm, PageRank, was so superior to its competition that it quickly took off.

What’s next?

Social value and prestige

This is less intuitive.

In fact, of how much we love to think of ourselves as rational creatures, we might be way more social than we’re rational.

Thus, the social value and prestige of a technological innovation play as much of a key role in its adoption as its innovative aspects.

Think about Apple’s products.

Apple follows a business model that can be defined as a razor and blade business model. In short, the company attracts users on its platform, iTunes or Apple Store, by selling music or apps conveniently while selling its iPhones at very high margins.

However, it is undeniable that what makes Apple able to sell its computers and phones at a higher price than competitors is the brand the company was able to build over the years.

In short, as of the time of this writing, Apple still represents a status quo that makes the company highly profitable.

Compatibility with vested interests

In Jared Diamond‘s book Germs, Guns & Steel, to prove this point, he uses the story of the QWERTY keyboard.

This is the keyboard you’re using right now on your mobile device or computer.

It is called this way because its first left-most six letters form the name “QWERTY.”

Have you ever wondered why you use this standard? You might think this has to do with efficiency.

But instead, that is the opposite. This standard was invented at the end of the 1800s when typewriters became the standard.

When typists were typing too fast (page 248 of Germs, Guns & Steel), typewriters jammed.

In short, they devised a system that was thought to slow down typists so that typewriters wouldn’t get jammed anymore.

Yet as more than a century went by and we started to use computers and mobile devices instead of switching to a more efficient system, we kept the old one.

Why?

According to Jared Diamond, the most compelling reason for not being able to switch to a new standard was the vested interests of small lobbies of typists, typing teachers, typewriters, and computer salespeople.

The ease with which those advantages can be observed

When technological advancement can be easily recognized as the fruit of the success of an organization, country, or enterprise, it will be adopted by anyone that wants to keep up with it.

Think, for instance, about two countries going to war.

One of them has a secret weapon that makes them win the war.

As soon as the enemy that lost the battle finds that out, next time, that weapon will also be adopted by the losing side.

Think also of another more recent example.

As big data has become a secret technological weapon used by Obama to win his electoral campaign.

So Trump used it to take over his competitors during the last US political campaign.

Now that we know the four macro patterns of technological adoption and how the technology adoption curve might work, it might be easier for you to cross the chasm!

Technology adoption curve examples

Let’s now look at the iPhone’s technology adoption curve.

Apple iPhone

The Apple iPhone was released to the United States market in July 2007.

While the reasons behind the success of the iPhone are well-known, it is essential to note that the earliest iteration was somewhat different from the one consumers are accustomed to today. 

The first iPhone had no third-party apps and ran exclusively on AT&T’s slow and unreliable cell network.

Moreover, it was only available in five other countries: Germany, France, the United Kingdom, Ireland, and Austria.

There was also a general belief that the iPhone would never attain a significant market share.

Techcrunch and even The Unofficial Apple Weblog (TUAW) predicted its imminent demise, while there were less surprising but similar predictions from Microsoft CEO Steve Ballmer and Blackberry CEO Mike Lazaridis. 

Innovators and early adopters

According to the technology adoption curve, innovators were the first to use the iPhone.

Many were content with overlooking some of the flaws and feature omissions instead of its impressive touch screen, camera, and intuitive design. 

Innovators were also tech-savvy enough to purchase an iPhone in one of the five approved countries, unlock the SIM card from AT&T, and adapt it for use in their home countries.

This would prove critical to the product’s early aspirations as instructions on how to jailbreak the iPhone spread across the internet.

At this point, the curve transitioned from innovators to early adopters who shared their experiences with friends and family and realized the iPhone was complementary to social media sites such as Facebook.

Early majority

In 2008, the App Store was launched, turning the iPhone into anything from a motion-sensitive video game device to a means of paying bills or route-finding. 

Around the same time, Apple officially released the smartphone in more countries without exclusivity deals with cell network carriers.

With increased functionality and global reach, the early majority of the technology curve started using the iPhone.

By the first quarter of 2012, almost 25% of all smartphone shipments were iPhones.

Late majority

Between 2006 and 2016, Apple grew its business revenue by a factor of ten. Revenue for 2016 was $215.6 billion, with 63% of sales that year driven by the iPhone.

This was helped to some extent by younger generations of consumers with disposable income who needed to purchase every model update as a matter of life and death.

However, it was also helped by the late majority of individuals who were perhaps more price-conscious and preferred to purchase an older model that had already been on the market for a few years.

Many of these consumers were aged 40 and above and were essentially forced to purchase a smartphone to communicate with friends and family members.

Laggards

Today, it is estimated that 83.89% of the world’s population owns a smartphone.

While many of the remaining 16% are children, others are laggards who are reluctant to use smartphone technology over traditional forms of communication such as telephones.

Some may lack the technical nous because of their advanced age, while others avoid smartphones for personal, cultural, or idealistic reasons.

Others reside in third-world nations and lack the financial means to purchase a smartphone.

These individuals may be forced to wait many years before an iPhone purchase becomes viable.

Tesla technology adoption curve

tesla-market-entry-strategy

In this example, we’ll discuss the technology adoption curve of the Tesla Model 3 and electric vehicles in general.

To enter the EV market, Tesla used a niche-down strategy, showing the viability of EVs through high-performance sports cars. 

Innovators and early adopters

tesla-early-adopters

Tesla started taking pre-orders for the Model 3 sedan on March 31, 2016.

Touted as the “working man’s electric vehicle,” the company could secure 325,000 reservations for the Model 3 without spending a cent on paid advertisements. 

Each individual, who forked out a down payment of $1,000 for a vehicle with specifications yet to be ironed out, was motivated to do so because of Tesla’s ability to win over innovators and early adopters.

Indeed, thousands of affluent consumers were more than willing to buy into Musk’s vision of a future where personal transport is green and high-tech.

According to the diffusion of innovations theory put forth by Everett Rogers, these consumers equate to around 16% of all buyers.

Early majority

tesla-early-adopters

However, it became evident in 2019 that Tesla was having trouble moving buyers from early adopters to the early majority – a process author Geoffrey Moore described as crossing the chasm and a point where many products falter.

One indicator of Tesla’s trouble came from lackluster sales of the Model S and X and increased Model 3 competition from Audi, Jaguar, Porsche, and Mercedes-Benz.

Many also speculated that Tesla was cannibalizing its more profitable models with the Model 3.

Many of the Model 3’s features have also been detrimental to its success. These include:

  • Unique interiors – for better or worse, Tesla interiors are a radical departure from what most are accustomed to in a Toyota or Mazda. Most controls are accessed on the vehicle’s enormous screen, but the tech is not driver-friendly or intuitive and could be considered unsafe while driving.
  • Perceived quality issues – while many of the quality control issues associated with previous Tesla models have been resolved, there is still a perception that Tesla models are unreliable.
  • Lack of ride comfort – Tesla manufactures its own seats while competitors source them from third parties. This is to the company’s detriment as the Model 3 seats are known to be rather uncomfortable.

Those inspired by Musk’s vision are likely to look past these issues but to reach the early majority, the company will need to make the Model 3 more appealing to those who have certain expectations around the purchase of a new vehicle.

As a possible indication that Tesla is making inroads in North America, the Model 3 was the 7th bestselling vehicle for Q4 2019 and the only one with a price point of $40,000.

That same year, twice as many Model 3 were sold in the Netherlands as the second most popular automobile. 

The Model 3 has also more recently reached the early majority stage in Australia.

Late majority and laggards

transitional-business-models
A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.

The late majority and laggards tend to be those from older generations who grew up with internal combustion engines (ICEs) or were involved in the automotive industry in some way.

To appeal to these buyers, Tesla must find a way to offer a comparable driving experience.

The range of a Model 3 must be able to match its ICE-based competition to combat so-called “range anxiety” – particularly for those car enthusiasts who like to drive at speed.

Aside from addressing the issues mentioned above, the most obvious way for Tesla to increase its target audience is to start marketing to them.

It must move beyond tech-loving men in their 40s and 50s and market the Model 3 as a safe, comfortable, reliable, and intuitive car brand.

Women drivers are just one example of an underserved and underutilized market segment the company could target.

What is chasm in technology adoption life cycle?

In his book, Crossing the Chasm, Geoffrey A. Moore shows a model that dissects and represents the stages of adoption of high-tech products. The model goes through five stages based on the psychographic features of customers at each stage: innovators, early adopters, early majority, late majority, and laggards.

What is the innovation adoption curve?

The technology adoption lifecycle is a model put together in the book, Crossing the Chasm which is built upon the Diffusion Of Innovations Theory by E.M. Rogers. It highlights how the adoption of high-tech products depends on the way five key psychographic groups think about innovation. The model moves from innovators who look at technology for its own sake, early adopters, early majority, late majority, and laggards who are skeptical about innovation.

What are the four stages of the technology adoption life cycle?

According to the technology life cycle, there are four key stages: research and development, ascent, maturity, and decline depending on the adoption of high-tech products by giving main psychographic groups: innovators, early adopters, early majority, late majority, and laggards, each with a different set of features.

What are the 5 adopter categories?

According to the Diffusion Of Innovations Theory by E.M. Rogers, a communication theorist at the University of New Mexico, in 1962, there are five stages of high-tech product adoption based on the psychographic features of customers at each stage: innovators, early adopters, early majority, late majority, and laggard.

Read Next: Business Model Innovation, Business Models.

Related Innovation Frameworks

Business Model Innovation

business-model-innovation
Business model innovation is about increasing the success of an organization with existing products and technologies by crafting a compelling value proposition able to propel a new business model to scale up customers and create a lasting competitive advantage. And it all starts by mastering the key customers.

Innovation Theory

innovation-theory
The innovation loop is a methodology/framework derived from the Bell Labs, which produced innovation at scale throughout the 20th century. They learned how to leverage a hybrid innovation management model based on science, invention, engineering, and manufacturing at scale. By leveraging individual genius, creativity, and small/large groups.

Types of Innovation

types-of-innovation
According to how well defined is the problem and how well defined the domain, we have four main types of innovations: basic research (problem and domain or not well defined); breakthrough innovation (domain is not well defined, the problem is well defined); sustaining innovation (both problem and domain are well defined); and disruptive innovation (domain is well defined, the problem is not well defined).

Continuous Innovation

continuous-innovation
That is a process that requires a continuous feedback loop to develop a valuable product and build a viable business model. Continuous innovation is a mindset where products and services are designed and delivered to tune them around the customers’ problem and not the technical solution of its founders.

Disruptive Innovation

disruptive-innovation
Disruptive innovation as a term was first described by Clayton M. Christensen, an American academic and business consultant whom The Economist called “the most influential management thinker of his time.” Disruptive innovation describes the process by which a product or service takes hold at the bottom of a market and eventually displaces established competitors, products, firms, or alliances.

Business Competition

business-competition
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.

Technological Modeling

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Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Diffusion of Innovation

diffusion-of-innovation
Sociologist E.M Rogers developed the Diffusion of Innovation Theory in 1962 with the premise that with enough time, tech products are adopted by wider society as a whole. People adopting those technologies are divided according to their psychologic profiles in five groups: innovators, early adopters, early majority, late majority, and laggards.

Frugal Innovation

frugal-innovation
In the TED talk entitled “creative problem-solving in the face of extreme limits” Navi Radjou defined frugal innovation as “the ability to create more economic and social value using fewer resources. Frugal innovation is not about making do; it’s about making things better.” Indian people call it Jugaad, a Hindi word that means finding inexpensive solutions based on existing scarce resources to solve problems smartly.

Constructive Disruption

constructive-disruption
A consumer brand company like Procter & Gamble (P&G) defines “Constructive Disruption” as: a willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. According to P&G, it moves around four pillars: lean innovation, brand building, supply chain, and digitalization & data analytics.

Growth Matrix

growth-strategies
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

Innovation Funnel

innovation-funnel
An innovation funnel is a tool or process ensuring only the best ideas are executed. In a metaphorical sense, the funnel screens innovative ideas for viability so that only the best products, processes, or business models are launched to the market. An innovation funnel provides a framework for the screening and testing of innovative ideas for viability.

Idea Generation

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Design Thinking

design-thinking
Tim Brown, Executive Chair of IDEO, defined design thinking as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” Therefore, desirability, feasibility, and viability are balanced to solve critical problems.

FourWeekMBA Business Toolbox

Business Engineering

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Tech Business Model Template

business-model-template
A tech business model is made of four main components: value model (value propositions, missionvision), technological model (R&D management), distribution model (sales and marketing organizational structure), and financial model (revenue modeling, cost structure, profitability and cash generation/management). Those elements coming together can serve as the basis to build a solid tech business model.

Web3 Business Model Template

vbde-framework
A Blockchain Business Model according to the FourWeekMBA framework is made of four main components: Value Model (Core Philosophy, Core Values and Value Propositions for the key stakeholders), Blockchain Model (Protocol Rules, Network Shape and Applications Layer/Ecosystem), Distribution Model (the key channels amplifying the protocol and its communities), and the Economic Model (the dynamics/incentives through which protocol players make money). Those elements coming together can serve as the basis to build and analyze a solid Blockchain Business Model.

Asymmetric Business Models

asymmetric-business-models
In an asymmetric business model, the organization doesn’t monetize the user directly, but it leverages the data users provide coupled with technology, thus have a key customer pay to sustain the core asset. For example, Google makes money by leveraging users’ data, combined with its algorithms sold to advertisers for visibility.

Business Competition

business-competition
In a business world driven by technology and digitalization, competition is much more fluid, as innovation becomes a bottom-up approach that can come from anywhere. Thus, making it much harder to define the boundaries of existing markets. Therefore, a proper business competition analysis looks at customer, technology, distribution, and financial model overlaps. While at the same time looking at future potential intersections among industries that in the short-term seem unrelated.

Technological Modeling

technological-modeling
Technological modeling is a discipline to provide the basis for companies to sustain innovation, thus developing incremental products. While also looking at breakthrough innovative products that can pave the way for long-term success. In a sort of Barbell Strategy, technological modeling suggests having a two-sided approach, on the one hand, to keep sustaining continuous innovation as a core part of the business model. On the other hand, it places bets on future developments that have the potential to break through and take a leap forward.

Transitional Business Models

transitional-business-models
A transitional business model is used by companies to enter a market (usually a niche) to gain initial traction and prove the idea is sound. The transitional business model helps the company secure the needed capital while having a reality check. It helps shape the long-term vision and a scalable business model.

Minimum Viable Audience

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The minimum viable audience (MVA) represents the smallest possible audience that can sustain your business as you get it started from a microniche (the smallest subset of a market). The main aspect of the MVA is to zoom into existing markets to find those people which needs are unmet by existing players.

Business Scaling

business-scaling
Business scaling is the process of transformation of a business as the product is validated by wider and wider market segments. Business scaling is about creating traction for a product that fits a small market segment. As the product is validated it becomes critical to build a viable business model. And as the product is offered at wider and wider market segments, it’s important to align product, business model, and organizational design, to enable wider and wider scale.

Market Expansion Theory

market-expansion
The market expansion consists in providing a product or service to a broader portion of an existing market or perhaps expanding that market. Or yet, market expansions can be about creating a whole new market. At each step, as a result, a company scales together with the market covered.

Speed-Reversibility

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Asymmetric Betting

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Growth Matrix

growth-strategies
In the FourWeekMBA growth matrix, you can apply growth for existing customers by tackling the same problems (gain mode). Or by tackling existing problems, for new customers (expand mode). Or by tackling new problems for existing customers (extend mode). Or perhaps by tackling whole new problems for new customers (reinvent mode).

Revenue Streams Matrix

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In the FourWeekMBA Revenue Streams Matrix, revenue streams are classified according to the kind of interactions the business has with its key customers. The first dimension is the “Frequency” of interaction with the key customer. As the second dimension, there is the “Ownership” of the interaction with the key customer.

Revenue Modeling

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Revenue model patterns are a way for companies to monetize their business models. A revenue model pattern is a crucial building block of a business model because it informs how the company will generate short-term financial resources to invest back into the business. Thus, the way a company makes money will also influence its overall business model.

Pricing Strategies

pricing-strategies
A pricing strategy or model helps companies find the pricing formula in fit with their business models. Thus aligning the customer needs with the product type while trying to enable profitability for the company. A good pricing strategy aligns the customer with the company’s long term financial sustainability to build a solid business model.

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