Technology Adoption Life Cycle

Technology Adoption Life Cycle

Innovation

The Technology Adoption Life Cycle is especially relevant for disruptive technology. We call technological advances disruptive when they require changes in the behavior of users. Continuous innovation on the other side are for example regular software upgrades that don’t result in any substantial behavioral changes.

Users (consumers)

The adoption life cycle distinguishes users by their response to disruptive innovation. It gives an idea of the size of the target group and the psychological profile of the users.

Most important is that adoption is approached in the perspective of market penetration and each market phase requires a different approach to deal with its particular challenges.

Early markets

Require an entrepreneurial mindset with a breakthrough product.

Innovator / techies / tech enthusiasts

• Psychology: technology is a central part in their life and they love to explore new solutions. Forgivable to low performance, missing functionality.
• Pricing: expect technology should be cheap and accessibly to everyone
• Distribution: help to spread the word; happy to try it out to see if it works
• Support: want to get a technically knowledgable person to answer their questions

Early Adopters / visionaries

• Psychology: find it easy to understand the benefits of new technology as strategic opportunity; they pursue their own (business goal) and technology is a means to this goal; visionaries are looking for a breakthrough not a small improvement;
• Distribution: core to open up new market segments; hard to please

Mainstream /established markets

Product must address pragmatists, be mature and offer support.

Early majority / pragmatists

• Psychology: driven by practicality. Wait to see well-established references in the mainstream market before investing.; seek predictable improvements; Risk is associated with waste of money / time and not opportunity;
• Loyalty: once won, they are more loyal than early adopters
• Distribution: fundamental for growth

Late majority / conservatives

• Psychology: wait until something has become the established standard and want to see a lot of convenience and support; user experience is more important than feature sets;
• Pricing: will not support high price margins
• Distribution: buy mature products from established companies

Laggards / skeptics

• Psychology: avoid new technology and adopt only if there existing alternatives vanish
• Distribution: not worth pursuing

Cracks

It would be wrong to assume there is a continuous, smooth transition between those groups of adopters. This is visualized as cracks / gaps in the diagram:

1. Between innovators and early adopters is an usage crack. While innovators seek new technology for the sake of technology, early adopters want a real benefit to adopt technology. If a new technology fails to prove this value, nothing will bridge from innovators to early adopters.
2. Between early and late majority is another adoption crack: the early majority is willing to become technologically competent when necessary while the late majority doesn’t want to bother and needs technology to be as easy to adopt.

Chasm

There is also a deep dividing chasm between early adopters and early majority:

• Early adopters expect business advantages compared to competition. Being first makes them prepared for bugs that accompany any innovation.
• Early majority wants to buy productivity improvements (evolution) for established operations. Therefore, they will not rely on early adopters as references but on early majority adoptions to see if they should transition.

Additionally, crossing this chasm will create challenges: already established companies will try to shut you out and potential customers will be suspicious. One strategy is to target smaller niche markets first to build up references and strong word-of-mouth reputation among buyers (cf. Moore 2014:80ff).

Bowling Alley, Tornado and Mainstreet

The Bowling Alley, Tornado and Main Street concepts are additional aspects that outline how to evolve markets after early adoption, from niche expansion to mass‑market scaling and stabilization. I will only introduce the conceptual idea.

Bowling Alley

Moving from the first niche markets to the next ones based on user’s word-of-mouth references. Bowling Alley describes this growth, with distribution focused on value to win over markets.

Tornado

Represents a substantial change in the market positioning. Movement from niche markets to a broad segment where pricing gains focus.

Main Street

This is where a product shifts to a sustainable rhythm.