Early adopters take on risk for very little upside. It’s an activity that dramatically benefits the producer over the consumer. It’s basically gambling and I recommend staying away from it.
- 3D TV: $8,999
- Google Glass: $1,500
- HDDVD: $799
- Microsoft Zune: $249
- Amazon Fire Phone: $199
^A few 21st Century early adopter bets gone wrong. AKA a fun way to throw away 12 grand.
As an early adopter, you’re placing a bet that a new product will achieve product-market fit. Companies count on early adopters to help them out here. But this is a silly burden to put on yourself as a consumer. It’s the business’s job to find product-market fit, not the consumer. They should be the one taking the risk. As a consumer, you have the advantage of waiting for the company to figure out a great product before you commit to it.
Early adopters are looking for two main things out of the practice:
- Status from their peers
This is easy to avoid once you realize narcissism is the cause and solution here. Narcissism makes me think others will care about my new gadget and think about me positively. The truth is everyone else is self-involved too. They’re too busy also thinking about themselves to really care about your stuff.
2. A relationship with the brand
People build relationships with brands they love. In any relationship, we want validation and love from the other party. By dripping out little morsels of special treatment (beta versions, pre-launch tease outs, special communication) to early adopters, companies keep these key consumers coming back for more. Consider that the companies with the strongest early adopters are those that have built the strongest emotional connections with their brand (Apple, Google, Tesla).
Quick side note: I’m talking mostly about physical products and paid software in this piece. Freeware is a bit easier to gamble with, but it’s still a risk depending on the time and energy investment required. You typically pay for free software with some combination of your time, your data, and your attention — i.e. things more scare than money. Consider if it’s worth those resources.
Early adopter gadgets are not a stock market pick. Unlike the stock market, you don’t get some huge upside if you pick the winner before everyone else gets in. In fact, it’s the everyone else camp that benefits from your early adopter bets.
Even when early adopter bets pay off, the upside is lousy. In 1997, the average price of a DVD player was $490 (or $753 in today’s dollar). In three years that price dropped by half. It dropped by half again four years after that.
The term “early adopter” comes out of 55-year-old academic research on farmers. Sociologists wanted to understand why some farmers were quick to try new hybrid seeds and others took longer to get on board. So the five stages of the Innovation Adoption Lifecycle were created.
Maybe the emotionally-charged “Innovators” label and the pejoratively-coined “Laggards” helps keep the left side of this spectrum looking more appealing.
I also worry about the source of this research. “Early adopting” in the context of this research applied to family agriculture businesses. Taking risks on new products actually has good upside here, because what’s at stake is your family’s livelihood. And farming in the mid-20th Century had a lot of inherent potential for catastrophic downside (poor weather, pests, poor yields), a lot of which the farmer couldn’t control. By taking a bet on a new product that might eliminate some of this, the farmer enjoyed huge potential upside by being able to eliminate this downside. Early adopting made sense.
But we typically talk about it now in the context of consumer technology applications, where waiting for a new product to find its legs has no real downside. And grabbing a new gadget a few months before most of our friends really has no tangible upside.
To really understand how off-balance the early adopter relationship is, it helps to look at product releases from a business point of view.
In 1991, with the consumer computing industry preparing to explode, Silicon Valley consultant Geoffrey Moore riffed on the Innovation Adoption Lifecycle in his book Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers. The central thesis is that businesses face an intimidating chasm to cross between early adopters and early majority. Successfully crossing this chasm is the make or break moment for a new product.
When a businesses launches a new product, they rely on a lot of momentum from early adopters in order to cross the chasm. These early adopters generate the word of mouth and personal referrals that lure the early majority. Companies need them, so they make them feel special. They create three-ring circus product launch events, they send demo releases to influencers, they generate buzz and artificial scarcity with beta releases.
But the chasm isn’t easy to cross. And a lot of products don’t get to the other side. So the company either fails or pulls the plug on the product and moves on. And guess who just paid a premium for a suddenly-obsolete product.
Like I said at the beginning, being an early adopter is gambling. I’m not against gambling as long as you recognize the risk and don’t develop a dependency. Best case scenario, it’s an expensive hobby and you get a little extra status boost. Fine, but doesn’t seem worth it to me. I’d rather spend my hobby money on things I know are going to actually work out.
I’ll meet you on the other side of the chasm.
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