Technology Adoption Lifecycle & Innovator’s Dilemma
Background & Need
Whether you are a new venture or an existing, long-time company, understanding the rate at which new technologies are adopted, and discarded, by customers is important to your strategic and tactical marketing work. Additionally, failing to understand the way in which new technologies enter markets can cause great companies to fail. Let’s take a look at both..
Technology Life Cycles
•In this graph, the older, dominant technology is taken over by the newer technology
•Over time, and as technologies mature, companies focus on, or invest in, different kinds of activities
- For you and your startup: relate this to your GSOTs (Goals, Strategies, Objectives, and Tactics), value disciplines, and core competencies. It is best to think about this.. what stage of technology maturity is best for you?
Cumulative Adoption Patterns
These days, a product’s or technology’s lifecycle is measured in months. If you miss a cycle and your startup could be in trouble. See image below:
Human’s speed of communication has risen insurmountably over time and is highlighted in this chart by the rate of adoption for newer technologies when compared to the past. Consider not only how fast new technologies now come to market, but now, how quickly they die. The DVD player was one of the most quickly adopted new technologies and yet can now be found in more museums than homes.
Questions an entrepreneur should be asking themselves when seeing this graphic are: 1) How did we satisfy our needs BEFORE we had these technologies? 2) What new technologies will we have and use tomorrow?
The Innovator’s Dilemma
Marketing Myopia
•The issue is that established companies, tend to be overly focused on their current customers, delivering incremental improvements based on customers’ stated needs and their competitors’ own progress
•Meanwhile, new technologies, brought to market by new companies, don’t yet deliver the required performance for the mainstay of the established companies’ customer base
- Till one day, the new technology finally delivers; then the old companies, using the old technology, begin to fail, with the weakest failing first…like dominoes.
Ride Sharing vs Cab Markets
When asked, “Who are our customers?” managers & leaders are likely to respond that their existing customers are their customers. The company’s focus becomes too narrow on the customer segment they are serving today.
As new technology comes along and long-time customers begin to leave, the served market for the old company becomes smaller and smaller. The company begins to focus too much on the remaining customers, who themselves may be myopic with respect to their own markets. Managers and leaders must ask themselves, “Who are our customers today, and who should be our customers x-years from now?”
“There are three kinds of companies — those that make things happen, those that watch things happen, and those who wonder what happened.” — Anonymous
Conclusion ; TLDR
- Over time, the rate at which customers adopt new technologies has increased significantly
- The lifecycle of many new products is now measured in months
- History shows that it is very difficult for companies to maintain an innovative culture and adopt/embrace new technologies
- Providing new technologies are able to improve, they will soon be good enough become the “dominant” technology
- Companies that cannot continue to innovate either find a surviving niche or go out of business
For more startup and marketing tips follow me on Twitter at @KeenanOlsen, add me on LinkedIn for more startup & marketing tips or email me a keenan@bequalified.co.
