When innovators try to envision how people will use their product they often have different ideas on what people want. Products that are of superior technology may fail and inferior succeed, only because the inferior product has some features that people are looking for. In this lecture we look at how new products or technologies get adopted my markets. We look at the Law of Diffusion of Innovation, which explains how this adoption happens. We also look at what it takes for a new innovation to move from being a visionary idea to a practical product, or crossing the chasm. Finally we explore the hype cycle.

1. Lecture L06
DIFFUSION OF INNOVATION

2. Why is it that good products can fail and inferior – “good enough”
products can succeed?
!
What are the customers really buying?

3. Porn Industry
!
Licensing Issues
!
Betamax standard tape was 60
minutes while VHS was 2 hours

4. What happend to Blu-ray vs. HD DVD format war?

5. Tomas Edison
Menlo Park
1876-1881

6. Edison Phonograph
Victor Talking Machine’s Victrola

7. Enrico Caruso
1873-1921

8. Edison’s ideas for the phonograph
1. Letter writing and all kinds of dictation
2. Phonographic books, which will speak to blind people
3. The teaching of elocution.
4. Reproduction of music.
5. The "Family Record” ... and of the last words of dying persons.
6. Music-boxes and toys.
7. Clocks that should announce... time for going home, going to meals, etc.
8. The preservation of languages
9. Educational purposes
10. Connection with the telephone
http://memory.loc.gov/ammem/edhtml/edcyldr.html

9. Edison Phonograph
Victor Talking Machine’s Victrola

11. VisiCalc

12. Technological change is relatively easy

13. It’s the social, organisational and cultural change that is hard

14. Technology Adoption Life Cycle - The Law of
Diffusion of Innovation
Diffusion of Innovation

15. Technology Adoption Life Cycle - The Law of
Diffusion of Innovation
TECHNOLOGY
CONSUMER

16. Technology Adoption Life Cycle - The Law of
Diffusion of Innovation
In the early days
In the later days
!
!
The innovators and technology
enthusiasts drive the market
They demand technology
Small percentage of the market
The pragmatists and conservatives
dominate; they want solutions and
convenience
The big market

17. Technology Adoption Life Cycle - The Law of
Diffusion of Innovation
In the early days
In the later days
!
!
THEY BUY FOR THE
THEY BUY FOR THE
WHY
WHAT

18. Technology Adoption Life Cycle - The Law of
Diffusion of Innovation
WHY
VISIONARIES

19. Why is Apple so
successful when other
companies fail?

20. APPLE WAS IRRELEVANT AND
ALMOST BACKRUPT IN 1997
IN 2012 IT WAS THE MOST
VALUABLE COMPANY
IN THE WORLD

22. image:
cultformac

23. AAPL
Apple stock from 1997 to now

24. Brain
NEO CORTX: RATIONAL,
ANALITICAL THOUGHT, LANGUAGE
REPTILIAN: INSTINCTS,
HUNGER, DANGER
LIMBRIC SYSTEM: FEELINGS, TRUST, LOYLTY,
BEHAVIOUR, DECISION MAKING

25. Start with Why: How Great Leaders Inspire Action
Simon Sinek

26. FORMULA FOR SUCCESS?
!
1. Strong funding
2. Right people
3. Market conditions
Is this all it takes?

27. Samuel Pierpont Langley

28. Technology Adoption Life Cycle
VISIONARIES

29. Crossing the Chasm
The
change
in
customers
as
technology
matures
Crossing
the
chasm
–
or
the
Tipping
point
Source:
Geoffrey
A.
Moore:
Crossing
the
chasm

30. What triggers the tipping point?

31. What caused the tipping point for the iPod?
Apple
said
it
sold
a
record
22.7
million
iPods,
which
commands
a
70%
share
of
the
U.S.
market
for
music
players.
(source:
LA
times)

32. Apple
iPod
Sales

34. Anderson’s Grand Unified Theory of Technology Trends

35. Theory of Predicting the Future
Anderson’s Grand Unified Theory of Predicting the Future
!
All important technologies go through four states, or at least four
stages, in their lives. Each stage can be seen as a collision, with
something else. The stages are:
!
1.
2.
3.
4.
Critical Price
Critical Mass
!
Displace another technology
Become nearly free

36. Waiting in line…

38. NEXT
BECOMING INVISIBLE