In the early days of product development, the technology is inferior and lacking in performance. The focus is very much on the technology itself. The users are enthusiast who like the idea of the product, find use for it, and except the lack of performance. Then as the product becomes more mature, other factors become important, such as price, design, features, portability. The product moves from being a technology to become a consumer item, and even a community. In this lecture we explore the change from technology focus to consumer focus, and look at why people stand in line overnight to buy the latest gadgets.

1. LECTURE L07
DIFFUSION OF TECHNOLOGY

2. Recap

3. Installation period Deployment Period
Institutional
recomposition
Degreeoftechnologicalmaturity
andmarketsaturation
time
Crash 2000-2008Big bang Intel 4004 1971 Next big bang
Techno-economic
split
IRRUPTION
Financial Bubble
Time
FRENZY
Golden Age
SYNERGY
MATURITY
Source: Carlota Perez

4. INSTALLATION
PERIOD
TURNING
POINT
DEPLOYMENT
Age of
Information
1971
Internet mania and
financial casino
2000 & 2008
The Industrial
Revolution
1771 Canal mania 1793-97 The Great British Leap
Age of Steam
and Railways
1829 Railway mania 1848-50 The Victorian Boom
Age of Steel
and Electricity 1875
Infrastructure
bubbles
1890-95
The Belle Époque (Europe)
Progressive Era (USA)
Age of Oil and
Automobile
1908
The Roaring
Twenties
1929-33 & 43 Post-war Golden Age
The New Golden Age?
Source: Carlota Perez
Technological Revolution

5. Current Events

8. LECTURE L06
DIFFUSION OF TECHNOLOGY

9. Why is it that good products can fail and inferior – “good enough”
products can succeed?
What are the customers really buying?
Edison Phonograph Sony Betamax Apple Lisa

10. Menlo Park
1876-1881
Tomas Edison

11. Edison Phonograph Victor Talking Machine’s Victrola

13. Enrico Caruso
1873-1921

14. 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

15. Edison Phonograph Victor Talking Machine’s Victrola

16. Phonograph conclusion:
Customers wanted music by their favourite singers - the stars
Disk are more convenient

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

18. Betamax conclusion:
Customers wanted to record and/or rent movies
Legal issues also played some part
And the Porn Industry was forced to adopt VHS

19. Development started 1978
Release 1983
Sold 100.000 machines
Featured preemptive multi-
tasking OS with Graphical
User Interface

20. Lisa conclusion:
The vision was right
Technology just was not there
Too many features

21. Customer Motivations
Customer are not always buying products for the reason
the inventor thinks

23. VisiCalc

24. Technological change is relatively easy

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

26. Innovations that will transform the world

27. Self-driving car

29. Personal Robotics in Factories

31. How does new technology diffuse into a market?

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

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

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

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

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

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

41. APPLE WAS IRRELEVANT AND
ALMOST BANKRUPT IN 1997
IN 2012 IT WAS THE MOST
VALUABLE COMPANY
IN THE WORLD

45. image: cultformac

46. AAPL Apple stock from 1997 to now

47. Why do people wait in line for many hours to get a product you
can get by walking in just few days later
And other products, cheaper already do more
It makes no sense
Exactly

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

49. People’s actions and decision are (almost) always motivated by self-interest

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

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

53. Samuel Pierpont Langley

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

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

58. What triggers the tipping point?

59. 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)

61. No, it was not just the white earbuds. It’s the whole experience thing

63. Apple iPod Sales

66. Anderson’s Grand Unified Theory of Technology Trends

68. 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. Critical Price
2. Critical Mass
3. Displace another technology
4. Become nearly free
Theory of Predicting the Future

69. NEXT
Becoming invisible