Accelerating Acceleration
Many authors, from Everett Rogers to Geoffrey Moore to Malcom Gladwell, have studied the diffusion patterns and mechanisms of new product adoption. Whether they're called innovators, early fanatics or mavens, there's typically a group of influential pioneers who first start using a new product. Next comes a group of fast followers who trail the pioneers and then gradually the mainstream masses follow behind them. At the end of the pattern are the laggards and technophobes -- the types who still think cell phones cause brain cancer and don't understand how fax machines make that piece of paper fly through the telephone line.
The classic representation of this pattern is the bell curve with equal sized early adopters and laggards on either side and the big mass in the middle. But numerous recent data points suggest the slope and overall size of the curve is changing in fundamental ways that will be meaningful to product developers and marketers going forward:
The product uptake curve is accelerating -- Camera phones are quickly passing DVD players as the most rapidly adopted mass market consumer electronic product. And as product adoption accelerates, so does pricing pressure -- camera phones have moved from cutting edge technology to give away in less than a year. Which of course will only continue to push the adoption curve that much faster.
The laggard market is disappearing -- Unlike telephones and televisions, which eventually hit almost 100% penetration of the market, newer technologies expand on old technologies enough that the laggards never have a chance to catch up. If you still don't have a computer, you certainly don't have the Internet. And if you're not on the Internet, you don't shop online. Look for a rising class of never adopters.
New products will either open big or get killed early -- Expect the consumer electronics business to look more and more like the movie business. Bigger budgets, more upfront marketing, wide distribution and quick deaths to things that just don't seem to be getting traction.
It's not about technology any more -- We've already discussed the "good enough" concept and won't rehash it here. But suffice to say, marketers who understand how to sell into a certain market trend will have increasingly more say than technologists who understand what can be developed.
Early adopters will become a big enough group to serve on their own -- The conventional wisdom is that you target the early adopters but win on the masses. As acceleration accelerates and the barriers to new product adoption decrease, expect the size of the early adopter class to become interestingly big on its own. Some "mainstream" products will be complex enough that there shouldn't be any expectation of mass adoption.
Consumers will be the real winners -- You ain't seen nothing yet!
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(SOURCE: VentureBlog: Accelerating Acceleration )- Very interesting implications for product development e.g. Read More
Andrew Anker's version of Future Shock: Accelerating Acceleration. A good summary and I found this interesting, "Early adopters will become a big enough group to serve on their own." Bodes well for Tivo, for example.... Read More
Finally, I was able to look at the other entries in this week's Carnival of the Capitalists. (I have been running on fumes lately and definitely looking forward to a Thanksgiving Break!) Here are a few favorites (even when I... Read More
Read a good post today, from earlier this week on ventureblog titled "Accelerating Acceleration". In it, Andrew Anker lays out some shifts in the conventional wisdom of the consumer electronics world, which may or may not apply across much of... Read More
I've written before that I'm a big fan of VentureBlog. At the moment various weblogs are pointing towards the article on Accelerating Acceleration. However, here is a related post that is also brings up an interesting point. As the low... Read More
Steve Lohr in the NYT weaves a web around Markets Shaped by Consumers. That consumers shape markets is a truism, but their influence is probably understated and certainly not fully understood. Eric von Hippel, a professor at the Sloan School... Read More
Futurists live and die by adoption curves-- represented sometimes as S-curves, at other times by bell curves. Actually, "live and die" is not quite true: many of us just take a certain comfort when we see one starting to take shape in something we're s... Read More
Andrew Anker at VentureBlog suggests in Accelerating Acceleration that technology adoption life cycles are compressing. Alex Pang at FutureBlog summarizes the points: -The product uptake curve is accelerating -The laggard market is disappearing -New pr... Read More
One of the greatest benefits of weblogs is that I can continue to learn long after I've finished my schooling. Read More
Futurists live and die by adoption curves-- represented sometimes as S-curves, at other times by bell curves. Actually, "live and die" is not quite true: many of us just take a certain comfort when we see one starting to take shape in something we're s... Read More
VentureBlog: Accelerating Acceleration One of the commenters on Andrew Ankers blog brought to light an interesting concept. The derivative of acceleration is jerk, something learned way back when... Read More
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> Expect the consumer electronics business to look more and more like the movie business.
Expect *every* consumer business to look more and more like the movie business.
Consumer _products_, that should be.
Outstanding post. Three comments:
1. Your title "Accelerating acceleration" is great, but I offer an alternative. If you look at it from an engineer's point of view, speed is the first derivative of position with respect to time and acceleration is the second derivative. The third derivative? We call that "jerk" and I think it fits. The game is "jerk around" and I (facetiously) agree that the jerks (marketing types), not the engineers, are in control.
2. I like the movie business analogy; it explains a lot of the behavior we're seeing and the risk model is apt. I offer the fashion business as an alternative model. In any case, technological products are increasingly driven by hits, fads, and stars. Perhaps the behavior resembles an amalgam of several existing business models.
3. The rise of the early adopter as a distinct and viable market is wonderful. I hope it happens, but it will lead to more volatility because the early adopter is a fickle customer.
Given these characteristics, I think it will be increasingly difficult to make money consistently in this game and that the risk for investors will be in nosebleed territory. You'll need to have superb timing and a good exit strategy.
Maybe the rewards will be commensurate with the risks. But it's hard to imagine another Cisco, Intel, or Microsoft arising from this space because of the punishingly short cycle time.
Another industry with a similar risk-reward and bust/boom ratio is the Toy industry. Which makes sense -- new gadgets are really toys for those who get them. :)
Your point about early adopters is interesting, and it sure seems like a lot of people are caught up in getting the latest consumer electronics gadget... people you would have never thought would be into any of this. Its got to be a terribly difficult business for companies to make any money in... The average person won't spend for items they basically already have, and as the trend towards stuffing more and more functionality into each device, once you have a cell phone and a PDA, there will be very little you don't already have. What happens when we all carry around a cellphone/PDA/camera/MP3 player/digital video recorder/tazer/instant messager that's wired to the Net at high speeds? I think we're pretty much already halfway there and once you run out of functionality to put into these things, the price goes in the toilet.