Relatable Lessons about Diffusion of Innovations
Let me tell you a beautiful thing called the Diffusion of Innovation. As one of the oldest social science theories, it is proposed by Everett Rogers 60 years ago. He said that a product of innovation is being adopted by 5 different groups of people, within their own different ways, and their own different stages.
Apparently, in 1991, another theorist called Geoffrey Moore found out that this framework only applies to continuous innovation; an innovation that only follows similar innovations before it, and does not require us to change our behavior to adopt it. Examples can be easily found, e.g. technology implemented in today’s smart-TV (4K to 8K), updates from your favorite operating system (macOS Big Sur to Monterey), or the launching of PlayStation 5 after 4.
Moore argues that we overlook something called Chasm; the challenging transition a company must face when dealing with its product of discontinuous innovation (it also goes by the name disruptive innovation).
Again, examples can be found everywhere. Take e-wallet (in Bahasa, it is referred to as “dompet digital”). It makes people no longer use banknotes for transactions. Instead, they use their balance which is stored in Go-pay, OVO, ShopeePay, Dana, or LinkAja (the list comes from the famous ones in Indonesia). Another example is Netflix or Disney+; which makes people no longer watch dramas and movies from televisions or cinemas. Or Spotify, makes people leave their walkman, CDs, and iPod to listen to their favorite music. Or cloud service providers; you can choose from AWS, Google Cloud, or Microsoft Azure, where you can trust your data service and architecture in the “cloud”, no longer your own relatively high and expensive maintenance server room.
To illustrate more, let’s take the example of “e-wallet”.
If you say:
“Not until the government changes all the banknotes into digital money and I can’t buy any single thing using hard cash, then I will use it, for sure. Don’t get me wrong, I’m still afraid tho. I think it will not as safe as what we’re using before, but, ugh, no other choice, man”
— you are in the #Laggards Team.
If you say:
“Not until most people (you know, it means my family, my friends, my colleagues—not all of them of course, just majority is enough) have moved on and it becomes really, really handy to use e-wallet, then I will try it. You know me, I wait until everything else comfortable enough to take the step”
— you are in the #LateMajority Team.
If you say:
“When I see e-wallet prove themselves. When there are enough tenants using it in various areas (fresh market, restaurant, transportation, etc… because why use it only for the food discount, right), I’ll use it. Because why not”
— you are in the #EarlyMajority Team.
If you say:
“I want to be the first one on my block who uses e-wallet (no, I don’t care if there’s only a few tenants at the moment that providing the system; I don’t care if the UI-UX is not that pleasant to eye; I don’t care if sometimes there’s bug popped up) — just let me use it and try it, man”
— you are in the #EarlyAdopters Team.
If you say:
“I know there are some e-wallets dude, nevermind, I already try them all and I think I know the better technology, so yeah, I would build my own e-wallet, you hear that, I will build and launch it on the Appstore/Playstore, get it registered on OJK, and beat those existing e-wallets out there”
— you are in the #Innovators Team.
Here comes the intriguing part.
From Innovators into Early Adopters, the diffusion is not taking too long. The same thing also happens during diffusion from the Early Majority into Late Majority.
There is also a relatively long time for the Late Majority to reach Laggards, to the point where countless important, famous, and life-changing innovations are never being adopted by the last category of people. People in remote areas, or some tribal ethnic group, or take a closer example: our own grannies in the village; they still cook using traditional stoves powered by logs that are cut into small pieces. No need to compare to ourselves who recently consider buying an induction cooker, or an air fryer, or simply use Traveloka Eats (because you prefer preparing the upcoming meeting’s deck rather than preparing the meal).
Why do we need to understand Chasm? Because it helps companies deal with their disruptive innovation. Companies need to know the difference of market characteristics between Early Market (innovators — early adopters) and Majority/Mass/Mainstream Market (early majority — late majority — laggards).
It is the decisive phase for the product itself. To pivot or persevere. To start gaining more market share, or stay as it is (another cool-geek stuff only certain people use).
Why must we cross the Chasm?
In a 2018 podcast from Clicksuasion Labs, when asked what is the motivation he writes his book, Moore said,
Technology has a big role to make the world a better place. But to do that, technology must become successful so they can try and grow and re-invest and create jobs and also create value. … To get the market or to not get the market, that’s for me is a bad outcome … This is how we must get a better move to this wonderful technology.
Moore also stated in his book:
We have all read a lot about these types of products, yet not one has achieved to date a mainstream market leadership position, despite the fact that the products actually do work reasonably well. In large part this is because of the high degree of discontinuity implicit in their adoption by organizations, and the inability of the marketing effort, to date, to lower this barrier to the early majority. So the products languish, continuing to feed off the early adopter segment of the market, but unable to really take off and break through to the high-volume opportunities.
Crossing the Chasm is like a life or death matter for a company with disruptive products. They must cross it, or else they face the risk of lacking new customers and cannot grow the business. They need to gain high-tech marketing success.
A mainstream market is where the bigger market share, bigger potential, and bigger popularity exist. It is dominated by pragmatists, conservatives, and skeptics, and you cannot expect them to buy your product unless there is enough support system available.
This is obviously a difficult period. Not many innovative products can deal with it, for example, 3D printers, cryptocurrency, solar power, cleaning robots, and even Google Glass, an innovative product that comes from world-tech-giant. This illustrates why some technology is adaptive and why some of them are not; that’s why the Chasm occurred and innovative products need to cross it.
The goal is to be successful like when the internet and handheld phone-book disrupt Yellowpages, Google Maps disrupt paper-based maps, WhatsApp disrupt SMS, Airbnb disrupts hotels, and many more.
Can we force it?
Sometimes, when the change is needed on a bigger scale, like nation-wide, disruptive technology cannot wait too long for it to be adopted stage by stage, not even to cross the Chasm. That is when the term “by force” usually comes along.
Take an example when the Indonesian government aims to make CommuterLine’s passengers pay the tickets with RFID Card. Paperless. There will be no paper tickets anymore. They managed it because people can’t hop into the train anymore if they’re not using the card. The government succeeded to make all of the 5 groups get used to disruptive technology. They copy-paste the same strategy when replacing all of the highway payments from paper to e-money (and maybe later to MLFF? Or to EV one day?). The key is making 5 categories of people into 1 single category: Laggards; when they have no other choice rather than to embrace the new technology.
Because of a global pandemic, most disruptive technologies are also being adopted several years faster than predicted before, for example, penetration of the internet and smartphones in rural areas. You are now familiar with online classes, online student enrollment, computer-based-test, and hybrid learning more than before. Some companies also thrive in this condition and open new opportunities, grow their users, and increase brand awareness.
Despite the effectiveness, this “force” method, especially the manufactured ones, is still debatable, because it needs bigger capital and suitable regulation, for example, to build the proper infrastructure and other systems to support the adoption of technology from all of the people’s categories. This may seem similar to what Moore mentioned as “inside the tornado”; one of the alternatives to cross the Chasm. Although maybe now the tornado hits everyone within all the groups together (rather than only “early adopters” and “early majority”).
Now let’s chill and enjoy the ride. Isn’t it exciting to be part of this generation? I cannot imagine what the next generations will experience, feel, and create. It must be more wonderful (or dreadful? please no) than today :)
