Lecture L06
DIFFUSION OF INNOVATION
Why is it that good products can fail and inferior – “good enough”
products can succeed?

!

What are the customers really...
Porn Industry
!

Licensing Issues
!

Betamax standard tape was 60
minutes while VHS was 2 hours
What happend to Blu-ray vs. HD DVD format war?
Tomas Edison
Menlo Park

1876-1881
Edison Phonograph

Victor Talking Machine’s Victrola
Enrico Caruso 

1873-1921
Edison’s ideas for the phonograph
1. Letter writing and all kinds of dictation

2. Phonographic books, which will speak to...
Edison Phonograph

Victor Talking Machine’s Victrola
VisiCalc
Technological change is relatively easy
It’s the social, organisational and cultural change that is hard
Technology Adoption Life Cycle - The Law of
Diffusion of Innovation

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

TECHNOLOGY

CONSUMER
Technology Adoption Life Cycle - The Law of
Diffusion of Innovation
In the early days

In the later days

!

!

The innova...
Technology Adoption Life Cycle - The Law of
Diffusion of Innovation
In the early days

In the later days

!

!

THEY BUY F...
Technology Adoption Life Cycle - The Law of
Diffusion of Innovation

WHY

VISIONARIES
Why is Apple so
successful when other
companies fail?
APPLE WAS IRRELEVANT AND 

ALMOST BACKRUPT IN 1997
IN 2012 IT WAS THE MOST 

VALUABLE COMPANY 

IN THE WORLD
image:	
  cultformac
AAPL

Apple stock from 1997 to now
Brain

NEO CORTX: RATIONAL, 

ANALITICAL THOUGHT, LANGUAGE

REPTILIAN: INSTINCTS, 

HUNGER, DANGER

LIMBRIC SYSTEM: FEELIN...
Start with Why: How Great Leaders Inspire Action

Simon Sinek
FORMULA FOR SUCCESS?

!

1. Strong funding

2. Right people

3. Market conditions

Is this all it takes?
Samuel Pierpont Langley
Technology Adoption Life Cycle

VISIONARIES
Crossing the Chasm
The	
  change	
  in	
  customers	
  as	
  technology	
  matures	
  
Crossing	
  the	
  chasm	
  –	
  or...
What triggers the tipping point?
What caused the tipping point for the iPod?

Apple	
  said	
  it	
  sold	
  a	
  record	
  22.7	
  million	
  iPods,	
  
w...
Apple	
  iPod	
  Sales
Anderson’s Grand Unified Theory of Technology Trends
Theory of Predicting the Future
Anderson’s Grand Unified Theory of Predicting the Future

!

All important technologies go ...
Waiting in line…
NEXT
BECOMING INVISIBLE
New Technology Lecture L06 Diffusion of Innovation
New Technology Lecture L06 Diffusion of Innovation
New Technology Lecture L06 Diffusion of Innovation
New Technology Lecture L06 Diffusion of Innovation
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New Technology Lecture L06 Diffusion of Innovation

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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.

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Transcript of "New Technology Lecture L06 Diffusion of Innovation"

  1. 1. Lecture L06 DIFFUSION OF INNOVATION
  2. 2. Why is it that good products can fail and inferior – “good enough” products can succeed? ! What are the customers really buying?
  3. 3. Porn Industry ! Licensing Issues ! Betamax standard tape was 60 minutes while VHS was 2 hours
  4. 4. What happend to Blu-ray vs. HD DVD format war?
  5. 5. Tomas Edison Menlo Park 1876-1881
  6. 6. Edison Phonograph Victor Talking Machine’s Victrola
  7. 7. Enrico Caruso 1873-1921
  8. 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. 9. Edison Phonograph Victor Talking Machine’s Victrola
  10. 10. VisiCalc
  11. 11. Technological change is relatively easy
  12. 12. It’s the social, organisational and cultural change that is hard
  13. 13. Technology Adoption Life Cycle - The Law of Diffusion of Innovation Diffusion of Innovation
  14. 14. Technology Adoption Life Cycle - The Law of Diffusion of Innovation TECHNOLOGY CONSUMER
  15. 15. 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
  16. 16. 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
  17. 17. Technology Adoption Life Cycle - The Law of Diffusion of Innovation WHY VISIONARIES
  18. 18. Why is Apple so successful when other companies fail?
  19. 19. APPLE WAS IRRELEVANT AND 
 ALMOST BACKRUPT IN 1997 IN 2012 IT WAS THE MOST 
 VALUABLE COMPANY 
 IN THE WORLD
  20. 20. image:  cultformac
  21. 21. AAPL Apple stock from 1997 to now
  22. 22. Brain NEO CORTX: RATIONAL, 
 ANALITICAL THOUGHT, LANGUAGE REPTILIAN: INSTINCTS, 
 HUNGER, DANGER LIMBRIC SYSTEM: FEELINGS, TRUST, LOYLTY, BEHAVIOUR, DECISION MAKING
  23. 23. Start with Why: How Great Leaders Inspire Action
 Simon Sinek
  24. 24. FORMULA FOR SUCCESS? ! 1. Strong funding 2. Right people 3. Market conditions Is this all it takes?
  25. 25. Samuel Pierpont Langley
  26. 26. Technology Adoption Life Cycle VISIONARIES
  27. 27. Crossing the Chasm The  change  in  customers  as  technology  matures   Crossing  the  chasm  –  or  the  Tipping  point   Source:  Geoffrey  A.  Moore:  Crossing  the  chasm
  28. 28. What triggers the tipping point?
  29. 29. 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)
  30. 30. Apple  iPod  Sales
  31. 31. Anderson’s Grand Unified Theory of Technology Trends
  32. 32. 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
  33. 33. Waiting in line…
  34. 34. NEXT BECOMING INVISIBLE
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