This document summarizes a lecture about the diffusion of innovation. It discusses how new ideas are developed through collaboration and exchange. It also discusses how innovations diffuse slowly at first, gaining momentum over time as they are adopted by pragmatists and conservatives seeking convenient solutions. The rate of adoption follows an S-curve, with innovators and enthusiasts driving early adoption and the mass market adopting later. Customers' motivations for adoption change over time, initially valuing the innovation's benefits and later valuing its functionality. Factors like network effects, convenience, and compatibility influence adoption rates.

1. LECTURE L06
DIFFUSION OF INNOVATION

2. Innovation
Innovation is the change in
technology
New ideas built upon existing things
Usually happens with collaboration
and exchange of ideas

3. The Liquid network
A good idea is a network.
Innovations happens with
collaboration.
— Steven Johnson

4. Slow Huntch
A lot of ideas linger on,
sometimes for decades,
in the back of people’s
minds
— Steven Johnson

5. Serendipity
Sometimes ideas come
when people are not
looking for them

6. Current Events

8. 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
Example Products

9. Menlo Park
1876-1881
Tomas Edison

10. Edison Phonograph Victor Talking Machine’s Victrola

12. Enrico Caruso
1873-1921

13. 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

14. Edison Phonograph Victor Talking Machine’s Victrola

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

16. Porn Industry was forced to adopt
rival VHS standard
Licensing and legal issues
Betamax standard tape was 60
minutes while VHS was 2 hours
Customers wanted to record and/
or rent movies
Betamax conclusion:

17. Development started 1978, release in
1983
Sold 100.000 machines
Featured preemptive multitasking OS
with Graphical User Interface
The vision was right
Technology just was not there —
Adjacent Possible
Lisa conclusion:

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

20. VisiCalc

21. Technological change is relatively easy

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

23. Innovations that will transform the world

24. Self-driving car

25. Personal Robotics in Factories

26. Drone Taxis

27. How does new technology diffuse into a market?

30. The Law of Diffusion of Innovation
Diffusion of Innovation

31. TECHNOLOGY
CONSUMER
The Law of Diffusion of Innovation

32. 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
The Law of Diffusion of Innovation

33. In the early days
THEY BUY FOR THE
WHY
In the later days
THEY BUY FOR THE
WHAT
The Law of Diffusion of Innovation

34. VISIONARIES
WHY
The Law of Diffusion of Innovation

35. Lecture Exercise L06 - B
I EA EM LM L
1. Self-driving car
2. Drones
3. Home Robots
4. iPod
5. Assistant speakers
6. Digital cameras
7. Smart doorbells
8. Ride Service (Uber etc)
9. E-Scooter service

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

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

39. image: cultformac

40. AAPL Apple stock from 1997 to now

41. 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

42. The Triune Model
Simple model set proposed by physician and neuroscientist
Paul D. MacLean in the 1960s
The model is controversial and has been criticised for
simplifying the complexity of the brain
However, the model has gotten much attention and is a
useful way to think about people’s behaviour

43. The Triune Model
Logical (Neo Cortex):
Rational, analytical
thought, language
Emotional (Limbric System):
Feelings, trust, loyalty, behaviour,
decision making
Primal (Lizard):
Instincts, hunger, danger
The brain has three parts: Primal, Emotional and Logical

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

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

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

47. Samuel Pierpont Langley

52. VISIONARIES
WHY
The Law of Diffusion of Innovation

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

54. What triggers the tipping point?

55. 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)

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

58. Apple’s iPod Sales

61. Anderson’s Grand Unified Theory of Technology Trends

62. 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

63. NEXT
Becoming invisible