The Law of Diffusion of Innovation

• 2.5% of our population are our Innovators
• 13.5% of our population are our Early Adopters
• 34% of our population are our Early Majority
• 34% of our population are our Late Majority
• 16% of our population are our Laggards

We all sit at various places at various times on this scale, but what the law tells us is that if you want mass market success of mass acceptance of an idea you can not have it until you reach the tipping point between 15% — 18% of market penetration, and then the system tips.

So, it is that little gap that you have to close between the early adopters and the early majority as Geoffrey A. Moore calls “crossing the chasm” which focuses on the specifics of marketing high tech products during the early start up period.

If a company can create enough momentum then the product becomes the standard. However, Moore’s theories are only applicable for disruptive or discontinuous innovations. Adoption of continuous innovations (that do not force a significant change of behavior by the customer) are still best described by the original technology adoption lifecycle.

Disruptive innovation, is a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.

What makes for a disruptive innovation?

Disruptive make good products better in the eyes of the existing customer. These increments can be minor advances or major breakthroughs, but they all enable companies to sell more products to their most profitable customers.

Uber is often mistaken to be a part of this disruptive innovation theory, but let’s take a closer look. Disruptive innovations are made possible by either low-end footholds or new-market footholds. Low-end footholds try to provide their most profitable customers with ever-improving products and services, and pay less attention to less demanding customers. This then opens the door to the “disruptor” on providing low-end customers with a good enough product.

In new market footholds, disruptors create a market where none existed. They find a way to turn non-customers into customers. Take a look at Xerox — they first targeted large corporations and tried to offer the performance that those customers needed. In the late 1970s, personal copies were introduced, offering an affordable solution to small businesses and individuals — a new market emerged. Over time, the personal photocopier gradually built a major position in the market that Xerox valued.

By definition, Uber did not originate in either one. Uber, arguably has increased total demand, that is what happens when you develop a better and less expensive solution. However, disruptors start by developing a less-expensive solution to a widespread customer need.

Disruptive innovations don’t catch on with mainstream customers until quality catches up to their standards.

Disruptive innovators are typically considered inferior by most of a company’s customers. Typically, customers are not willing to switch to the new offering merely because it is less expensive. Instead, they wait until the quality rises enough to satisfy their needs.

Once this has happened, they adopt the new product and happily accept its lower price.

“According to Simon Sinek’s law of diffusion of innovation, the first 2.5 ….” https://www.coursehero.com/tutors-problems/Psychology/11671579-According-to-Simon-Sineks-law-of-diffusion-of-innovation-the-first-2/. Accessed 7 Apr. 2019.

“Crossing the Chasm — Wikipedia.” https://en.wikipedia.org/wiki/Crossing_the_Chasm. Accessed 7 Apr. 2019.

“Disruptive Innovation — Clayton Christensen.” http://claytonchristensen.com/key-concepts/. Accessed 7 Apr. 2019.

“What Is Disruptive Innovation? — Harvard Business Review.” https://hbr.org/2015/12/what-is-disruptive-innovation. Accessed 7 Apr. 2019.