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 buying?

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?

Menlo Park1876-1881

Tomas Edison

Edison Phonograph Victor Talking Machine’s Victrola

Enrico Caruso 1873-1921

Edison’s ideas for the phonograph

1. Letter writing and all kinds of dictation2. Phonographic books, which will speak to blind people3. 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 languages9. Educational purposes10. Connection with the telephone

http://memory.loc.gov/ammem/edhtml/edcyldr.html

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 CONSUMER

Technology Adoption Life Cycle - The Law of Diffusion of Innovation

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

Technology Adoption Life Cycle - The Law of Diffusion of Innovation

In the early days !THEY BUY FOR THE

WHY

In the later days !THEY BUY FOR THE

WHAT

Technology Adoption Life Cycle - The Law of Diffusion of Innovation

VISIONARIES

WHY

Technology Adoption Life Cycle - The Law of Diffusion of Innovation

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

LIMBRIC SYSTEM: FEELINGS, TRUST, LOYLTY, BEHAVIOUR, DECISION MAKING

REPTILIAN: INSTINCTS, HUNGER, DANGER

Start with Why: How Great Leaders Inspire Action Simon Sinek

FORMULA FOR SUCCESS?!

1. Strong funding2. Right people3. Market conditions

Is this all it takes?

Samuel Pierpont Langley

Technology Adoption Life Cycle

VISIONARIES

Source:  Geoffrey  A.  Moore:  Crossing  the  chasm

Crossing the ChasmThe  change  in  customers  as  technology  matures  Crossing  the  chasm  –  or  the  Tipping  point  

What triggers the tipping point?

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)

Apple  iPod  Sales

Anderson’s Grand Unified Theory of Technology Trends

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Theory of Predicting the FutureAnderson’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:

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1. Critical Price 2. Critical Mass 3. Displace another technology 4. Become nearly free

Waiting in line…

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