L06 Diffusion of Innovation

LECTURE L07DIFFUSION OF TECHNOLOGY

Installation period Deployment Period

Institutional recomposition

Deg

ree

of te

chno

logi

cal m

atur

ity

and

mar

ket s

atur

atio

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timeCrash 2000-2008Big bang Intel 4004 1971 Next big bang

Techno-economic split

IRRUPTION

Financial Bubble Time

FRENZYGolden Age

SYNERGY

MATURITY

Source: Carlota Perez

INSTALLATIONPERIOD

TURNINGPOINT DEPLOYMENT

Age of Information 1971 Internet mania and

financial casino2000 & 2008

The Industrial Revolution 1771 Canal mania 1793-97 The Great British Leap

Age of Steam and Railways 1829 Railway mania 1848-50 The Victorian Boom

Age of Steel and Electricity 1875 Infrastructure

bubbles 1890-95The Belle Époque (Europe)

Progressive Era (USA)

Age of Oil andAutomobile 1908 The Roaring

Twenties 1929-33 & 43 Post-war Golden Age

The New Golden Age?

Source: Carlota Perez

Technological Revolution

Current Events

LECTURE L06DIFFUSION OF TECHNOLOGY

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

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

Phonograph conclusion:

Customers wanted music by their favourite singers - the stars

Disk are more convenient

Porn Industry

Licensing Issues

Betamax standard tape was 60 minutes while VHS was 2 hours

Betamax conclusion:

Customers wanted to record and/or rent movies

Legal issues also played some part

And the Porn Industry was forced to adopt VHS

Development started 1978

Release 1983

Sold 100.000 machines

Featured preemptive multi- tasking OS with Graphical User Interface

Lisa conclusion:

The vision was right

Technology just was not there

Too many features

Customer Motivations

Customer are not always buying products for the reason the inventor thinks

VisiCalc

Technological change is relatively easy

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

Innovations that will transform the world

Self-driving car

Personal Robotics in Factories

How does new technology diffuse into a market?

Technology Adoption Life Cycle - The Law of Diffusion of Innovation

Diffusion of Innovation


TECHNOLOGY CONSUMER

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


In the early days THEY BUY FOR THE

WHY

In the later days THEY BUY FOR THE

WHAT



VISIONARIES

WHY

Why is Apple so successful when other

companies fail?

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

image:cultformac

AAPL Apple stock from 1997 to now

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

Exactly

BrainNEO CORTX: RATIONAL, ANALITICAL THOUGHT, LANGUAGE

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

REPTILIAN: INSTINCTS, HUNGER, DANGER

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

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


VISIONARIES

WHY

Source:GeoffreyA.Moore:Crossingthechasm

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?

Applesaiditsoldarecord22.7millioniPods,whichcommandsa70%shareoftheU.S.marketformusicplayers.(source:LAtimes)

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

Apple iPod Sales

Anderson’s Grand Unified Theory of Technology Trends

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

NEXT

Becoming invisible

L06 Diffusion of Innovation

Technology

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