Technology Adoption - How Technology Markets Evolve

When trying to promote an innovative technology, it is essential to understand how people integrate technology into their lives, as this drives market growth.

Established markets resist change. In 1900, many people owned horses and buggies. Numerous technological innovations require individuals to alter their behavior to embrace the benefits of the applied technology. Markets don’t grow until people believe the potential advantages of the new technology outweigh the risks and effort of change.

The more “discontinuous” an innovation, the longer it takes for the market to adopt it. Discontinuous innovations are new ideas, products, services, etc., that require us to change our existing behavior to something entirely new and different – the car, telephone, or computer. In contrast, continuous innovation doesn’t require a change in behavior, as it is merely an improved way of doing what we’re already doing – the automatic gearshift, mobile phone, or the next generation ChatGPT and Artificial Intelligence - With ChatGPT, we find ourselves in the midst of a technological revolution these days. Many people are oblivious to it. For instance, my wife, who isn't very tech-savvy, has no idea how crucial these years are for the future of the next generations. Artificial intelligence is here, many will lose their jobs, and new technologies… of word processing programs. A new technology representing a discontinuous innovation has the highest potential to create wealth, but it’s also the most challenging type of innovation to market, as it means you have to persuade people to change their behavior dramatically.

The laws of physics teach us that overcoming inertia requires a lot of energy. Human inertia is what keeps individuals from adopting your new technology. It takes a lot of energy to get people to change their behavior. So, if you want to sell into an early market, you need to identify and leverage market power.

S-curve Adoption Theory helps determine who will adopt when, allowing you to focus your sales efforts and harness the energy generated by market growth. It also helps you find new opportunities and approach prospects before your competition does.

S-curve adoption theory has three principles:

Innovations typically move slowly into niche markets before mushrooming into the mainstream. Early markets often develop slowly – the more “discontinuous” the innovation, the harder it is for people to figure out how to apply it. The car took around 25 years before it became widespread.
It usually takes the same amount of time for a product to reach 10% acceptance as it does to reach 90% acceptance. Widespread market adoption generally occurs very rapidly. Between 1914 and 1928, household adoption of the car grew from 10% to 90%.
When a new technology reaches 50% market penetration, it begins to noticeably impact the economy and productivity. Driven by the incredible efficiency of the assembly-line revolution pioneered by Henry Ford in 1914 and by installment financing provided by General Motors in 1920, the broad-scale adoption of the car fueled the thriving economy of the Roaring Twenties.

Since innovation markets tend to consolidate as they grow, early market share is crucial for the long-term viability of the solution and your company. As technologies mature, the market tends to weed out most smaller players in favor of one or two major alternatives. This helps standardize the market, making using the technology much simpler. Once the market has chosen a leader – Microsoft Office, Cisco Routers, Apple iPhones – it becomes nearly impossible to unseat them. The benefits of market leadership include longer product lifecycles, repeat business, and economies of scale, all of which serve to reinforce their market dominance over time.

Manuel Marino

Manuel Marino is a seasoned Senior Producer, Music Composer, and Artist with over a decade of experience. He specializes in branded entertainment across various mediums, including video games, films, and advertising campaigns. With 20+ years as a game music composer, Manuel has worked on numerous platforms, creating diverse orchestral soundtracks. HIRE ME