Why do we need early adopters?

from a movie I watched on Netflix instant. Don't judge me, all right, So let's leads us to a little listener mail. This listener mail comes from Dave from New Hampshire, and Dave says, Hey, guys, love your podcast. I was listening to your podcast about USB FireWire and in the podcast you mentioned the backward compatibility of USB versions. I hear these terms a lot, backward compatibility, upward compatibility, and I'm always wondering what do they really mean? How about demystifying

this topic for me and my fellow loyal listeners. Thanks for all you do, Dave. All Right, Dave, we're not going to do a full podcast on this, we figured we'd answer this question quickly before moving on to the main course. But backward compatibility is a pretty simple concept.

Let's say that you have a device and it runs a certain kind of software, and then let's say that technological advancements and processing power and manufacturing costs have come to the point where you can make a new version of this device that runs new software and can do lots more stuff than the old version can. So let's as a simple example, we'll go with a video gaming console. Will say PlayStation was the original one and PlayStation two

is the new one. So PlayStation two comes out and it can run new games that the old PlayStation can't run well. Backwards compatibility means that the PlayStation two has built in it the ability of playing older games from the PlayStation one right now. People who like technology really tend to enjoy the backward compatibility um model because it means that the stuff they've bought before will still work

on the new stuff they have now. They don't have to keep multiple versions of the same device because the latest one will run everything right right if you especially true uh I think of the video game consoles, because a lot of people fall in love with a particular game, particular build of a game. They're they're uh, you know, we were recently talking about the new version of Civilization, and I know that some people really like Civilization two

and they couldn't stand Civilization three. So people would continue to play the older version of the game, and you know, if their computers wouldn't run the older version of the game, then they would have to either give up the game, or you know, continue keeping their old machine around so that they could continue to play that, or find some sort of emulator that would allow them to play the

old game. That it's really what we're talking about here is the ability to to use older technology using a new device or software model. I mean it really, it can be anything. It's just a general concept. Upward compatibility is kind of similar in the sense that you design something with the idea and mind that future iterations of that device will still be able to run the software you're developing now. So it's it's really it's forethought. You're thinking,

all right, I've built this device. I want to make sure that every device I build in the future will still be able to run the stuff I've got now. In case, people really like it, So it's it's one of those concepts that again is really popular, especially among gamers. You hear whenever a new system comes out that does not support earlier versions. There's a lot of griping and complaining. Nintendo is infamous for this because Nintendo not only will give you a new game system that will require a

new kind of medium, right. You know, you might have cartridges in one system, and then you have many discs in the next, and then slightly different sized media for the for the next one, and they none of them will work on the other machines, so you can't play your older games on your newer machine. Sometimes. Yes, of course,

the we actually is a big step for that. Yes, because I only mentioned that because someone will write in and tell us that you can play GameCube games on the Wii and it will let you download games for the Genesis and older Nintendo systems to right that, Yes, they didn't make a big step in that regardment, right, But if you look at things like the the Nes Super Nes in sixty four GameCube, I mean it's just it's a history of not letting you access that older, uh,

that older product without keeping your older game system around, which just means that you end up getting really cluttered. Yes, so that's the whole backward compatibility upward compatibility issue. And now we're going to move on, and it's kind of a related topic. It's definitely related. We're going to talk about early adopters and why they're important. Okay, then, so first I guess we should, uh, you know, define what early adopter is. It's actually, it pretty much is what

sounds like. It's a person who is someone someone who will adopt new technology before the general crowd does. So it's it's the people who have to have that latest and greatest thing as soon as possible, before it becomes the most you know, commonly owned device out there. So early adopters are the people who moved to cell phones before anyone else did, smartphones before anyone else did. They're the ones who adopted the new form of like DVDs and CDs and and h D DVDs and blue rays. Right.

He Actually the first Uh, if this sounds a little foreign to you, that's because this is not really tech speak. It's what I would consider marketing speak. The first, the first instance I came across of the term early adopter was when I used to work in marketing, and um it actually came and where I came to be aware

of it. From Jeffrey A. Moore's book, which was first published in nineteen anyone called Crossing the Chasm and UH and More comes up with basically five groups of people, the innovators, the early adopters, the early majority, the late majority, and the laggards. Basically, the innovators to the people who are the bleeding edge. As soon as it comes out, they've got to go buy it, the first in line, the first day a brand new product is released. They

don't care about the possible bugs. Um, they don't really care that it may or may not be a lemon or that it may not, you know, take off with the market and there's stuff that comes out that's compatible with it. Um. They just want it and they want it now. And the early adopters followed behind them, but

not too far behind them. These guys, the two groups really make up the the people that marketers have been trying to reach with tech products really probably since UH, since technolog became such a hot consumer thing, and innovators can sometimes get hold of products before they even hit the market. That's true. We're talking about people who are so motivated to get hold of this technology that they form relationships with engineers or companies. Sometimes there are people

who work within a company. For instance, Google is a good example Google. Google does this thing called dog fooding, where they encouraged their employees to consume the same products

that they are building. So for example, the Nexus one, that the Android phone that Google put out on the market, that was a developer phone, that was an in house developer phone before it ever hit the market, and Google engineers had been playing with it for several months before the public ever got a chance to play with it. In a way, the Google engineers were manufactured innovators. You know, whether they had that particular personality trade or not is

beside the point. They actually were using it before anyone else. Uh. And the idea with Google is that you can turn them into innovator types because, uh, they'll if they like the product, they'll go out and they'll talk about it, and then that'll lead to the next round of early adopters. And we should probably give some percentages here because you can think of the whole different classifications as a bell curve.

So on the bleeding edge. You've got the innovators, which make up about two point five percent of the entire market, and then you've got early adopters, and that's an additional thirteen point five percent, so we're still talking about six of the entire market. That's it. You know, everybody else falls into either the early majority, so we're talking about the people who who follow behind the early adopters and buy it, but they're not buying it, you know, right

out of the gate. They're waiting a while to see what the early adopters think. And then you have the late majority. Those are that's everybody else. I would probably fall into that category for most products. And then you've got the laggards, who are the people who they'll buy something once it becomes clear that the stuff they they

own will no longer work for them. Yes, so that these are the people who will eventually break down and buy a cell phone just because everyone else has one and they are, you know there they need one now, Or they'll finally go out and they'll they'll buy a video game system long after it's been off the market because now it's being sold and used game stores and they're like, well, I've always wanted to play this, but I never had the drive to actually go out and

buy one when it was on the market for real zes. Um, go ahead, I'm sorry, And now I was gonna reference back to uh to the chasm here. Chasm for those of you who are unfamiliar with the word are because we do have a lot of people who may not know is a is a gap. So traditionally they're, at least according to uh More's thinking, there is a gap in between the early adopters and the early majority, and the trick for marketers is to get people in the

early majority to buy it. So they want to, the marketers and the product engineers want to cross the chasm between just this small, you know, sixteen percent population of the market to everybody else. And basically they figure, hey, if I can get all these people to take it on and start using it, then they'll start spreading you know, word of mouth. But we have to get people talking

about this thing. Otherwise it's only going to you know, reach the scent of the market and we'll be trying to create a brand new product something else to sell to people. So they want to they want to bridge that gap, and that's where the title of that book comes from and for the most part, you know, it's it's been a pretty it's played out pretty well, pretty true to form. Yeah, what's interesting to me is I

read a some survey results from Roger's Consulting. They they got a famous, uh survey on this back in the eighties and it's still kind of something that holds true today. Uh. They found in their survey that fifty of early adopters held either a master's degree or a PhD. So we're talking about people who have reached a high level of education. Um, they have a lot of They normally have a lot of income they can dispose of. Because that's why the

things about being an early adopters. It means that you're buying the technology back when it first premieres. It's usually when it's the most expensive, and you have to you have to be willing to take a risk. Right, you're going to be investing in a technology. There's no guarantee that technology is going to be successful yet, so you're spending a good deal of money on a product that

may not succeed and may not be supported for very long. So, so these people are are highly educated and they are risk takers and they have lots of money, kind of the people I want to hang out with. Well, it's it's it's very challenging to reach past the early adopter segment for different people, and they're looking at in different ways.

The venture capitalists who are the people that fund brand new companies UM are looking are constantly looking for a way to reach past the early majority because they want to fund stuff that's going to make them lots and lots of money. Now, a brand new startup developer making a software or hardware product is really not concerned with reaching the early majority because they want to read. They

want to reach the innovators. They get them to start buying it, and they have the early adopters start buying it and hopefully after that. I mean, they're not really worried about this. And this is this is actually what I got from reading Alexis Cold's article on Read Write Web not too long ago. But I thought it was funny because we started talking about doing this podcast and he just wrote this this article about it. UM. He

actually used the example of the iPod as something like that. Now, Apple didn't have that same problem because people knew who Apple was. UM. Of course, at the time the iPod, they were still still regaining some credibility after several bad years of products where they were losing market share for the computers. They really didn't have any other consumer like tronics on the market other than the computers at the time, um,

but they had something brand new. They had an MP three player, and they were entering a market that already had other people in it, in the MP three three player market. But what they did, they came up with a pretty product. You know, people pick on Apple for having pretty products, but you know, that helped them cross from the early adopters to the early majority, because that that was one of the things that people liked about it.

That and the fact that it was easy to use, and with each new version of the product that it became more powerful, and that helped them move past the early adopters. One of the things Apple built into the iPod is something that tends to frustrate early adopters, but it's very pleasing to the majority, which is that, you know, you remove a lot of the choice, a lot of the freedom out of your product. So the product works really well, but it works really well in the specific

way and and outside of that specific way. It either does not work well or it doesn't work at all. In other words, you may not be able to use it out side of the way they intend you to use it. And for early adopters and innovators this can be frustrating because they're they're kind of looking for the device that will let them do pretty much anything. The majority they want something that works, and they want something

that works in a specific way. So a music player, they want a music player that's gonna work really well, it's gonna make it easy for them to organize their music. Um, they're not necessarily concerned about customizing that experience or opening it up any They may or may not even be aware of the limitations of the device. Yeah, it just matters that it looks nice and it works. And uh actually Clive Thompson over at Wired had a really good article too. Yeah. I was going to mention that targeting

late adopters. Yeah, and this is one thing that I had not considered before. Um, to go back to Scold's point, another problem is that some people, some early adopters, adopt stuff and give it up before the early majority reaches it. So some things are dying more quickly than others simply because the early adopters tried out they like it, but then there's another new thing that comes out right on its heels and they buy it instead, and so they never the word of mouth never gets going, and they

never really sell a lot of them. But in uh, in Thompson's article, that's a completely different thing. Yeah, I mean it's it's a completely different way of look. He's he's suggesting that by ignoring the laggards, you are essentially counting out of the market, which is a huge number. Yeah, and just adding a few people from the laggards category into the market for your device would really boost sales

quite a bit. And so how would you do that? Well, Thompson's point is that that laggards are not necessarily always laggards. They can leap frog technologies and then not the not the company leap frog, but they actually jump over generations of technologies and then adopt the latest thing once whatever it is they possess is no longer really viable. The example Thompson uses is he says, take a person who

has a walkman, an old Sony Walkman cassette player. Yes, and they're happy with it, and they don't have and they don't see any reason to change from the Sony Walkman until so they skip over the CD revolution. They don't they don't go into CDs, they don't go into the mini discs or anything like that because the Walkman

still works fine. Then eventually MP three players come out, and then you have the person who has the Sony Walkman either realizes that they are hopelessly out of date and they want to catch up, or their device no longer works because the wear and tear is finally worn it down, or if you're talking about cassettes, you can also just make the argument of the formats no longer really supported anywhere. You can't it's hard to get music

on cassette now. So if in that case the laggard will go out and buy something, well, the lagger is not going to go out and buy a CD player or a mini disc playerlagger it will go out and buy an MP three player, which means that temporarily your laggard has switched from laggard to early adopter. So Thompson's point is that people who are in these categories aren't

necessarily always in the same categories. Situation might come up where someone behaves as if they are in the early adopter category when normally they would be in one of

the other ones. So Thompson's point is that manufacturers should try and find ways to market to these people, saying, hey, you know, we know that this product that you have that you love is great and all, but really what you want is this new product because it does all the things your old one does, but it does it better and you've got more options and that kind of stuff. That's the sort of message you need to give to

the Lacquard's Uh. Thompson doesn't really go into detail about how to achieve that, because that's not really the point, the point being that, you know, you can't ignore this segment of the market because that's money gone to waste. I can actually give you a personal example to UM. I we picked up a standard definition television back around two thousand or so. UM that you know, it was much bigger than the one that we had, and we

really liked it. At the time. High definition television is really, really, really really expensive, at least as far as my income was concerned. UM. And then you know, I still consider them somewhat expensive. But it's funny because you know, my wife and I have talked about the possibility of getting a high definition television. Now now that I do tech stuff and I do a lot of research on these things. UM, I've started looking at the ads and going, well, you know,

these high def televisions have a hundred twenty hurts refresh rates. Well, maybe I should wait until the two forty hurts refresh rates are cheap, you know, And it's it's the same. And I actually reading Thompson's article, I saw that in myself, thinking we'll see. Now I'm waiting for the you know

what is currently the uh, the higher standard. Um, I'm waiting for that to come down in price, so you know when I finally do, because my current TV works fine, it looks it looks fine to have a nice signal coming in UM, and I don't have to have high def. So I'm thinking, well, maybe I should wait. And I thought about it, and of course I don't fall true to exactly to to his because then I would have purchased a two forty hurts TV and become an innovator

or early adopter of that technology. But still, I mean, I think there are a lot of people who go, you know, the thing I got works. I don't really need to fork over a couple of thousand dollars for this next big thing that's come out. I'm gonna wait until it comes down in price, and I you know, maybe they'll be even something newer out that I like even better. And that's that's another reason why early adopters

are important. Early adopters will go out and they'll they have the income and the desire to purchase these products, right A lot of them do. Right. Well, if you're an early adopter, you better have the income because you're not gonna be an early adopter for long unless you're an early steeler. You mean, like the people who paid five six hundred dollars for a CD player or or four hundred or six hundred dollars for an iPhone they first came out. It's a good example. In fact, we'll

get into that a little bit um. But early adopters, what they'll do is they'll go out and they'll purchase

this technology. It tends to be pretty high in price, um, but that can give an indication of which technology is going to end up being successful, which means companies can invest in manufacturing processes and bring the cost of manufacture down, which means they can then in turn drop prices without hurting their profit margin too much, which means the rest of us can get our hands on it because we we couldn't afford a CD player when it first came out, but a year and a half or two years later,

the price had dropped to the point where it was now reasonable. Uh. That tends to be the case, but it also means that early adopters run the risk of purchasing a product that never really takes off and therefore never drops in price and and ends up losing support quickly. Uh. Some examples of this with their their tons. I know what you're thinking of first, though, what's that I'm thinking that you're going to the h d DVD route. HD

DVD is a really good example. Beta Max would be an other one, because those two have some a lot of parallels. The HDDVD and Beta max stories. These are two different formats for video. You know, it's video recording and playback. Actually for for Beta Max, technically it's just playback. But at any rate, you would the early adopters went now bought these things, and you could argue that one was better than the other. For example, in Beta max,

it's big component was VH. Our opponent rather was VHS, so you had two different technologies. Early adopters adopted both. VHS ended up being successful. HDDVD you had HDDVD versus blu ray, and blu ray ended up surviving. I was gonna say be successful. But there are arguments now that blue ray. In fact, Microsoft at the time that we're recording this podcast this week and executive over at Microsoft

proclaimed blue ray to be dead. Now, granted, keep in mind that's a Microsoft executive and blu ray is a Sony technology. That that is correct, So you could argue that perhaps they're saying blu ray is dead because they have an interest in blue ray not being around anymore. Yes, but they're not offering a competing technology. They're actually saying that they believe streaming right will take over instead. And that's I'm sure that that is making some people in

the majority and Laggard's pause before adopting blue ray. I'm one of them, someone who has not yet adopted the blue ray format because streaming is a possible alternative, and at any rate, the early adopters who adopted either Beta max or HD DVD soon discovered that their product was no longer being supported by manufacturers, and so you had a very limited library that you could go to, and then you know, it was just taking up space that

There's a huge history of technology that falls into this category. I mean video gaming consoles alone. You heard in our History of Video Games podcast how many old consoles we listed that you may not have ever heard of before because they never took off. You know, the Atari ended up becoming the dominant video game system of the early late seventies early eighties, and the others like Clico Vision UH and in television were able to compete a little bit.

But beyond those three you probably hadn't heard very many of the other names we've listed. Early adopters might have bought them, but the majority never moved to them and they ended up dying. So really, the early adopters are hurting because of that. The other big hurt is when you are an early adopter, you go out and you buy something, and then a couple of months later the price drops dramatically and you think I'm being penalized for supporting this company. Yes, um, And the big example there

would be the iPhone, Apple iPhones. So Apple iPhone when it came out, I think there were two models of four gigabyte, and a gigabyte is four hundred or six hundred dollars. So the early adopters rushed out and bought them, and I just a couple of months later, they dropped the well, they dropped the four gigabyte altogether, and the

gigabyte model I think dropped two hundred bucks. And so the people who early early adopters who went out and bought the phone, we're saying, well, you know, it's a it's a great phone, and I love it, but now I feel like I was an idiot for buying it so early because I spent so much money. And then Apple ended up giving a hundred dollar essentially gift card Apple Card to the early adopters, which helped a little

healed a lot of wounds. At least was saying that Apple was saying, hey, you know what, we appreciate the fact that you supported this product, which you know, our company has never made a phone before, so there's no way of us knowing whether or not it's going to be successful. So that kind of smoothed out some stuff between early adopters and Apple. But that's that's the danger that you run into when you're an early adopter is that you you one, are going to spend more money

than other people in the same product. You're just gonna get it first and to it may not succe. The product may not succeed, and so you may end up with a useless hunk of electronics. Uh and some people. There's been a lot of interesting discussion about why people are early adopters. I mean, there's the whole love of technology, but there's also an element of status that comes with

being an early adopter. So if you ever have known someone or if you happen to be this person, the person who casually leaves out a new cool device that's in view, you know, not necessarily pointing it out, but leaving it so that it's easily seen so people are like, hey, that's really cool, then you might fall into that category.

For example, if you're one of those people who happens to have an iPad and you leave it out on your desk so that every single time someone else has to walk by your desk in order to get to his desk, he sees the darn thing. Maybe you fall into that category just a little bit. I get your point. I'm not pointing fingers. I'm just being awfully specific. Yeah that that that actually, you know, especially since I'm conscious

of people saying that about Apple's prought. You know, I was kind of thinking about that when I when I got the iPad, because that's not you know, at least consciously. I I try to avoid doing that, but you know, I have no idea whether subconsciously I'm trying to show off to other people. But yeah, for some people, they do. They make a great big deal out of it. Um and uh, you know that that's that's all part of

why people might want to do that. I'm thinking of a certain uh infamous venture capitalist and his uh, his tesla. Oh yeah, that's true. That Yeah, that is a pretty uh that's a pretty expensive piece of Technolog's a double because it's a car, which has always been seen as a status symbol, true and technology which is you know, more of a recent development. Yeah that that that's true.

It's uh, it could be early adopter, could be just about it could be almost any kind of technology, not just a piece of computer or electronic equipment or um. You know. Actually, I've always heard that it's sort of a bad idea to be the early adopter for a lot of car models because there are bugs that that can be a problem. Actually, I was one of the first people to UH to buy an iMac, the very

very first iMac. I was there on the day they opened the store, the first day that you could buy when it was their inline and UH at that point and tells USB technology. That was the first Mac to embrace USB. And I had a lot of problems getting USB to work correctly because there weren't drivers available. Drivers are the the piece of software that basically allows one piece of electronic equipment to interface with another. For example,

in this case, a computer and a printer. I bought a USB printer for it, but you know, I had trouble at the very very outset trying to get it to communicate with it because there just weren't a lot of It had difficulty with the USB interfaces on and off. It wasn't just that I had a game pad that I bought for it, which most of the time it didn't really have a problem with, but sometimes it did.

And I know that in later iterations, and of course now USB is ubiquitous on on just about every kind of computer that at least that has some kind of external port right. Um, but yeah, that that happens a lot with all kinds of early adopter technologies. You may

find that the market isn't ready to support you yet. Yeah, and this does go beyond just the physical hardware and software is the same way, like, if you're one of the people who loves to try beta programs and you're an early adopter, you're an early adopter of software, not necessarily hardware. Uh. And I fall into that category. I mean, I'm whenever Google Chrome comes out with a new beta, I'll tend to try it out. Uh. And you know

that's I don't think anything more of that. That then, I don't really think of as a statis symbol because it's not like I'm walking around to people saying, hey, look, I have the latest Google Chrome build on my computer. But I have been guilty of other ones where like, you know, I'm with a group of friends, I'm thinking, you know what I'm gonna do, I'm gonna whip out this Android phone because it's awesome. I don't do that anymore because it's two years old, so it's no longer

really on the cutting edge. But you know, yeah, to your to your point, I'm made a testing a game right now, um that I've reached a certain point in the development of the character. I created my character, and I'm playing through the game, and there's a point at which you're supposed to do something to take the step to achieve the next level. And they're saying, okay, you have to choose from these different paths, which one will

you choose? Well, when I chose the path, you know, I spent hours developing this character and building up his his gear and all this stuff, and I chose a path and it's like, well, okay, sorry, and now I've I've reached the point where it didn't take right as it's supposed to in the game, and I can't actually go forward with the character now and develop it further because there's a bug in the game that won't let you continue. So now I've wasted Well, depends on how

you look at it. I've spent a lot of time developing this character. And because I am trying, I'm actually an innovator in this case, because I'm beta testing this one where and I can no longer develop this character that you know, sort of poured hours of digital blood, sweat and tears into developing. So that's that's a peril that you run into. But I, well, actually I don't

get to brag about it because I signed a nondisclosure agreement. Well, at any rate, you get to experience it before anyone else, that's true, and it's it's been a lot of fun doing that, so you know, there are trade offs. Yeah, So anyway, early adopters are important. They will continue to

be important. They're the ones who are going to really kind of drive the way consumer technology goes because you know, if the early adopters go after it and convince the majority to go after it, that's what we end up seeing available available in stores, you know, and the stuff that early adopters go after one year are going to be the things that go on sale on Black Friday and Cyber Monday the next year. So that's uh, you know,

kudos to you early adopters. I wish I could also ignore risk, and I wish I also had the the disposable income that you have. Uh, right now, I just ignore risk, which is not good when you don't have disposable income. I don't see how you could ignore risk, it's such a good game. And on that note, let's close this off. Remember if you want to give us any comments, questions, you've got topic suggestion, let us know

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