I’m speaking at the Web 2.0 Expo that is being held in NYC this week. My session is in the strategy stream and is titled “The Real, Long-lasting (and Negative) Impact of Web 2.0 on Technology Adoption.”
There are three pieces to the session: web 2.0 trends that have impacted technology adoption; the impact of those trends; and finally, ways to adapt and succeed in this new world.
Here’s some exploratory thoughts on the impact of web 2.0 trends on technology adoption. I’ll post ways to adapt and succeed in this new world following the conference.
photo by thudfactor
The trends of recent years are well known by those interested in the web space:
- Open source software + commoditization of hardware = rise of capital efficient start-ups
- APIs, Cloud Computing, etc. = ability to leverage great amounts of existing innovation
- Tech blogs and aggregators =increased velocity of information
- Rise of read/write web and social features = engaged and networked user base
These trends have fueled a significant rise in the number of web start-ups, catalyzed web innovation, and have driven rapid growth for firms that found product/market fit first.
Great things, all of them. But these trends have also had a negative impact on technology adoption. In order to examine the impact it’s important to understand the system that’s changing.
The Traditional Technology Adoption Strategy:
In his seminal book, Crossing the Chasm, Geoffrey Moore outlined a strategy for commercializing new technologies based on the technology adoption lifecycle model. According to Moore, the phase where most new technologies die is in the chasm between early adopters and the early majority.
Moore’s strategy involves focusing on the current customer group and leveraging success in order to penetrate into the adjacent, larger market. Specific focus and investment must be made during the early adopter phase to mature both the product and the pitch in order to traverse the chasm.
This strategy, with its emphasis on investment into the early adopter community, has been utilized by entrepreneurs as a commercialization playbook for over a decade. However, given the recent trends in web 2.0, the strategy is starting to fall short.
How Recent Trends Impact Technology Adoption Strategy:
The same trends that have fueled web innovation in the past few years have also had a negative impact on both technology adoption and the effectiveness of Moore’s strategy. Let’s examine each trend in turn:
- Rise of capital efficient start-ups: the falling cost of starting a business has resulted in an explosion of start-up activity. More signal. More noise. And it’s increasingly difficult to separate the wheat from the chaff.
- Ability to leverage existing innovation: tapping into third party innovation has created giant shoulders to stand on. It has also created a bevy of single-feature, copy-cat companies that lower the signal to noise ratio.
- Increased velocity of information: information flows across the early-adopter community at a previously unheard of speed and frequency. Rising above the noise and getting noticed is an ever increasing challenge.
- Engaged and networked user base: user generated content and network effects introduce switching costs and lock-in effects that are unrelated to – and are often not impacted by – technology advancement.
The increasing number of web companies, the velocity and frequency of start-up information, and the cost of switching from existing services have made it difficult to acquire the attention of the early adopter.
The increase in the number of copy-cat companies and single-feature technologies that exhibit minimal innovation have made it difficult to retain the attention of the early adopter.
And, in what I call the web 2.0 adoption paradox, the simplicity required to maintain the attention of the early adopter is often the barrier to acquiring their attention while the innovation required to acquire their attention is often the barrier to retaining their attention.
The chasm has moved down the adoption curve.