There are times when an organization is presented with an innovation opportunity from outside the Corporation. This can also occur internally when a person or a team comes up with a new idea and presents it to management for consideration. In such cases it is useful to quickly understand where the project or idea stands in its journey from birth to maturity. A quick way to assess such projects is to first assess which part of the market (from a maturity standpoint) would be targeted upon product or service introduction.
Using the “Adoption Cycle” figure, the market segment that the product or service will target upon introduction can be categorized. It ranges from Innovators who are willing to take risks and adopt technologies that may ultimately fail. Innovators are followed by Early Adopters who also adopt technologies early, but they are more discerning than Innovators in their adoption choices. The Early Majority will adopt an innovation after significantly longer times than Innovators or Early Adopters. They wait to see if the technology really works and is reliable before buying. It was Geoffrey Moore who described the distance between the Early Adopters and the Early Majority market as a “chasm”. The Late Majority segment is even more skeptical and adopts innovation only after the average customer has already purchased it. Laggards are the last group to adopt an innovation. These individuals typically have an aversion to change.
Really new ideas should be tested with Innovators and Early Adopters. This is because these people are happy to take risks with early versions of a product and are more than happy to give feedback. There is also less brand reputational risk for a company if it starts working with Early Adopters before targeting the main market. After testing and obtaining confirmation that the products really work, the products can then be taken to scale via the Early Majority. During this phase is the opportunity to chance to test the growth engine and traction metrics. When the Late Majority starts using the product you’ve achieved scale. It is now time to think about renewing the business model and refreshing the product line.
So if a company is presented with an opportunity for new product, thinking about which of these market segments is the target can easily segment the opportunity, thus framing the resources needed for its commercialization.