RIP Crossing the Chasm

On the Value of Being Early

When a new technology arrives, it percolates through the culture over time. The people who engage with it first have a very different experience from those who wait. This is called the Technology Adoption Cycle.

The first users (Early Adopter or Innovators) always get a disproportionate share of the value created by the technology. It’s easy to understand. In sports, when a new tech emerges, the people who use it first gain a tangible competitive benefit.

Think about basketball shoes, competitive apparel, supplements, indoor stadiums, statistical Analysis, Safety Equipment). Early users get a distinct competitive advantage over nonusers. Once everyone is using the new tech, that competitive advantage disappears. Everyone is the same.

Geoffrey Moore, in his seminal “Crossing the Chasm” , outlined six stages of the adoption process. From earliest to latest with a note about their puchasing behavior…, they are:

·      Innovators – 2%...the first on the scene, looking for novelty = Qualitative assessment -> very high returns

·      Early Adopters – 15%....follow innovators to gain advantage = Qualitative assessment -> very high returns

·      The ‘Chasm’ –  the gap between the way the first and second group view the world

·      Early Majority- 34% …Quantitative assessment  …ROI calculation with data from group 1 -> high but predictable returns

·      Late Majority = 34% … Quantitative assessment  …ROI but calculated from like businesses -> Modest but predictable returns

·      Laggards – 15%...Join when there is no choice left. Performative Quantitative Assessment -> returns equal keeping up with the status quo.

Each group thinks differently about the relationship between risk and return. The longer you wait to adopt the technology, the lower your risk and your reward. The ‘early birds’ catch the worm. The late comers peck at seeds.

The model itself is over 35 years old. In that time, the length of the adoption cycle has been shrinking rapidly. It took 35 years to reach full market adoption with PCs. It took 15 to 20 for the World wide Web. The iPhone took 8 to 10 years. The current AI wave reached 1 billion users in under 2.5 years.

Some fundamental things have changed because of the shortening of the tech adoption cycle.

AI is a jungle of hyperbole, optimistic claims, and unrealistic expectations The flood of Acronyms, Brand Names, Concepts, Use Cases, Hopes, Dreams, and Speculation confuses even the most knowledgeable. Everybody thinks they know what it is and how it works. Much of that understanding is based on a flawed point of view.

This is what happens when the rate of technology adoption accelerates.

The earliest stages of tech adoption resemble the story about the blind wisemen and the elephant (a perennial favorite of mine).

“A group of blind men heard that a strange animal, called an elephant, had been brought to the town, but none of them were aware of its shape and form. Out of curiosity, they said: "We must inspect and know it by touch, of which we are capable". So, they sought it out, and when they found it they groped about it. The first person, whose hand landed on the trunk, said, "This being is like a thick snake". For another one whose hand reached its ear, it seemed like a kind of fan. As for another person, whose hand was upon its leg, said, the elephant is a pillar like a tree-trunk. The blind man who placed his hand upon its side said the elephant, "is a wall". Another who felt its tail, described it as a rope. The last felt its tusk, saying the elephant is that which is hard, smooth and like a spear.” From Wikipedia.

In other words, as we try to understand a new thing, the early going is full of conflicting reports about what it is and what it isn’t.

This is the world of early adopters and innovators. The rest of the crowd, on the other side of the chasm, waits until it is all sorted out. And, once it easy to understand, they make investment decisions with spreadsheets.

That approach (and the entirety of the ‘Crossing the Chasm’ model) depend on there being a long cycle for tech adoption. The idea falls apart when the time to adoption shrinks beyond a certain point. Remember, the web had 20ish years to reach 1 billion users. The iPhone took 10.

With all that time, a whole host of things are possible including clarity about what it is, variations in business model and pricing, familiarity in the culture, and patient decision making for most people. The price falls and quality improves over the course of adoption.

Today, every organization has AI users. Most (depending slightly on scale) have development plans in place. And still there is no real business model and precious little predictability.

So, who gets the value?

It’s beginning to look binary. You are either a part of the steamroller or a part of the pavement. When all adopters are early adopters, all of the gains in efficiency, effectiveness, competitive advantage and reimagining accrue to those who get in early.

And, as you can plainly see, it’s a goldrush.

What happens if you wait?

Not only do you lose the benefits of the new tech, you become a target for the people who go first.

When adoption cycles compress like this, all conventional ideas about risk and return shift. Now the risk for those who wait includes the immediate peril of missing the entire value cycle. While those who jump in have to deal with increased uncertainty and ambiguity, those who wait risk completely losing out.

So, how do you move forward in this environment?

A healthy appetite for learning, mistake making, discovery, and a large dollop of curiosity are the essential elements of survival in this world of exponential change.

It used to be that waiting reduced risk. Now it is the single best way to increase it.