Wharton Chapter 6

Chapter 6 is entitled 'Assessing Future Markets for New Technologies. Another possible title could be 'Telling Your New Product's Future' or 'Teal Leaves and Emerging Technologies'. After all that is what you are trying to do, see into the future for a product that may not quite exist yet for a market that does not exist yet because the customer doesn't know about them yet. As chapter 6 tells us though it is not as bad s it may seem at first.

There are three approaches explained to us in the book. First is diffusion and adoption. You can think of this a how fast the new technology will be adopted, if at all. Second is exploration and learning. You can think of this as learning lessons from presenting successive versions of your product and using the knowledge to improve the next version. And third is triangulation for insights. You can think of this as using imperfect market research to converge on a more likely conclusion. As the books says, these are useful assessments of future markets for emerging technologies when uncertainties are intolerably high.

Production adoption rates are related to; perceived advantages of the new product, the perceived risk associated with adoption, the barriers to adoption and opportunities to learn about and try the new product. The perceived advantages are the main driver among the four. Stimulants to more rapid diffusion according the the book are; innovation, price and education/access. The rate of adoption will follow a normal distribution with early adopters and laggards 2 standard deviations from the mean and early and late majorities one standard deviation from the mean. Different strategies are needed for the 5 different segments, innovators, early adopters, early majority, late majority and laggards.

Exploration of markets, as described by the book, involves asking the following questions; What are we trying to learn about? What decisions have to be made? And what alternatives should be considered? These questions should be used to prevent poor decisions, not to justify decisions that have already been made. Once these questions have been asked then data needs to looked at to try and see patterns. This knowledge, once gained, should be retained within the organization.

Triangulation of insights is using some less than perfect market analysis tools to try and gain some insight into the developing market. More than one of these tools should be used to see if a convergence point can be reached. Using multiple methods takes some of the risk out of using these less than prefect methods. Some methods include learning from lead users, learning about latent needs but problem identification story telling and observation.