For every iPod, iPhone -or now, perhaps, iPad- hundreds of new technological products don't quite make it. What separates the winners from the also-rans? Scholars at ParisTech and the Wharton School in Philadelphia who have studied technology adoption say a variety of factors determine whether a product becomes a hit- and that with digitalization, the process is becoming more complex all the time.
As the rollout of the new iPad suggests, Steve Jobs has a knack for making the technology adoption process look simple: invent something that looks great, tell everyone how great it is, then wait for the world to beat a path to your store.
Of course, Jobs only makes it look simple. For every iPod, iPhone - or now, perhaps, iPad - hundreds of new technological products don’t quite make it. Even the Apple CEO has had his off days.
What separates the winners from the also-rans? Scholars at ParisTech and the Wharton School in Philadelphia who have studied technology adoption say a variety of factors determine whether a product becomes a hit – and that with digitalization, the process is becoming more complex all the time.
A lot depends on the team – and not just in terms of their technical expertise. The slightly wild-eyed look of the engineers interviewed in the recent iPad demo commercial isn’t unusual. Annie Gentès, Maître de conférence à Télécom ParisTech, says she finds that the best inventors are almost always passionate about their project. “People who invent things, they have to be optimistic. Otherwise, they stop,” she says.
Often, ideas get lost, however, because there is no one to sell the significance of an invention to a wider audience. It frequently takes the help of designers and other people with non-technical expertise to help translate an innovation into a marketable product.
Gentès, who works with a team of designers and new media scholars to help find applications for the ideas cooked up by ParisTech researchers, says this translation is a complex process.
First, she says, they talk to the inventors. “We question them about how they feel, their values, because it’s a very important thing to know that, to know. These technologies are already imbued with a certain number of values from these guys,” Gentès says.
It’s not always easy. Often they’re trained only to write about the technical side of their invention, not the dreams that led to the work. “You have to help them say what they think about their own technology and the values and even their readings, the books they read, the fiction that inspire them,” she says.
“Most of the time when you start a project you can see that they have been inspired by a few important books, or movies, and that really drives the technology,” she says.
Next, she says, they try to find correspondences between the inventor’s imagination and what is going on in the culture. “We take into consideration what people already do, how people react to cultural products and not only interactions, but really, images, art, movies, fiction...you name it, because this is part of the whole picture.”
They ask, she says, “what do people already do? what do people already imagine? what is going on in fiction? what is going on when people interact together, and how can this inspire our own product and make it more desirable in the big world?”
The goal, in the end, according to Gentès, is to uncover desires in the culture connected to this new concept. “Desire is not about, am I going to be quicker to solve this problem? Yeah, of course, this is desirable. But most of the time, it’s something a bit different....there is a story at the beginning of an invention,” she says. Understanding that underlying story can help identify applications, and bridge the gap between the technology and society.
More prosaically, finally, they look at what is already out in the world related to the invention, and then try to develop scenarios for its use.
Yet even executing this stage perfectly is not enough to guarantee success. “There are commercial interests and people who have more power who will push one technology and not the other one,” says Isabelle Demeure, a professor of telecommunications at ParisTech. “It’s much easier probably if you’re Microsoft or today if you’re Google to adopt a technology and push it than if you are a very smart startup – you don’t have much power.”
Standards-setting committees, for example, tend to be dominated by big players, who can shape standards to suit their own purposes, says Isabelle Demeure, a professor at ParisTech. “You have people who fight against ideas that they don’t think are good ideas but they also are probably very strongly influenced by the company they belong to,” she says.
“In the end what will be in the standards depends really on the actors, the effort you put in it, the money you had to send people to the meetings, the lobbying that could be done,” she adds.
Other industry relationships can matter as well. Often, what economists call a two-sided market is necessary for an innovation to take off. Consumer preferences matter, but in some innovations such as the iPod, Apple’s success in getting record labels to sign on with the iTunes store helped make the iPod a “killer app.”
The final act belongs, of course, to marketing to fickle consumers – a complex business that is growing more complicated even as scholars’ understanding of the process deepens.
There is a long-established body of theory around how innovations become broadly adopted in the market. Over 50 years ago, Everett Rogers studied the way new ideas came to be adopted by networks of people and found that diffusion of innovation went through distinct stages, regardless of whether he was following physicians in Iowa or farmers in South America.
More recently, the theoretical models have grown more complex. In his recent book, The Tipping Point, Malcolm Gladwell popularized the idea that the behavior of a tiny key group of influential people can lead to huge swings in behavior, almost overnight.
Jacomo Corbo, a postdoctoral research fellow in operations and information management at Wharton, says that viral marketing budgets now exceed $1.6 billion – and are growing by 30 percent a year. Often, product launches are designed to include a viral element. Google, for instance, used this idea in its roll-out of gmail.com, by making the first use of Gmail an ‘invitation only,’ according to Corbo.
Pricing is another important element in encouraging adoption of a new technology. Often, early adopters are charged more. Beyond maximizing the price, a high price is used to raise the perceived value of the product, encouraging particularly influential users and sometimes raising its cachet.
For other technologies, however, a low price – or even no price – is sometimes used to try to encourage adoption. Two-sided markets, such as video game systems, may be particularly prone to this kind of low-cost pricing, because the gains to the company are so much greater if it can become an industry standard. A gaming platform, for instance, will be wildly more valuable to developers if it has a huge user base than if only a few people have adopted it, making it in the game box manufacturer’s interest to distribute the box as widely as possible.
Apple often uses prices in just such a strategic way. In the U.S., the new iPad is priced at $499, putting it within reach of Amazon’s Kindle – exactly the kind of play you would expect in a battle to become the dominant e-reading platform.
In China, however, the Cupertino company is taking a different tack. The iPhone has a very high price there, Corbo notes, which helps reduce supply chain problems, and at the same time, may improve its standing among influentials.
One factor that will undoubtedly further complicate these strategies in the coming years is that it’s not only diffusion that is viral now – the inventions are too. Now that more and more companies can watch their customers in real time, offerings can be adjusted almost on the fly. Google, for instance, always releases its systems in beta, Corbo says, and then makes changes at it receives feedback.
In the end, however, why a particular invention succeeds is still a mystery. “Of course there are recipes,” Demure says: “involve designers involve people from different fields, involve groups of users as you are proceeding and designing the services and the technologies behind them. But there’s always a surprise.’
Demeure recalls one day about ten years ago when she heard some computer scientists from her department come back from a demonstration they had seen at one of the main European operators.
“They came back and they were joking about one of the presentations that was made. `You know what they have invented? They have invented this application – you use a phone to send a text message.’ And they thought this was so stupid. I remember that during the lunch, they were laughing about that.”