Thursday, December 11, 2008

When to Buy In

To continue from yesterday's post...

Ideally, you should always avoid the bleeding edge. Unless you know the product, the manufacturer and you stand to gain a significant competitive advantage from the new technology, you should always wait till the Early Majority stage to buy into new technologies.

By this point in the Technology Adoption Lifecycle the costs of the technology have dropped from their high levels. Since the Innovators and Early Adopters have absorbed the research and development costs, the manufacturer can drop prices to encourage the Early Majority to buy in. So, you can pick up the same (or better) product for a discount.

Usually by this point in the curve, the manufacturer has had the opportunity to release a few updates or has made necessary corrections. These repairs can be a huge benefit to you and your business since you won't have to shoulder the hidden costs associated with working around unforeseen problems. Typically, by this stage in the lifecycle curve, most manufacturers have also included a few new features to "sweeten the deal." While these new features may have problems, you can rest assured that the nastiest surprises have been settled.

Typically, by the Early Majority stage, the company has enough customers to ensure its survivability. Because the Innovators and Early Adopters have provided a financial foundation, the company will probably survive to continue supporting and developing the technology. While this is still no guarantee against mis-management and other causes of business failure, at least you know they won't go broke because their product doesn't have a wide enough customer base.

By settling comfortably in the Early Majority stage of the adoption lifecycle you can avoid all the risks that the Early Adopters and Innovators have to bear. This stage of the curve also ensures that you will have access to better quality technologies which have been rigorously consumer tested. Plus you will also have the peace of mind that comes from knowning the company you have purchased from will be around for the foreseeable future. The most important benefit, however, if the Early Majority still benefits from new technologies without shouldering the associated risks.


Continued: Laggards Are Losers

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