In 1962 the sociologist Everett Rogers published the well-known book Diffusion of innovations in which he classified consumers into the following five groups: Innovators, Early Adopters, Early Majority, Late Majority, and Late.
Since its inception, the above graph has been widely used in many industries, although new technologies have better synthesized that research. The graph perfectly describes how the psychological profile of each group reflects consumer habits and how they approach innovative products and services. One of the most important areas to highlight is the clear breaking point known as the abyss.
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Consumer preferences vary widely
This gap between early adopters and the early majority exists because consumers prefer to listen to and copy references from their group. This leap represents the transition to a conventional market and has many similarities to the current life cycle of cryptosystems.
Therefore, crossing the chasm is of utmost importance for any product or service willing to serve a more pragmatic customer base.
Geoffrey A. Moore’s book, Crossing the Chasm, states that to overcome the gap the product must offer a complete solution, provide a high level of service to attract pragmatists, and establish a strong reputation by word of mouth.
Okamoto, the renowned cryptographer, says that his patent was an obstacle for Hal Finney
The growth of smart phones is a great example
Global smartphone sales (millions)
Although smartphones are a household name now, their growth in the first two years of this industry averaged only 20% per year. In the next five years, a growth rate of 50% indicated that the technology had moved a much wider group of users.
Apple’s iPhone was launched in June 2007, selling more than 300,000 units in the first weekend, while the iPhone 3G arrived a year later and set a record of 1 million units sold in its first weekend.
In such a scenario, one would expect a stable and healthy Crypto Trader price table for Apple (AAPL) during that period, but it did not.
As we have seen, during the second half of 2007 there was a 63% increase, but even in that period there was a 22% drop in just five days. The beginning of 2008 also marked a difficult time for shareholders, as AAPL fell to USD 18 from USD 28 in less than a month.
During this period, Apple shares underperformed the S&P 500 by 29.5% in the first quarter of 2008.