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The Diffusion of Innovation Theory for Startups

Let’s assume your tech startup is innovative in the market. Your startup can be innovative from the technical side or innovative from the business side. I have experienced both types of innovations with tech vendor startups.

Coming back to the Theory of Diffusion of Innovation, it is important when you are developing your business and sales in your local country or in the international markets. Let starts explaining how is this theory, in the case you already don’t know this one. If you have already heard or know this, then go to the second part directly.

Table of Contents

The Diffusion of Innovation At Your Tech Startup Vendor.

Introduction to the Theory of Diffusion of Innovation.

The Theory of Diffusion of Innovations from Everett Rogers was introduced in 1962. The purpose of this lesson is not to teach you everything about this. You can find deeper theory information in Wikipedia: Diffusion of Innovations.

As you could observe in the main picture, the diffusion of Innovation on the Market Shares look like the following picture:

The Diffusion of Innovation At Your Tech Startup Vendor

It divides the process of the adoption of innovative solutions in 5 groups:

  1. Innovators. Only 2.5 % of Market Shares. They are these buyers who love to have innovative technologies. They are seeking this all the time and it is part of their lifestyle.
  2. Early adopters. 13.5% of Market Shares. They are similar to innovators. They appreciate and like innovations and they are up to bet for you when you are at the early stage in your startup. Even if your technology is still not perfect or not developed from a technical point of view.
  3. Early Majority. 34% of Market Shares. Early and Late Majority are the average population. So, innovative technology is not the key for making their decision. They are driven by analysis of different standard factors such as Price, quality, needs, etc
  4. Late Majority. 34% of Market Shares. The same explained in the previous point.
  5. Laggards. 16% of Market Shares. They are the ones who buy “Plain Screen TV” because the former ones are not manufactured anymore.

Now that you understand the theory of these five groups, let see the practical side.

The Application of The Diffusion of Innovation at your Tech Startup Vendor.

You may wonder what is the relationship between this theory and your tech startup. Your target will be the first two groups: Innovators and Early Adopters. The last two groups (Late Majority and Laggards) won’t be opened or willing to cooperate with new solutions. It is nothing personal against your tech startup neither your solutions. They will look for 100 reasons why not work with you. The further you go, then you may get disappointed or mad trying to convince them about why they need your solution or why your startup solution help or prevent their company of financial and reputation losses.

How do Innovators look like at your tech startup vendor?

Innovators are visionaries entrepreneurs who always look for the most innovative solutions or just passionate about tech startups world. They are Angel Investors or Startups Mentors. Most probably, they will find you, but you can also find them in tech local incubators.

How do Early Adopters look like at your tech startup vendor?

They are also part of these Angel Investors, but they usually manage their own distributor or reseller company. It means they are the one who will move the market for you in their customer’s side or willing to move with you. Therefore, you should take care of them as much as possible for a higher probability of business and sales development in local and international markets. I hope I helped you to choose the strategy in order to boost your channel partner ecosystem at your tech startup.

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