Me too adoption avoids competitive disadvantage

There is an interesting dimension to how a competitive advantage spreads through an industry, particularly when it has a technology component.

A typical way this expresses itself is in adoption patterns for a new idea. New idea X comes on the scene either through a firm internal to the industry, a firm entering the industry, or a vendor of some type recognizing an opportunity. For early adopters there is quite a bit of flexibility in implementing the new idea. False starts, dead ends, project failures or slow development while painful don’t place the firm at a disadvantage competitively. Follow on adopters, depending on how close they are to the forefront, gain knowledge from others who went before them at a tradeoff in flexibility. Those same false starts etc are less and less tolerable because the advantage of the idea has begun to accrue to the firms who went earlier. By the time you get to late adopters, that window of flexibility has shrunk down to where false starts and the like are completely intolerable because more and more firms are benefiting from the idea as it becomes standardized.

Depending on the idea and the industry, the pace at which adoption happens can vary considerably and firms don’t necessarily know what that will look like for any given idea. It is entirely possible to see everything from fast early adoption and rapid diffusion to slow variants of the same or a mixture. A further variable is how pronounced the advantage will be. Firms are faced with a risk matrix of adoption somewhat specific to their industry but always with the looming threat that if they get it wrong they may be late to the party on an idea with firm damaging prospects.

The questions for the firm become for any given idea X:
How is the firm coming to know about it?
Does the firm have any visibility to how seriously others are pursuing the idea?
How fast does this industry normally move to adopt?
If the idea works exactly as advertised, how big an advantage will this idea be for firms that adopt?

There is a perception that firms need to be focused on areas where other firms aren’t and that is a fair idea. That premise though seems best applied to the circumstance where the firm has active control and intelligence that it is matching competitor moves in the idea space so as not to end up competitively disadvantaged.


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