Product Diffusion: Old Theory vs. New World of Apps

14 October 2014

Quick background: As I've mentioned in previous posts, I'm now a first-year student at Harvard Business School. The experience, so far, has been a blast. But, how useful an MBA is for a tech career is still an open question, and before coming, I was warned that not everything I learn in class will be relevant to how the tech world works today. Here's my first post (of hopefully several) that will look at what is being taught in class from the point of view of tech/web products.

In the first-year Marketing course taught at Harvard Business School, a course which every student takes, we learned about five factors impacting product adoption (or "diffusion"), formulated by a professor, Everett Rogers, in the 1960s. They are:

  1. Relative Advantage: how much better an innovation is compared to previous generations or existing alternatives
  2. Compatibility: how easily a user can incorporate the innovation into her daily life
  3. Complexity: how easy the innovation is to use
  4. Trialability: how easily a user can first "try out" the innovation
  5. Observability: how visible the new product is to others

I thought it might be interesting to think about how these five factors relate to the diffusion of mobile apps, a category which didn't even exist back in Rogers' time. To cut to the chase, I think three are still extremely relevant, two might not translate as well to the mobile world, and there are at least three new factors that should be considered.

Complexity

This factor definitely applies to apps: the easier the app is to use, the more likely users are to use it. In modern speak, this factor emphasizes the importance of good UX/UI work. Perhaps more important than a "beautiful" app is one that users can quickly learn how to use, or better yet one in which usage feels instinctual.

An interesting question about complexity, however, is whether more features in an app can hurt that app's adoption, even if those features aren't front-and-center. Is it better to have the app do just one thing very well? Or, can the app have other features, as long as they don't clutter the initial trial phase, or as long as they're introduced later as the app's audience matures?

Trialability

Trialability is incredibly easy with apps - basically everyone in the target audience (i.e. any segment of app users) can find, download and try an app out within minutes. Trialability is impeded by charging for the app, but this is why the freemium model and free trials can be so successful.

The very low barrier to an app trial contributes to app overload, and raises the bar for how useful and well-designed an app has to be in order for users to adopt it.

Compatibility

An app can fit into the daily life of a user in a few different ways. One way is by providing convenience and simplifying some task that a user already does. For example, an informational app like Yelp can help simplify a user's search for a good restaurant, while a marketplace app like Handy allows a user to outsource a chore.

An app can also fit into a user's life by creating a new kind of desire to use that app; in that case, the enjoyment that an app provides has to outweigh the costs of using that app. Game apps are the purest example of this: if a user finds a game fun, he might spend dozens or hundreds of hours on it. But, social apps like Facebook or Instagram follow a similar mental calculus. Users use these kinds of social apps because they want to see what their friends are up to, and, by revealed preference, these apps are "worth" the time spent on them.

So, apps that are high on the "compatibility" dimension are ones that either solve an existing need, or ones that can quickly ingrain themselves into a user's routine. What's interesting to see is that some apps can cause certain users to develop a new habit, while other users resist that new habit. One example of this is Foursquare (now Swarm) check-ins: some users enjoy the app experience enough to pick up a costly (not necessarily with each check-in, but in aggregate) habit, while users who resist this might just drop out. (Incidentally, this supports Foursquare's decision to spin off the social check-in features into a separate app.)

Observability

Observability is where things get a bit hairy for apps. In the physical world, one way a product can spread quickly is to make it extremely noticeable and identifiable to users. A famous example of this is the iPod. The iPod itself is usually kept in a pocket, which would hide it from others. However, in a clever move, Apple decided to associate its iPod with very noticeable white earbuds, and these earbuds very quickly became synonymous with Apple products.

Generally, it seems difficult for most apps to be observable. Smartphones' screens are small, a lot of phone usage happens in private, most phones are kept on silent/vibrate (eliminating observability via sound), and not all apps can have a design that is immediately identifiable from afar.

How can an app become observable? One possible way is to encourage an observable user behavior. Instagram, for example, encourages users to take pictures with their phones and then to spend more time immediately following the picture applying a filter, writing a caption, etc. Other apps might be observable by virtue of being very context-driven. For example, you might see your friends pull out their phones to summon an Uber whenever they walk out of a restaurant.

And finally, an app can be observable because users talk about it. I'm not sure if "word of mouth" falls under the traditional view of observability, but having users evangelize an app is an effective way to spread it. However, it's unclear how long an app can keep up rapid word-of-mouth growth (a topic for another post perhaps!).

Relative Advantage

The final factor out of the original five is how much better a product is relative to previous versions or alternatives. Again, I'm not sure if this factor applies that well to the app world - many apps, in fact, create new kinds of behaviors or needs that previously did not exist.

If an app is competing in a space with established alternatives, then relative advantage probably holds. In the messaging space, for example, there are not only many different apps that let you send SMS-like messages to your friends, but all of these apps are also competing with SMS; hence, one would expect that any given messaging app might not have diffused quickly through the smartphone userbase. When comparing messaging apps against each other, however, it seems like apps don't necessarily dominate because of a wider or better set of features, but more because they have a significant chunk of a user's friend base.

The Kindle app, however, is a clear example of when relative advantage can have a powerful effect. It provides an alternative to both physical books and other kinds of smartphone reading formats, and provides a lot of convenience and functionality. This may sound like a trivial statement, but the fast spread of e-books has really been rooted in the fact that e-books are simply "better" than physical books in many ways.

New Factors

Given that Rogers' original five factors were developed before the internet was created, it may be time to evaluate whether some new factors apply. Thinking about how new web products and apps have spread (or not spread), I propose the following three for membership in the diffusion pantheon:


comments powered by Disqus