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You may have heard of the diffusion of innovation curve, the Rogers Innovation Curve, diffusion of innovation theory, adoption curve, or innovation scale. These all refer to the same concept: members of a social system adopt different behaviors when it comes to new ideas, technologies, communication channels, and more.
Are you the kind of person who rushes out to the Apple store as soon as the latest iPhone is released? Or do you hold on to your smartphone for as long as possible, even if it doesn’t work the way it used to, because it serves your purposes just fine? Maybe you’re skeptical about the latest model’s new features and would rather stick with what you know works for you.
This is a perfect example of the innovation curve in action, albeit on a relatively small scale. Innovation theory can also be applied to much larger investments.
Rogers Innovation Curve
Everett Rogers proposed his theory on Diffusion of Innovations in 1962, and it remains a popular reference point to this day. Following Rogers’ theory, individuals fall along the innovation curve at any of the following points.
These adopter categories follow a bell-shaped curve, with most individuals falling somewhere between “innovator” and “laggard.”
Opinion leaders may adopt innovations early, making them fall within the left half of the chart. This group of people is more likely to invest in a newer, bolder, or riskier concept if they believe in its potential.
Other individuals will be more likely to wait until a concept has proven its worth in the marketplace before investing in it. They prefer well-established brands, proven products, and more secure investments.
None of these groups is necessarily better than the other. In fact, they all pretty much depend on one another.
For a late majority or laggard individual to feel comfortable investing in a company or product, they rely on the innovators, early adopters, and early majority to test the waters first, so to speak.
Innovators and early adopters (and early majority, to a certain extent) benefit from high potential returns by being early investors in a new concept. While it might carry more risk, there is certainly potential for high rewards. If it weren’t for the late majority and laggards, this early mover advantage would be lost.
Where Do You Fall?
By determining where you are on the innovation scale, you’ll be able to identify the right investment opportunities for you more easily. So let’s break down each of these categories a little further to start to identify where you might fall along this innovation scale.
Innovator
If you are an innovator, you like to take risks and are a natural entrepreneur. You are likely drawn to micro-emerging brands or disruptive, industry-changing brands.
Early Adopter
Early adopters have strong opinions but are slightly more discretionary with risks. If you fall into this category, you are most likely drawn to emerging and disruptive brands, but those that are a bit more seasoned within the industry.
Early Majority
As an early majority, you are more likely to wait a bit longer before adopting innovations. Your area of interest is likely small and midmarket franchises that will allow you to be an early franchisee with a bit more peace of mind from the franchise’s existing track record.
Late Majority
If you are a part of the late majority, you prefer lower-risk opportunities like enterprise brands and other mature brands that have withstood the test of time and have continued to show growth.
Laggard
You prefer consistency, predictability, and proven systems. Laggards prefer brands that are at least a decade old with proven strategies. These established brands are more expensive but have a healthy blueprint for success and significantly less risk.
What Does All of This Mean for You?
According to Forbes, “Identifying companies that are successfully moving along the early stages of the adoption curve is a proven strategy for growth-oriented investors.”
With thousands of franchise brands available to future business owners, it can be difficult to identify the right opportunity. There are well-established brands like McDonald’s that have a hefty price tag but offer a pretty much surefire plan for success.
On the other hand, there are newly emerging franchises that may not have the brand recognition or well-established business model of McDonald’s and the like but have the potential to grow into a large, profitable business. These typically come at a lower investment, but there is more uncertainty involved when opening one of these businesses.
Although each franchise system offers a unique opportunity, each personality thrives in a slightly different environment. Identifying where you fall on the innovation curve will help you determine what type of franchise system will best align with your goals and aspirations.
For example, if you’re an early adopter, emerging and micro-emerging brands may provide the autonomy and influence you’re looking for. On the other hand, the late majority and laggards might be more comfortable investing in a brand they already know is successful, like Subway or Dunkin’.
Of course, this is only one factor when it comes to finding the right franchise. Your location, preferred industry, the amount available to invest, and more will all play a role in your decision.
Want to find your franchise? Franchise123 can walk you through, step by step, how to narrow down and research your franchise options. Set up your free account today and get started with your personalized franchise dashboard!
