Launching a product is the hardest part about running a SaaS business. Once you have a few people using your product, you can solicit feedback and referrals. You can iterate and refine. You can use your first users as sources of knowledge so as to capture and impress future users.
But how do you find those first users? How do you start from zero?
When the ride-sharing app Uber started, they were giving out free rides. Seems reasonable, right? It’s common for SaaS products to give something free to new users in hopes of turning them into paying users. But Uber took a slightly different approach.
Uber gave out free rides to people during Austin’s SXSW Conference. Attendees of the conference were young, tech-savvy people with money to experiment on new things. They were also struggling to get around a place that was short on taxis.
(If growth hacking is a subject that interests you, you should definitely read more about Uber. They are consistently used as an example in startups and business schools on growing scalable products.)
Instead of spending millions giving free rides all over the country, Uber focused on potential customers who were most likely to adopt the product. They could maximize their marketing dollars by focusing on the people who would help their product grow. Not only did they capture their first users, but they found the right users who would carry their product onward.
Uber took advantage of the product adoption curve.
What is the product adoption curve?
Communication scholar and sociologist Everett M. Rogers learned that not everyone is willing to adopt a new product immediately, especially a disruptive product. But that doesn’t mean product adoption is unpredictable. We can group consumers based on how quickly they adopt (or are willing to adopt) a new product.
Some customers will adopt a product the moment it becomes available. They were likely anticipating the product and following its development before its release. On the other end, some people will adopt a product only once everyone else has.
As a whole, product adopters can be plotted on a bell-shaped curve (also called the Rogers Adoption Curve) that looks like this.
Note that this curve only includes people who actually adopt a product – not all people. For instance, someone far removed from your target customer wouldn’t be included because people don’t adopt products that aren’t relevant to them.
Innovators – the first 2.5% of users to adopt the product
These are risk-takers who are willing to try an unproven product. They are not guinea pigs or lab rats, however. They are well-informed followers of the brand or technology. Technically, they are taking risks by adopting the product early (which is likely incomplete and buggy), but they understand those risks.
Demographically speaking, innovators are usually young, financially stable, and have close contact with other innovators (it’s usually a close community).
Early Adopters – the next 13.5% of users to adopt the product
Early adopters jump in based on the positive response of the innovators. Again, these are educated users. Many are industry opinion leaders with followings or audiences of their own.
These people are generally young, financially stable, and socially outgoing. They differ from innovators because they are discrete and focused about their adoption preferences. That is, they aren’t willing to try any product, just this product.
Early majority – the next 34% of users to adopt the product
These are careful consumers who insulate themselves from risk by letting other people try products first. They don’t want to be the last adopters, but they aren’t willing to waste money on a buggy product or a product that never builds a user base to support itself.
Whereas innovators and early adopters are waiting for triggers to adopt (product release or innovator approval), the early majority has a longer adoption period. They rely on recommendations from the two earlier groups and each other.
Late majority – the next 34% of users to adopt the product
These people only accept products once they become commonplace, as they approach product adoption with a high degree of skepticism. They aren’t just skeptical about a particular product. They are skeptical about all innovation.
Demographically, they aren’t willing to take financial risks. They do not easily accept recommendations from earlier adopters, and offer little opinion leadership (meaning their recommendations to other people don’t hold much value).
Laggards – the final 16% of users to adopt a product
This is the final group to adopt a product. At this point, the product has been available and commonly used for quite some time. People in this category often have an aversion to change. They aren’t willing to try new things and tend to be older in age.
Laggards have little to no contact with anyone who would be considered an innovator or an early adopter. They only adopt the product out of necessity (example: “I have to use Facebook because it’s the only place to see pictures of my grandkids”).
Keep in mind that people only fit into these categories in the context of a particular product. Just because someone was the first to buy the iPhone doesn’t mean they’re the first to install solar panels, or try that new hamburger restaurant. Adopters can be innovators for one product and laggards for another.
How can you take advantage of the product adoption curve?
Hopefully you have an ideal customer profile (also called a buyer persona) put together. This profile should describe your perfect customer – the type of person who would receive the most value from your product.
To take advantage of the product adoption curve, focus on a subset of your ideal customer. You want to target people who will receive the most value and be likely to try new things. If you sell a disruptive product (a product that changes the way a problem is solved or solves a new problem), you need to drill down as deep as possible because most people resist fundamental change.
This focus should happen early in your product development. When you envisioned your product, you likely thought of a dozen features that would create a robust platform, and then had to scale down to your minimum viable product.
Consider your innovators and early adopters when you plan development. What type of features do they need? For instance, UberEATS is Uber’s food delivery service. They could have started with food delivery before ride-sharing, but they had to consider the adoption curve. Innovators and early adopters needed rides more than food and could be targeted.
Notice Uber’s growth on this chart. They grew steadily until July of 2013, then took a sharp upturn. At this point, the innovators and early adopters had drive product adoption to the point where the early majority jumped in.
Furthermore, develop your product and prioritize features that drive adoption. Your product should be easy to use and share, and simple to understand. It should fit seamlessly into your customer’s’ current lives (as much as possible, that is).
Most importantly, you can drive adoption by making your product more valuable in some way than the alternative. The difference doesn’t have to be economic. It could offer more social prestige or save time, but it has to be better in some way than whatever else is available.
If you consider your ideal customer and develop your product so it’s likely to spread, you’ll position it nicely for quick adoption. The faster a product is adopted by earlier adopters, the quicker it will move through the remainder of potential users. The trick is to please the innovators first so they adopt quickly.
That isn’t the end of your struggle, however. SaaS products have another hurdle: customer retention. Retaining customers is a critical way to acquire new ones, as happy customers spread your message to their friends.
When you’re ready to focus on retention, get your invitation to Retained.
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