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Early Adopter

Definition

An early adopter or lighthouse customer is an early customer of a given company, product, or technology. The term originates from Everett M. Rogers' Diffusion of Innovations.

What is 'Early Adopter'

An individual or business who uses a new product or technology before others. An early adopter is likely to pay more for the product than later adopters, but accepts this premium if using the product improves efficiency, reduces cost, increases market penetration or simply raises the early adopter's social status. Companies rely on early adopters to provide feedback about product deficiencies, and to cover the cost of the product's research and development.

Explaining 'Early Adopter'

The rate of diffusion, or adoption, of a new product by the market at large can vary according to the type of product and its price. Early adopters in the business world face a high level of risk in that they are using a product or technology that may not be perfected, and which may not work with the products used by suppliers and customers or may not be compatible with other products they own.


Further Reading


The economics of policy borrowing and lending: A study of late adopters
www.tandfonline.com [PDF]
… Curriculum 2005 was modelled after earlier OBE reforms of the late 1980s and early 1990s in … Despite, or perhaps because, Mongolia was a late adopter of the new public management reform … As mentioned earlier, this bias might be understood as a legacy from the past, when …

The influence of financial incentives and other socio-economic factors on electric vehicle adoptionThe influence of financial incentives and other socio-economic factors on electric vehicle adoption
www.sciencedirect.com [PDF]
… Curriculum 2005 was modelled after earlier OBE reforms of the late 1980s and early 1990s in … Despite, or perhaps because, Mongolia was a late adopter of the new public management reform … As mentioned earlier, this bias might be understood as a legacy from the past, when …

Mandatory IFRS reporting around the world: Early evidence on the economic consequencesMandatory IFRS reporting around the world: Early evidence on the economic consequences
onlinelibrary.wiley.com [PDF]
… Curriculum 2005 was modelled after earlier OBE reforms of the late 1980s and early 1990s in … Despite, or perhaps because, Mongolia was a late adopter of the new public management reform … As mentioned earlier, this bias might be understood as a legacy from the past, when …

Bitcoin: Economics, technology, and governanceBitcoin: Economics, technology, and governance
www.aeaweb.org [PDF]
… Curriculum 2005 was modelled after earlier OBE reforms of the late 1980s and early 1990s in … Despite, or perhaps because, Mongolia was a late adopter of the new public management reform … As mentioned earlier, this bias might be understood as a legacy from the past, when …

Using Aplia in finance classes: student perspectives and performanceUsing Aplia in finance classes: student perspectives and performance
clutejournals.com [PDF]
… Curriculum 2005 was modelled after earlier OBE reforms of the late 1980s and early 1990s in … Despite, or perhaps because, Mongolia was a late adopter of the new public management reform … As mentioned earlier, this bias might be understood as a legacy from the past, when …

Mobile banking and economic development: Linking adoption, impact, and useMobile banking and economic development: Linking adoption, impact, and use
www.tandfonline.com [PDF]
… Curriculum 2005 was modelled after earlier OBE reforms of the late 1980s and early 1990s in … Despite, or perhaps because, Mongolia was a late adopter of the new public management reform … As mentioned earlier, this bias might be understood as a legacy from the past, when …

What integrated reporting changed: the case study of early adoptersWhat integrated reporting changed: the case study of early adopters
www.sciencedirect.com [PDF]
… Curriculum 2005 was modelled after earlier OBE reforms of the late 1980s and early 1990s in … Despite, or perhaps because, Mongolia was a late adopter of the new public management reform … As mentioned earlier, this bias might be understood as a legacy from the past, when …

International Financial Reporting Standards: what are the benefits?International Financial Reporting Standards: what are the benefits?
www.tandfonline.com [PDF]
… Curriculum 2005 was modelled after earlier OBE reforms of the late 1980s and early 1990s in … Despite, or perhaps because, Mongolia was a late adopter of the new public management reform … As mentioned earlier, this bias might be understood as a legacy from the past, when …



Q&A About Early Adopter


When do companies rely on feedback from customers?

Companies tend to rely on customer feedback when they have not yet developed a product.

What are some reasons why businesses rely on early adopters to provide feedback about products and their deficiencies?

Businesses rely on feedback from early adopters to improve products and reduce costs.

Why do companies need to cover development costs of new products through sales revenue generated by early adopting customers?

New products may not be perfected and may not work with suppliers' or customers' existing systems. Early adopting customers help cover these costs by paying more for the products than later adopting customers would pay. This allows companies to recoup their research and development expenses while also making money in sales revenue generated by earlier-adopting consumers.

What is an early adopter?

An early adopter is someone who uses a new product or technology before others.

How does an early adopter differ from a late adopter?

An early adopter pays more for the product than later adopters but accepts this premium if using the product improves efficiency, reduces cost, increases market penetration or simply raises the status of the individual.