Columbia Business School professor Rita McGrath recently reflected on the rapidity with which tools become commonplace on the HBR Blog Network. Citing The New York Times, McGrath writes, "It took decades for the telephone to reach 50% of households, beginning before 1900. It took five years or less for cellphones to accomplish the same penetration in 1990."
The Brand Advantage
With that in mind, it might seem like entrepreneurs are well-positioned to harvest the next big idea out of white space and reap the rewards right away.
But hold on. New technology can catch on quickly, but the innovator's dilemma, that annoying idea that the first person into a new space probably won't be the one to perfect it, holds true. According to George Tellis, writing in the 2013 book Unrelenting Innovation: How to Build a Culture for Market Dominance, it takes an average of 6.2 years in the U.S. for a product to reach 2 percent market penetration.
The contrast between Tellis's findings and those McGrath cites reflects an important distinction when it comes to adoption: the difference between a technology and a brand. In the book, Tellis uses the MP3 player as an example. They made for a popular holiday gift well before the iPod came about. You might be the first to create the next great thingamajig, but you won't be the one to create the iThingamajig.
In an interview with Inc.com, McGrath said entrepreneurs stand to benefit the most from this contrast. While big businesses are best equipped to stake their claim to the next big innovation in their industry, she says, often they do not. For the little guy, that represents an opportunity.
"The barriers to entry that used to allow big players to protect their position have just evaporated," she says.