Early Adoptors and the "Survivor Bias"

Early Adoptors and the "Survivor Bias"

Thursday, May 1, 2008 2:04 PM (permalink)

I've written before about the danger of living too much within the "Snow Globe" of social media, and the recent Hitwise figures on Twitter (which neatly match our own data at Edison) have raised the specter of the "early adopter" yet again. As an early adopter myself, I can certainly identify with those who advance the notion that early adopters make the world go 'round; as a demographer/researcher/arbiter of that big ole' middle of the bell curve I also know that often the early adopter is not ahead of the curve, but on an entirely different graph altogether. Sometimes, the late adopter isn't late--they are wise. The great fallacy of painting the late adopters as Robert Scoble does here is that it is far too easy to succumb to patronizing, even pedantic attitudes towards the "luddites" who just don't get Twitter, or FriendFeed.

I love Twitter, so I won't bash it again in this space. I would just point out, as someone who started his professional career back in the days of Usenet, Compuserve, Pointcast and Altavista, that early adopters are wrong much more often than they are right. It is easy to compare fast growing, early-adopter-driven companies like Google with the moribund, middle-America-serving Best Buy, as Scoble does. The fatal flaw with such comparisons is the insidious survivor bias built into this sort of anecdotal analysis. Michael Raynor says this far more eloquently than I can in The Strategy Paradox, but essentially the gist of this flaw is that it is all too easy to compare Amazon.com with poor, struggling Sears and write all kinds of strategy books about vision, taking chances and risk. But these analyses never take into account the fact that for every single visionary company like Amazon, there are dozens of retailers who took similar, big visionary bets that are gone now and are rarely factored into the equation. So it is easy to say that Google beats Best Buy (as a stock) because of its willingness to take risks and innovate if you only make this simple comparison, but both Google and Best Buy have this in common--they are still in business. There are lots of business books about the strategic dominance of Wal-Mart and how Sears has resisted taking risks, but again, Sears is still here, selling products and paying its employees, and a lot of other retailers who may have attempted to out-innovate them are gone.

It may be that some of the greatest successes on the Web were driven and propelled by passionate early adopters--but that's axiomatic, if all you looked at were the Facebooks of the world. It's easy to look at the survivors and overstate the role of the early adopter, but a glance back at the multitudinous corpses along the way might temper one's zeal. Never forget that the safe choice is just that--a choice, and we mustn't assume that the late adopter by definition has their head in the sand. To state that the early adopter drives success misses the fact that the Internet is littered with Flooz's and Beenz's that were driven right off the road. Basing to early adopters is a risk, plain and simple, and nothing irks me more in this space than the assertion that the laggards "just don't get it." Early adopters matter (No, Mr. Scoble, I won't dispute that, and once through business school was enough!) but they are a part of a portfolio of users and not necessarily the gatekeepers to wider success.

Of course, I am still just bitter about the whole Minidisc thing, so feel free to ignore me.