Healthcare is probably the only industry that has been constantly changing, evolving and innovating since the past three decades. Earlier there was more focus on curing diseases, creating new medical equipment, and improving diagnosis through medical technology. Now, the focus is gradually shifting towards streamlining medical processes, improving patient care, and enhancing payer-provider relationships.
With increased per-capita expenditure on insurance premiums and other medical expenditure, people have become more aware of their options. This gradual shift has made one thing clear– end users care about value-for-money/time as much as they care about their health. It means that healthcare products have to align their solutions with users’ problems.
I recently read an article in Techcrunch that talked about why healthcare startups fail and discovered a shocking insight. Healthcare startups (that fail) follow the traditional model of building an MVP before identifying if there’s a need for it. Blinded by their assumptions and riding high on the entrepreneurial spirit, they go on and build the entire product, only to realize that there are no users for it in the market.
Another factor that healthcare startup founders miss to see is that healthcare is a challenging sector. One has to think about data security and implementation of various regulatory guidelines such as HIPAA.
One of the ways to solve this problem is to start by understanding the product adoption lifecycle.
What is Product Adoption Lifecycle?
Product Adoption Lifecycle is the sequence in which users consume/adopt your product. It begins when you launch and ends when you stop. Understanding this cycle helps in getting an idea of how users will adopt the product. This helps in building a right product roadmap.
In product adoption lifecycle management, users are grouped on the basis of how quickly they adopt a product.
For instance, there are some users who are inquisitive and always want to try out new products that come out in the market. They wish to be the first ones to use and share their opinion about the product. On the other hand, there are people who’ll delay their decision to buy/use the product until it’s in the market and has got enough reviews.
Let’s take an example of the Telegram messaging app. When Telegram launched, some people were ready to experiment with new messaging apps and move away from Whatsapp. But, some wanted to wait until their whole community/group shifted to Telegram. They were hesitant in downloading a new app and wanted to hear enough reviews about it before giving it a shot. They were like the two extremes of the same thread.
It’s a common pattern of adoption for every kind of product/service. The two kinds of users– ones who rush to experiment immediately and ones who take their sweet time to try something new– make the extreme ends of the adoption lifecycle. Between these two extremes, there is a continuum of users. There are different terms to identify these people. Let me explain in brief about them.
Personas in the product adoption lifecycle
There are five kinds of users:
- The innovators
- The early adopters
- The early majority
- The late majority
- The laggards
The Innovators & Early Adopters
They form 1/6th of the population of people who buy/use a product/service. They could be treated as evangelists for your product as–
- They are the first to adopt the newly launched product.
- They want to be a part of a small special group who get the first access to the product. They are enamoured by your company’s vision/innovation that you bring to the market.
- They are high risk takers. They might even be willing to pay extra to get early access.
- If they like your product, they go on to talk about it to their friends, family and spread the good word about it.
An example could be when Fitbit was launched, the Innovators and Early Adopters pre-ordered. You might know them as ‘influencers’ in the Instagram world.
The early majority
They make at least 34% of the buyer persona.
- They adopt after the early adopters.
- They are the ones who are influenced by the early adopters.
- They would not pre-order or wait in the line. They will take the feedback and then make a decision to buy/use your product/service.
The late majority
They also fall in the 34% of the population.
- There are the users who come to adopt after a considerable number of people have already used the product.
- They are skeptical about all new products and want to invest time/money in only those that are popular. So they wait to get all the details from the majority of society and only if it’s accepted/widely popular, they join the bandwagon.
They form 16% of the population of buyers.
- They are the last ones to adopt a new innovation and are generally averse to change.
- Nothing excites them and they even wait for the next version of the product to come out.
Now that we know about the personas, let’s also talk about stages of product development and how it impacts the adoption of a new product.
Stages of Product Life Cycle
Along with these personas, products also go through various changes as the industry evolves. We need to be cognizant of this change in order to make product decisions.
- Introduction – When the product is first introduced/launched in the market, nobody knows about it at scale. The demand of the product is quite immature at this stage. Innovators/Early adopters appear here and start using the product at this stage.
- Growth – This is the stage when a product starts to sell/used at a much faster rate. Users are spreading the word about the product. This is where MVP starts becoming a mainstream product. The growth happens after innovators speak/write reviews about the product/service and it starts reaching people (early adopters).
- Maturity – This is the peak of the product. Product is in competition with other alternative products in the market and now the product is a complete solution. The early majority and late majority people join the bus here and start using the product.
- Decline – This is the point when the product reaches the saturation point. The usage/sales starts declining or becomes stagnant. This is where strategy is needed to step up the game with significant changes. It’s the laggards who get to know about the product at this stage. It doesn’t matter if they join the bus here because their percentage is low and the product has already reached a plateau.
The most difficult part is to make the transition between the “Growth” to “Maturity” stage. This is the stage where MVP needs to become a full fledged product, otherwise the product could fall in the trap of the “Chasm”.
What is “Chasm”?
The chasm is a critical point in the product adoption lifecycle that occurs between the early adopters and the early majority.
This is the stage right before the product is going to hit the masses i.e. early majority. To have a positive impact/influence on the majority, it needs to be a complete solution that conforms to the needs of the majority of users. But most healthcare products fall in the trap of ‘Chasm’.
While taking the leap from ‘early adopters’ to ‘early majority’, most healthcare products hit a wall and fail to grab early majority’s attention. Why? Because the early majority want something that is a game changer from their current market options.
They want a full-fledged product which solves all their pain points and not just a part of it. They are the pragmatic ones.
It’s believed that early adopters (Visionaries) and early majorities (Pragmatists) have very different expectations. Early adopters will accept new and innovative ideas even if they have some issues and might not solve all of their problems. But, on the contrary majorities (pragmatists) want to see the reviews, wait until they see someone using the product.
Let’s take an example of Google Glass that was launched in 2014.
The Google Glasses works as a hands-free smartphone, letting users access their internet, camera, maps, schedule etc. When it was launched, it received many appreciations from innovators and quite some attention by early adopters as well.
But, it failed to go for the majority section due to various reasons.
Google Glasses could not pass the early adopter and finally ended up in chasm.
A successful product differs from a failed product if it’s able to cross the chasm and reach the early majority. A product can fail to cross the chasm for a number of reasons — not solving the right problem, socially unacceptable, pricing issues, or inability to roll out a complete solution at the right time, etc.
In a healthcare setting, one of the examples of products falling in ‘Chasm’ is Theranos. Theranos made waves in the healthcare industry by claiming to revolutionize blood tests. They marketed their portable device as a revolutionary product that used a very small amount of blood. The product raised a lot of funding and even went on to sign contracts with leading healthcare companies. However, their devices only worked in their commercials. The product never saw the light of the day, and ended up in ‘chasm’.
This was just one of the many examples of how products land up in ‘chasm’. But that doesn’t mean all products end up there. With right planning and strategy, companies can take a leap of faith and cross the chasm.
Crossing the ‘Chasm’
In 1991, Geoffrey Moore wrote the book “Crossing the Chasm” which explained how a product can cross the Chasm. He then revised it in 1999 and 2014.
He shared that in order to cross the chasm one needs to keep below things in mind-
Choose the right target market
Finding the right users for your product is of utmost importance. Because when you find the right audience you are solving two problems-
- you’re giving them a solution that they’re seeking and
- You’re establishing your expertise in the area.
When you choose the right target audience, it’s likely that your product will receive better reception and adoption (if you’ve solved the problem). To find the right target market, you can do a demographic analysis of your user base.
Understand and create the “whole product”
Start with MVP but don’t end with just an MVP. An MVP is a way to get to the market fast and understand what your users want. Use the customer feedback to quickly iterate and come up with new exciting features that keep users glued to the product. Without understanding users’ pain points and solving their problems, there is no way you can cross the chasm.
Position the product appropriately
Positioning of a product is important for skeptical pragmatists who make up the early majority. They are the people who want to know if the product will suit their needs, how it is better than what’s already available in the market and how it benefits them. So devise a product strategy that answers their questions and positions your product in a way that clearly defines the benefits of your product over your competitors’.
Moore has provided a tool/template to help refine your positioning by filling –
Who are dissatisfied with ____
Our product is a ____
That provides ____
We can provide ____
Choose the most appropriate distribution channel and pricing
Choosing the right distribution channel for your product is akin to choosing your peer group. If you don’t end up with the right ones, you end up ruining your life. The right distribution channel forms the backbone of your sales pipeline and will define what kind of users will join your platform. Therefore, devise a strong strategy and decide how you want to reach your end users- offline or online, free or paid, through distributors or direct sales.
In a short career span of 9 years, I have seen more companies cross the ‘chasm’ successfully. But I have also seen some fall into the abyss of chasm while they take the big leap from early market to mainstream market. It’s not an easy task, but it’s nothing insurmountable. With right strategy, knowledge and guidance, one can easily cross the chasm.
However, it doesn’t end there. Even after crossing the chasm, one has to constantly reevaluate, reprioritize, and delve into deeper analytics to see what’s working and what’s not. In a nutshell, always keep an ear to the ground and listen to what users want. After all, you’re building the product for them.