Gagan Saksena

Random thoughts about life, game theory, entrepreneurship and poker.

Sunday, May 9, 2010

Experiments for Early Adopters

This has been on my mind for a very long time, but today's article in NY Times inspired me to post this. I have often wondered how if at all would we measure the enthusiasm that early adopters bring. True that in some cases it may very well be just the act of convincing someone to try out your product, but that's not the early adopter I'm talking about. I am thinking more of the ones that willingly step up and grab the next product from, oh... say Apple, for a price that they clearly are very elastic about. In other words, if the iPad was another $100 they will still pay, because price is not such a factor when they are buying it. Or maybe it is! An important side effect of my formal education was that it re-enforced my belief and reliance on quantitative analysis. So, just how could we measure what a new iPad is worth to the early adopters.?

I can think of two interesting experiments. They may sound a bit what Prof. Dan Ariely might want to do- and I encourage the opportunity for anyone to try these out. For the purpose of these experiments I will use iPad as an example of a hot new product.
  1. Experiment 1. Suppose you were given the opportunity to participate in the "early adopters" of iPad with this condition- You will pay exactly the amount that Apple will charge one year from now; you will always have the latest version (thus reducing if not eliminating any price-differentiation or quality issues that an early adopter may face) The only condition for that one year is that you may not use the product in public, tweet/blog about it or in anyway be seen with it. In other words- no one can find out that you own one! (This takes out the extrinsic "fashionable" joy of owning a hot new product) Who will opt for this?
  2. Experiment 2. Exactly like above- opportunity to participate in the "early adopters" of iPad. Except that in this case, it's just the reverse- You are required to tweet/blog about your new product. The only condition here is that the product you will get for one year, won't actually be working (In other words, we have taken out any intrinsic "value" of owning it- except maybe for a paperweight) How would you as a user know what to talk about? Suppose that was available in some form (internal reviews from Apple approved for release for such experiment) So who wants to participate in it?
There are most certainly a lot more details about this experiment that will need to be thought through- like finding a group that's unbiased, understanding the percentage distribution of participants in both experiments. But I hope this serves as a starting point for a thought experiment at least!

I wonder if these figures would correspond to the percentage of early adopters that do participate early on and help iron out the kinks for the rest of the market.

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