# What Is an Early Adopter, and How Does It Work (With Examples)?

## What Is an Early Adopter?

The term "early adopter" refers to an individual or business who uses a new product, [innovation](https://www.investopedia.com/terms/d/diffusion-of-innovations-theory.asp), or technology before others. An early adopter is likely to pay more for the product than later adopters but accepts this [premium](https://www.investopedia.com/terms/p/premium.asp) if using the product improves efficiency, reduces cost, increases [market penetration](https://www.investopedia.com/terms/m/market-penetration.asp), or 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](https://www.investopedia.com/terms/r/randd.asp).

### Key Takeaways

*   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.
*   Early adopters often pay more for the privilege of being the first to try a product.
*   Early adopters may enjoy a period of prestige by being the first to own a new form of technology, yet they also face the high probability that the equipment or service they are using will be made obsolete.
*   Early adopters often become opinion leaders or have an influence on the new technology because they are the first to use it and provide feedback.
*   An early adopter is one of five stages of technology adoption. The others being innovators, early majority, late majority, and laggards.

## How an Early Adopter Works

The [rate of diffusion, or adoption](https://www.investopedia.com/terms/r/rate-of-adoption.asp), 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.

The term "early adopter" comes from a book by Everett M. Rogers, titled, _Diffusion of Innovations_ (1962) in which he discusses [five types of adopter stages](https://www.investopedia.com/terms/a/adopter-categories.asp) for products. The five types are (1) innovator, (2) early adopter, (3) early majority, (4) late majority, and (5) laggard.

## Advantages and Disadvantages of Being an Early Adopter

Early adopters of hardware that is content-reliant may face a lack of ways they can use their equipment until producers catch up. For example, early adopters of recorded media players may have only had a shortlist of titles they could choose from when the hardware was first released from manufacturers. The expectation is that over time, more content would become available for the chosen media format, but there is no guarantee.

For instance, after the introduction of high-definition television, early adopters waited for television broadcasters to supply more and more of their shows in the new format that took advantage of the higher visual clarity. When it came to high-definition home video playback, a format war arose between manufacturers of Blu-ray and HD DVD players. Early adopters of either disc player were anticipating their format would eventually win out as the high-definition video disc of choice for the market.

In those early years, entertainment companies released movies and the video content might have been published on either one of the formats. This left early adopters with limited options on the content their disc players could access. Only rarely did content get published by entertainment companies for both standards. Eventually, the Blu-Ray platform became universally adopted for high definition video discs, leaving early adopters of HD DVD players with unsupported equipment that would have to be replaced.

Early adopters may enjoy a period of prestige by being the first to own a new form of technology, yet they also face the high probability that the equipment or service they are using will be made obsolete in future iterations of the [product](https://www.investopedia.com/terms/p/product-family.asp). In addition, the price they pay to be an early adopter is high as the technology is new. This also results in a loss of value as successive iterations will be more advanced. As a result, early adopters experience more defects in new technology that hasn't been fully tested.

As early adopters are the first to use a product they can provide feedback to the manufacturer about where the product can be improved, thereby having some influence on the technology. This unique position can also lead them to be a thought leader on the new tech as they are one of the few people who know how the technology works. If they position this right, it can lead to competitive advantages.

Pros

*   Prestige
    
*   Some influence on developing the technology
    
*   Gaining a competitive advantage
    
*   Becoming a thought leader on the tech
    

Cons

*   Limitations in applicability
    
*   Risk of utilizing soon to be obsolete product
    
*   High price for new technology
    
*   Loss of value
    
*   Higher risk of defects
    

## Special Considerations

The [five stages](https://www.investopedia.com/terms/a/adopter-categories.asp) of technology adoption are as follows:

### Innovators

Innovators are those that adopt new technology first. They tend to be younger in age, take more risks, are in a higher social class, have greater access to wealth, and have access to scientific resources and other innovators.

### Early Adopters

Early adopters are the class right after innovators in using new technology. Like innovators, early adopters have greater access to wealth, are younger in age, and have higher education. They are more selective in their adoption of new technology and become opinion leaders on the new innovations.

### Early Majority

The early majority group adopts new technology way after innovators and early adopters do. Once new technology is accepted by the early majority it tends to become widely adopted soon after. The early majority group adopts new technology due to utility and practicality.

### Late Majority

Members of the late majority group adopt technology well after the average person has. They are more cautious and skeptical of new technology and resist until it is widely accepted or impossible to ignore. They typically need assistance in understanding the new technology.

### Laggards

Laggards are those that adopt new technology last because they have to and there is no other option for them. They tend to be advanced in age and focus on what they were comfortable with in their younger years.

## Example of Early Adopter

As the world began to focus on climate change and reducing carbon emissions, electric cars became a point of discussion. [Elon Musk](https://www.investopedia.com/articles/personal-finance/061015/how-elon-musk-became-elon-musk.asp) created Tesla, one of the first producers of an electric car. Not only is the auto industry notoriously difficult to break into but doing so with a car that doesn't rely on the combustible engine but rather electricity and batteries is significantly harder.

But Elon Musk did that and successfully so. He introduced new technology and disrupted the market. When the first cars were released, many individuals opted to buy Tesla's cars instead of traditional cars, becoming early adopters of the technology.

Initially, this was a big risk as the product was new and not fully tested, the cars were [expensive](https://www.investopedia.com/articles/personal-finance/032415/why-are-tesla-cars-so-expensive.asp) and [still are](https://www.investopedia.com/articles/active-trading/072115/what-makes-teslas-business-model-different.asp) to this day, and there were not many charging stations available for the car as the entire operational grid had not yet been created.

These early adopters of Tesla carried a bit of mystique and prestige in being the first individuals to use new, ground-breaking technology and own an automobile that very few people did. Over time, the price of the cars has come down, the quality has gotten better, and charging stations are widely available.

## Early Adopter FAQs

### What Is the Early Adopter Tax?

The early adopter tax refers to the premium that early adopters pay for new technology as new tech always costs more upon release. In addition to the cost, the early adopter tax includes the bugs and defects in new technology that have not yet been ironed out, as well as missing out on the new features that are included in successive iterations.

### How Do You Market to Early Adopters?

The best ways to market to early adopters include understanding what they need, meeting them in person, providing them with a product they can use right away, targeting specific individuals and companies, addressing an existing alternative, and telling a story.

### What Percentage of People Are Early Adopters?

Approximately 13.5% of people are early adopters.

## The Bottom Line

Early adopters are those individuals that use new products before the majority of people. They are risk-takers and trendsetters and have a strong influence on the success or failure of a new product. It is for this reason many businesses seek to gain the approval of early adopters. Though early adopters can become opinion leaders on new technology they also incur higher costs from using new tech and are at risk of losing value if the new technology is not accepted on a wider scale.

> **Article Sources**
>
> 1.  Interaction Design Foundation. "[Understanding Early Adopters and Customer Adoption Patterns](https://www.interaction-design.org/literature/article/understanding-early-adopters-and-customer-adoption-patterns)." Accessed May 4, 2021.
>     
> 2.  On Digital Marketing. "[The 5 Customer Segments of Technology Adoption](https://ondigitalmarketing.com/learn/odm/foundations/5-customer-segments-technology-adoption/)." Accessed May 4, 2021.