Speaker 1: Hello, this is Dr. Eric Bricker, and thank you for watching A Health Care Z. Today we're going to be discussing the technology adoption life cycle, and I would be remiss in talking about health care finance and change if I did not talk about the technology adoption life cycle, and it is from this book called Crossing the Chasm by Jeffrey Moore, and it's really a classic. It's actually based on work that was initially done by a gentleman by the name of Everett Rogers at Iowa State in regards to the adoption of new strains of, like, potatoes or seed, and it basically is a framework for how some sort of new technology is adopted over the cross of a population. And so what we have here is a chart with the number of people or organizations on the Y axis and time on the X axis, and basically the adoption of any new technology or trend or what have you follows this bell-shaped curve, right, where the first people are called the early adopters, and these are people that adopt the new technology just for the sake of the fact that it's new or that it's cool or that they just want to be first, okay? And next you have the pragmatists, and they make up about 33% of the population, and they're folks that are looking for a new technology, what have you, because they have a specific problem that they're looking to solve, and one of the things about pragmatists is that they are very much influenced by their peers. So they're not so much into, like, the technology itself, but they'll ask their friends and their neighbors, hey, what are you doing to solve this problem, and they'll use that sort of herd mentality to help them decide whether or not they should make a change. Next you have the conservatives, and the big difference between the conservatives and the pragmatists is the conservatives don't want it to be difficult. They want it to be easy. They want it to be baked in, and they want it to be cheap. So yes, they have a problem, the same problem that the pragmatists have, but the pragmatists are willing to shell out some money for it, and they're willing to put forth some effort to make it happen, whereas the conservatives are like, unless it's easy and cheap, I'm not going to do it. But they'll still do it, and that's another 33%, and then at the end you have the skeptics, and these are people who will not do it no matter what. It's a conspiracy, what have you, and notice that these percentages in terms of the breakdown of the population, this is one standard deviation from the mean, from the middle, and just Google percent of the U.S. population that does not use the internet, and guess what you find? It's about 17%, right? So about 17% of the U.S. population is skeptical of the internet and doesn't use it. Okay, great. It is not a continuous curve, and the reason that Jeffrey Moore's book is called Crossing the Chasm is because there's a chasm here between the early adopters and the pragmatists. In other words, it's hard for most technologies to actually make the jump from early adopters over to this much larger group of pragmatists. So as you can imagine, there's tons of enthusiasts that sit in their garages and their basements using various types of technologies, but they're really not necessarily adapted by the masses. However, Jeffrey Moore does say, look, but there are some folks that do cross the chasm. How do they do that? So first off, those technologies that cross the chasm have a 10x better value proposition. Okay, so it can't be 50% better. It can't be twice better. It's got to be 10 times better. It's got to be so much better that it's remarkable. In other words, people will remark about how much better it is to someone else, which is so important for the pragmatists, right, because it's done by word of mouth. There's no amount of like marketing or shenanigans that you can get for pragmatists to actually do it. They have to hear from their friends and their neighbors that it really works. Okay, classic example of this for most modern times, like as in like the past, like, you know, several years is AWS is Amazon Web Services, right, where cloud computing, not hosted at a data center that you own, but rather that you sort of like rented and you can scale up and scale down. And it is much cheaper than it used to be. It is a 10x value proposition, okay? Amazon Web Services is a $26 billion a year operation within Amazon. It is larger than McDonald's and it did not exist 13 years ago. So it went from this all the way through pragmatists and conservatives in 13 years, which, oh, by the way, typically this technology adoption life cycle takes about 10 years to happen. So those are about the timeframes we're talking about here. Okay, so fine. So one, you got to have that 10x better value proposition. Two, you start out with a niche. In other words, even if you have a 10x value proposition, you don't try to spray the entire market with it, but you want to focus on a niche. And the reason you want to focus on a niche is because you want to be a big fish in a small pond. And because in the very beginning, you're such a small fish, the only way that you can be considered a big fish is to find a small pond. As you can imagine with cloud computing, Amazon Web Service got its start with technology companies themselves. Okay, great. But you can't build a business that's larger than McDonald's on just technology customers alone. You have to move on to more mainstream municipalities, governments, large enterprise customers, etc. So how do you move beyond the niche is through what's referred to as the bowling pin strategy, where you will take specific verticals or segments within the market, and you will knock down bowling pins within that particular niche. And Amazon Web Services specifically did that in that they had pharmaceutical clients like Allergan and Celgene, and then they were able to knock down more bowling pins eventually to get to the FDA. Because as you can imagine, Allergan and Celgene might be considered like pragmatists. They had a specific problem that AWS could solve for them. But as you can imagine, the federal government is probably in this camp. It's probably in the conservative camp. Okay, so what does this have to do with healthcare? So in healthcare, probably the largest, most recent example of this is probably with telemedicine. Where the 10x value proposition is you don't have to leave, you don't have to go anywhere to actually see a physician. It's not going to solve all your healthcare problems, but for things like bladder infections and yeast infections and upper respiratory tract infections, it is a 10x value proposition to not have to go anywhere to get an antibiotic prescribed for you. And guess what? Being in DFW, where we're located, that's also where Teladoc is based out of. And Teladoc has been around for like over 10 years and we saw them locally have these early adopter clients where they just thought, hey, having a doctor over the phone is just kind of cool. And then for the pragmatists, it was like folks like law firms that are like, look, we don't have time for our lawyers and our paralegals to go to the doctor because their time is super valuable and we just need to save them that time. And there it just continued to spread to where we have telemedicine is offered by the majority of employers today, not just by Teladoc, but by a variety of providers and the carriers themselves. So that is the technology adoption life cycle in summary. And thank you for watching A Health Care Z.