product strategy 101 | technology adoption cycle, how massive population adopt AI and chatGPT

It is like that the more value you build uh for premium members, the more they're going to stay on the subscription.

Another thing uh which matter more is as a product manager you do not only think about what is new to build on top of the subscription. You also think about what

subscription. You also think about what is the thing to keep the users on the subscription. You can build 10 features

subscription. You can build 10 features and just keep one user there where you can just build one feature and keep a million users there. So prioritization

matters like using the business frameworks to analyze strategy that is a consulting way of approaching this right. uh the interesting way a product

right. uh the interesting way a product leader way is you combine your imagination with the business framework to have a business plan that is uh reasonable for the leadership and also

it is attractive to the consumers. Yeah.

So today we are going to talk about new technology adoption cycle. This is uh my favorite topic when I was studying business strategy. This is the concept

business strategy. This is the concept that gave me the uh shocking moment and it is still very helpful for my today's work and also very helpful when you look

at how AI as a new technology progress to the massive market. So this is the adoption cycle. Uh there we have

adoption cycle. Uh there we have technology enthusiastics, visionaries, pragmatics, conservatives and skeptics.

Here we're talking about technology enthusiastics, visionaries uh as the early market and then the bigger part the mystery market is pragmatics and

conservatives and then we have skepticals. So first of all technology

skepticals. So first of all technology enthusiastics uh they're the ones that are who are geeks. They fundamentally

committed to new technology. They

believe it will transform and improve their lives no matter whether it could do so or not. So they basically feel excited about new technology. whatever

comes up, they're gonna try it. So, it

doesn't matter whether your product can actually solve their problem. If you

have a cool stuff, they're gonna try it.

And they love tingling uh with new things, figuring out how to improve it.

First customers for anything truly brand new. I remember uh two years back, two

new. I remember uh two years back, two years back when um first came out, there's this company there uh where like their product release uh has been very viral on Twitter and LinkedIn. They were

doing a pin on yourself. So like

basically you can give instructions to the AI pin and the AI pin could help you to like order deliveries whatever right and at that point the product release is very sexy. Uh they're doing like this

very sexy. Uh they're doing like this product release in the Apple way evolutionary uh product to free yourself from uh laptops and and cell phones and

then you can see people's reaction to it. Uh a lot of people actually bought

it. Uh a lot of people actually bought it right to try it out and everything.

Those are the gigs. uh because you don't even you don't really know whether it could perform well. Uh in the product demo they waited the instruction to open the door dash and order the food for you

for like almost seven minutes. Uh but

still these people believe that it will transform their lives, right? They

believe that this product could be better. So the pros is they're huge

better. So the pros is they're huge influencers of others who may adopt new technology. They're going to buy this.

technology. They're going to buy this.

They're going to try this out. They're

going to post about it. they're going to say like, "Oh my god, this new technology is so fascinating." And the cons is they always do not have enough money.

And the second part is missionaries.

Uh the people who will adopt an innovation in order to make a break from the status quo. The first group to try and gain competitive advantage through innovation. So these are the people are

innovation. So these are the people are not only fascinated by the new technology. They think that your product

technology. They think that your product can give them competitive advantage to win over their peers. So they allow your product to be not perfect. They allow

your product to be a lot of bucks. But

as long as your product can solve their core problem and can fundamentally improve their productivity to win over their competitors or their peers, they will try your product. So the pro is

these are the people bring real money to the table. They're very

the table. They're very businessoriented. The con is they

businessoriented. The con is they require extraordinary customization drawing huge resources from the supplier. What do we mean by this? These

supplier. What do we mean by this? These

people still look at your product whether they are helpful, right? So they

want your product to be tailored to them. So that's where the extraordinary

them. So that's where the extraordinary um customizations come from and together with the tech enthusiastics these are the people who want to be the first and these are also the majority people who

are in Silicon Valley and San Francisco.

We comes to pragmatics these are the people who uh make the bunk of all tech purchases over time. Evol illusion not revolution looking for business benefit

not technology uh resistant to being to being the first prefer to buy from market leaders. This is very important.

market leaders. This is very important.

They do not want to think about which product they should purchase. They do

not want to compare multiple products.

They develop the trust with the market leader and they directly buy from market leaders. And their behavior when it is

leaders. And their behavior when it is time to move, let's move together. When

we pick a vendor, let's all pick the same one. Right? Once we start a change

same one. Right? Once we start a change to the new way, the sooner we get it over with the better. And the

consequences is they get overwhelmed the supply chain. Uh they overwhelm the

supply chain. Uh they overwhelm the vendor they choose. not need enough attention and also they turn the migration into a stampit. These are the people who uh need others to have been successful with innovation before they

will dive in. And then we comes to conservatives. They will adopt the

conservatives. They will adopt the technology as the last resort. Very

price sensitive, highly skeptical, extremely demanding. Their expectations

extremely demanding. Their expectations are rarely met and reinforces negative views of technology. They are the people who probably will use your product when

half of the world is using your product.

But as when they use your product, they're going to have so many complaints that you as the product manager of your product, you will feel like what is the value of my life? Kind of skeptical of yourself. They will complain about

yourself. They will complain about everything because they just basically do not like to adopt new technology.

And their value proposition is they just want the stuff to just work. And later

we comes to skepticals uh not really potential customers uh perceptual critics uh do not sell to them sell around them. You will find it extremely

around them. You will find it extremely difficult if you target them as your target audience. So it is fine. Uh they

target audience. So it is fine. Uh they

are a minority. So do not need to target them when you are uh the product manager or like the uh the starter founder. The

highest point of the market uh which is the like high point on the mainstream market we call it the main street. And

why do companies have to go to the main street? We will talk about a lot about

street? We will talk about a lot about how can we help the companies to get to the mainstream market. But there is a fundamental question here. Why do you have to be there? Why can't you just be

a niche company selling to niche customers? Right? Because you are a new

customers? Right? Because you are a new technology. So when it comes to new

technology. So when it comes to new technology, it is not just application that you can for example like B2B SAS, right? As long as you have some

right? As long as you have some customers, you could uh have a positive revenue. If you are a new technology,

revenue. If you are a new technology, disruptive technology coming up, you have heavy R&D invested before the product launch. So you have to target

product launch. So you have to target the mainstream market at least cover your R&D cost. So that's where we call the mainstream the highest point of this graph to cover your R&D cost. So that is

how this different uh segments are calculated. Um so when you first launch

calculated. Um so when you first launch your product you will find that technology enthusias will just try your technology and then when it comes to visionary those people buy your product

and then when you comes to have the market share that cover your R&D that's like the all the pragmatics that's bought your product and then we're talking about the rest of the market and

those are conservative skepticals we can uh just ignore those people.

Um can you explain more about why specifically R&D is that because R&D is usually a very like large chunk of cost >> because this is new technology adoption

right so uh when you develop the new technology you have a lot of investment um already put into and if you do haven't target the mainstream uh the

mainstream market then you cannot cover your previous uh R&D cost so this graph is not for uh every product this graph is only for new technology. Let's just

say right now you're trying to uh manufacture a car, do an electric vehicle, right? And right now you

vehicle, right? And right now you probably do not follow the whole cycle because it is already a technology that massive population already accepted. If

you're launching a product that already exists, you already have competitors.

There is not a new technology. This is

not the graph that you're following.

>> Okay. So this is just about like the like launch of like chatbt basically.

>> Yes.

So after we talk about all the five segments, where are you?

>> If I had to pick, I'd probably say I'm like in between visionary and prag pragmatic because um some people use things in such creative ways. Those are

like the visionaries. Like for example, when I worked at Sunglass Hut, a person I worked with was a real estate associate. And I was like, "Oh yeah, the

associate. And I was like, "Oh yeah, the sunglasses suck." Like what are you

sunglasses suck." Like what are you going to do? Ask Meta if a tree is a tree. Like it's a waste of time, right?

tree. Like it's a waste of time, right?

That's the first thing I was like, "Oh, who would pay 400 bucks for this?" And

he was like, "Oh, wait, but like I do real estate walkthroughs and when I walk through a house, I'd like to, you know, talk, use my hands, open certain doors, and it sucks doing

that on a phone, right? And showing people things when I

right? And showing people things when I could just do all that stuff with the MAD glasses and like forecast it live and walk through the whole house." And I feel like that's a very visionary thing,

right? But obviously you come up with

right? But obviously you come up with like once you see that it can be used in such ways then I people like I guess myself like oh wait then I could use it

for a thing like you know XYZ but I would you know really beg to differ if someone was to claim that I would come up with like a really cool idea to use something first. It's more so like the

something first. It's more so like the like the 30th idea. I'm like wait if this is used to make money in this way or used for this use I can think of other ways but I'm not the first person

to do that so pragmatic >> you started to look at people around you differently and there are several ways

to uh segment users uh their comfort to new technology is one of them and it's a very interesting um thing and throughout

this course we will always say that just leave the skeptics there um it's fine like they uh you don't need to target them. If you think about this um the

them. If you think about this um the whole like internet industry, right, the skeptics are the people who are probably like still not using Facebook, right?

Today, right? We're not talking about they're not like affording a laptop or a phone, right? Uh we just talk about how

phone, right? Uh we just talk about how comfortable they are to technology. If

those people are still skeptics and they do not use a social media today then sadly for this new world their voice don't matter anymore. You see this

as technology adoption cycle. It is also for different um revolutions how we filter out um people at one time at a

time. I assume companies also like an

time. I assume companies also like an already existing company only fits in between like conservatist or like conservative and like pragmatic and not really visionary unless your company's built on that visionary thing if you

know what I mean. Similar to how we talked about statuses last time like cash cow versus you know other stuff they can only really like JP Morgan's like conservative or pragmatic I don't think they could you know be a visionary

in this.

>> Yeah. Yeah. That's very true. uh for

most of the companies let's say for LinkedIn right we're not targeting pragmatics uh we already way past that time and so now we're targeting

conservatives and uh all the customer service tickets you can see people are just complaining about your product all the time and sometimes you need some visionaries and pragmatics to remind you

that your product still work otherwise if you look at their tickets you will just forget about oh LinkedIn is actually still helpful for a lot of people So conservatives always complain.

>> I am a visionary plus pragmatic part. I

I'm not whole pragmatic because one of the point which you mentioned in your pragmatics that they have a behavior that we all seek the same vendor. I do

look for a business benefit but if I'm coming up with the new technology I will I have a tendency that I will go with the new age company who is working on that because

uh legacy company are catching up with the technology I don't like that if I do something I don't like to catch up with the technology but I want to be the finer

like >> yeah this this user segment is going to make a lot of people feeling self reflected like you're going to think

like oh am I a visionary how can I be a visionary um that's a very interesting uh reflection >> so visionaries are innovators but pragmatics are having a business I'm

someone who want to do both and is so bad like I expect so many things from the I feel I should be little less harsh

>> nice >> uh and another interesting thing is uh usually when you talk about a startup, right? A startup may be working on new

right? A startup may be working on new technology. Uh when they're only

technology. Uh when they're only targeting technology enthusiastics or um or even visionaries, this startup, what you could see is they don't hire product

managers. They just need their CEO

managers. They just need their CEO product manager job comes in when you started to target u the mainstream market. the earlier like the companies

market. the earlier like the companies or the product stages um the earlier in this adoption cycle for a company like LinkedIn or Meta yeah we're mostly targeting conservatives sometimes you

like let me um give you a very easy example when I first joined LinkedIn uh I work on user growth team and LinkedIn used to be a very chill company uh how

how can I say that because uh at that point I was I joined the company it was 2021 and if you think about the company founded uh like time it is already like

15 to 20 years of the company right and something that I always find fascinating is by the time that I joined LinkedIn the only way to log in is still email

and password yes people have to have a email address and password no people cannot use third parties right all of these are people who are in technology

enthusiastics visionaries and pragmatics who see the value of LinkedIn and they will join LinkedIn no matter what, right? And then you will realize that

right? And then you will realize that you build a bunch of third party login.

You try to make this as frictionless as possible. Um you have this feeling of um

possible. Um you have this feeling of um LinkedIn's value is already there. What

you're doing is just to make the funnel way easier for these people. Then you

come to a question like shouldn't you know LinkedIn's value no matter what?

And uh yes, we are making your life easier, but like why there are additional signups and sub subscription purchase, right? Uh because

purchase, right? Uh because conservatives do not have that many compelling reasons to buy or to use your product either. Uh

because they are not a big fan of adopting new technology. They use it because they just want the stuff to work. They use it not because they want

work. They use it not because they want to get company insight whatsoever. They

use it because they want to land a job from LinkedIn. But is LinkedIn going to

from LinkedIn. But is LinkedIn going to be the only platform that they can lend a job? Not necessarily. So if your login

a job? Not necessarily. So if your login is very frictional, then they're going to choose other platforms to use. So uh

when you target different user segments, you have different ways of thinking about your your product.

>> Pragmatists talk uh always choosing like the leading vendor, whatever. So in

terms of like AI, they be like, "Oh, open AI, whatever." They all just like march on that way. And you said that conservatives will, you know, try to use your service and if they don't like it,

they'll move to something else. Is that

true? Like if I was like, "Oh, LinkedIn's hard to use. Am I going to go to um what's an alternative here?" Like

the like job, right? Like am I gonna do people do conservatives even do that? I

feel like that's more of a like a visionary not even a visionary thing, just like a pragmatist thing where it's just like, hey, you know, I'm not getting anything out of this, but all these other things show promise, I might

as well just use that.

>> Versus conservatives, they're slow to make that change to begin with. So why

exactly would they be more willing to you know divulge and go away from the industry leader is my question >> because you always have some other tools to help you finish the job like before

LinkedIn existed you probably asked your dad to refer you a job back to the industry problem we talk about the first class right LinkedIn is not creating a new industry LinkedIn didn't uh create

job search right LinkedIn didn't create professional networking you do professional networking and job search anyways with or without LinkedIn it just link LinkedIn is a more helpful way for

you to do so after talking about um all of these segments. Now uh imagine that you are a star founder or you are a product manager of a early stage startup

right what do we do we uh see the intestics who will educate the visionaries make the visionaries happy so they will be references for the

pragmatics and uh generate the bulk of your revenue serving the pragmatics and become the market leader and set the standard and leverage their uh the success to make stuff reliable and cheap

enough to appeal to conservatives and don't irritate the skeptics.

That was how people think about this.

No, it will never work. Why? Because

there is a huge gap between visionaries and pragmatics. And I feel like a lot of

and pragmatics. And I feel like a lot of us sometimes, let's be honest, we fell into that gap. Like we are the user segments that are exactly in that gap.

Uh we will talk about the gap later because a lot of times what you guys just talked about, right? you sometimes

are confused about whether you belong to visionary or pragmatics. Um sometimes it also demand it depends on the domain that you're looking for. For example,

for uh for some of the domain, you probably are more familiar with the domain. Your learning curve is like more

domain. Your learning curve is like more flattened, then you probably want to uh look at all the offers out there and choose one option that work for you exactly for you, right? And for some of

the areas that you don't want don't have time or don't want to do the research, then you want to go with the market leader, right? Uh for me, it is the same

leader, right? Uh for me, it is the same like uh I go with market leader most of the my time when it comes to content creation. So I don't bother uh to think

creation. So I don't bother uh to think about which product to choose. I did

choose some of the products back then when it comes to like AI video editing.

I tried those products. The products do not work as well well as I thought. Um

so I chose the indust industry leader later. Right. Uh I am the typical

later. Right. Uh I am the typical pragmatics who doesn't allow bugs. Um

but back to the gap between these two segments. The visionaries are intuitive.

segments. The visionaries are intuitive.

uh support uh revolutionary change, constran uh break away from the pack, follow their own dictates, takes risks motivated by future opportunities and seek what is possible.

And for the pragmatics, they're analytical. They support evolutionary

analytical. They support evolutionary change. They are conformist. Uh stay

change. They are conformist. Uh stay

with the herd, consult with colleagues, manage risks, motivated by present problems, and pursue what is probable.

And the biggest problem between these two segments is the pragmatives don't trust the visionaries.

That is the biggest problem and that is why the visionaries cannot educate the mainstream market. Let me give you a

mainstream market. Let me give you a little rehab recap about my own life.

You live in San Francisco in 2021. Some

people tell you that oh there is a very cool startup his name is OpenAI. You

would think like dude you're crazy. It

is a pretty like freaking chatbot, right? What what is going to be

right? What what is going to be innovative about that, right? I'm a

pretty uh I'm a typical pragmatist. And

then uh when it late 2022 when charg 3 came out, some people will be like, "Oh my god, this is going to improve productivity so much." I will be like hallucinate a lot. Why it will improve

your productivity? Right? I don't

your productivity? Right? I don't

understand this. So you will think that those people who recommend OpenAI or ChatgBT to you are crazy. They are in a bubble right because they cannot uh talk

into your painoint. They the product cannot serve you. So you're not going to use it. And people like Pragmatics they

use it. And people like Pragmatics they won't use it when oh their colleagues talk about ChBT. They will be like oh um did you you were talking about your

relationship problem with your uh partner. Uh how is that going? and then

partner. Uh how is that going? and then

your colleague will be like oh I talked with chat GPT I think I can solve it that is your aha moment uh and you will be like oh maybe I should choose chat GPT as well. So yeah this is the gap

between these two segments and there is a huge trust gap as well right there is a fundamental gap the chasm between the early market enthusiastics and visionaries and the mainstream market

basically the pragmatics the visionaries make lousy uh references to the pragmatics uh and the pragmatics want references from other pragmatics. This

is my favorite business book. Uh this is um my turning point of my perception of business book that I thought that business books are all useless and uh and um um bullshitting. Uh this is the

first book that actually I found it very practical and helpful. So this is a little uh grogging of the new product or new technology adoption. Um so you can see the reaction um from the different

segments. The first one will be wow at

segments. The first one will be wow at all the new technologies and back then the products will be very pathetic like it doesn't solve right it just have a cool technology uh and then it started

to work as a product then the visionaries will be like ah brilliant and the product is trying to cross the chasm and then the pragmatics are

thinking like oh I heard who else have one and then the conservatives will say that oh I found this product at the Sam's club right so meaning that you

have more distribution uh at that at that point and then the latest skeptics will be like what new product again we just talk about the cas credibility gap

lack of respect for the value of colleagues experiences taking a greater interest in technology than in the industry failing to recognize the importance of existing product infrastructure and overall

disruptiveness this is why the visionaries do not have trust from the pragmatics being a product manager at LinkedIn and and working on side project myself, I feel like I'm multi-personality.

Okay, sometimes when I see some customer feedback, I'll be like, I need to solve every customer feedback. Uh I need to solve every problem. I need to make this product perfect. And on the other side,

product perfect. And on the other side, I will think about dude, if this is LinkedIn like 15 years ago, you will say that you you won't say that at all. So

yeah. Uh and also the interesting point of this is uh if you work at a big tech let's say right your job is mostly targeting the conservatives your thinking process is very different as an

early stage startup founder. So yeah,

that's why uh when I have my side project and I just keep meeting um VCs and other startup founders, I feel like I'm multi-personality. Uh the way of you

I'm multi-personality. Uh the way of you thinking is very different. Just to be more visualized how what are the differences for the early adopters, they will be like tech is cool, love

innovation, coloring the bugs, uh will pay premium, they're visionaries and for main street uh for or for main market, the tech is a tool. When it comes to new innovation, they will be like so what?

And they hate the bugs. uh they are very price conscious and they are pragmat uh pragmatic. Now we're talking about how

pragmatic. Now we're talking about how to cross the chasm.

Target each market. Just remember these three words. We're going to echo these

three words. We're going to echo these three words all the time throughout this course today. Target each market.

course today. Target each market.

Why is it so hard for established firms?

Right? Why so hard for established firms to have new innovation?

Remember this. So for established firms, they think differently. They do not think like they were startups 10 20 years ago. That is the problem. When you

years ago. That is the problem. When you

have a new direction presenting to your leadership, your leadership will be like this isn't isn't aligned with my knowledge from my 20 years at the firm, right? This is not how our firm do

right? This is not how our firm do things. This is not our value

things. This is not our value proposition. But then if you're talking

proposition. But then if you're talking about what if we build a new product, then there will be even more friction when you do that. In big firms, you have to accept the fact that like if you're

doing new innovations, right? The

assumption needed is more than your knowledge owned. And this is what big

knowledge owned. And this is what big corporations do not want to accept.

We're talking about how to cross the chasm. We're talking about the market

chasm. We're talking about the market development checklist. I'll give you a

development checklist. I'll give you a checklist. The first four things of this

checklist. The first four things of this checklist, the target customers, compelling reason to buy, whole product, partners, and allies are must haves for

you to cross the chasm. and the

distribution, the pricing, the competition, the positioning and the next target customer is nice to have as an AI startup like lovable. I'm thinking

about now I have definitely have tech enthusiasts trying my products. I have a bunch of visionaries telling the public that lovable is such a glob and now I

want to target the main street. Um, how

I can target the main market, right? I

have partners and allies. I attach

myself with LinkedIn premium. Uh

LinkedIn premium have a better targeting. LinkedIn member is roughly

targeting. LinkedIn member is roughly what I'm targeting as well. They're

white collar workers. They're more um open to trying out new technology. Right

now AI as a technology my opinion already passed the main uh already pass the chasm. I'm trying to be one of those

the chasm. I'm trying to be one of those companies that have a bigger partner, have a bigger ally for me to cross the chasm as well.

That's why we have a bunch of perks for premium subscription. Uh the whole

premium subscription. Uh the whole product the minimal offer uh the offering necessary to ensure that the target customers will achieve their compelling reason to buy. Uh there are

so many uh like different parts of the whole product. For example, having a

whole product. For example, having a good onboarding flow is one of them. Do

not be the uh headache for your customers. Have a good customer support

customers. Have a good customer support is also one of them. If you are saying that oh DJI is creating the first wrong out of this world right then if you don't have a customer service then the

customers will think like oh am I going to get a refound or return my product or reflate what if it is like broken right so you have to have the whole process

your customer obsession your uh product leadership to target um those people in the chasm then we talk about uh the nature of markets where there is no competition there's no market

competition in early markets come from the alternatives rather than from a competitive products. Uh resistance to

competitive products. Uh resistance to new ways in uh inertia inertia. Uh so

commitment to the status quo, fear of risk, lack of compelling reason to buy.

So this is we are talking about the people in the gap has commitment to the status quo, the fear of risk, the lack of compelling reason to buy and the nature of prag pragmatics. The purchase

decisions are made by competitive bid.

So uh the comparative evaluation of products and vendors in a common uh category competition therefore becomes a fundamental condition of purchase. You

need to position your product to create a competition that you can win and must be credible and relevant and attractive.

Do you still remember JTBD? Yes. Job to

be done and the whole product is the job to be done. Test for whether a job and is a business opportunities. There are

three ways. Does the idea target an actual job to be done that enough people have? Is the idea a meaningful

have? Is the idea a meaningful improvement over the current way people fulfill their job to be done? And does

the value of the idea to customers exceed the cost of the idea to them? The

whole product is trying to build the trust with the pragmatics. You don't

make the pragmatics confused. You don't

give them a buggy experience. You make

you make sure to tell them that whatever you encounter in the product experience mostly going to be successful. But even

if it is not successful, we're going to refund you. We're going to make sure

refund you. We're going to make sure everything is okay. You're not going to get hurt. You're going to get to point B

get hurt. You're going to get to point B safely. Uh here are some of the products

safely. Uh here are some of the products and you tell me whether it already crossed the chasm. The first one is Meta Oculus VR headset.

>> Like how many people do you know that use those? And like I wouldn't either,

use those? And like I wouldn't either, but that's just like a pragmatic thing.

I don't know so many people use it, but you still see it used often, especially like um in the gaming world, how many gamers use um what is it? The VR

glasses. Like not a lot, but you do find like a few every now and then like online especially. You know, your

online especially. You know, your technology enthusiasts.

Um and I actually don't know of any visionaries using it. Probably for like random company stuff that I couldn't imagine. So I I wouldn't think so

imagine. So I I wouldn't think so because I don't even see visionaries or I don't hear about visionaries using it let alone you know pragmatists or pragmatists. So that's why I don't think

pragmatists. So that's why I don't think it's crossed the chasm >> and even the easiest part to know about is from their ads. They are not giving

meta VR ads. So their ads is more about the use cases which that it can do. It's

you can easily get a brand it is it's technology industry or pragmatic from the ad which they are running the type of conversation which they are having with their audience like positioning.

Yeah, that's a very interesting point.

Um, I usually get a lot of insights from the ads and media coverage from for a specific company. Usually the official

specific company. Usually the official um media coverage from the company is how the company want you to think and you can find some insights about who they are targeting uh they are trying to

target and what is the core problem that they are trying to or the core message that they are sending out. Um for when it comes to marketing there are two things very important. One is marketing

channel and the other one is marketing message. Um, and both of them are gonna

message. Um, and both of them are gonna provide you some insights about what this company is trying to do. I'm

sitting in this way because I want to show the little Oculus in my background.

And um, >> yeah, like how much do you use it?

>> I use it very rarely. I'd agree with y'all. I'm not trying to debate. Um, I'm

y'all. I'm not trying to debate. Um, I'm

just trying to show that I have a little Oculus here. Like unironically, the only

Oculus here. Like unironically, the only times I've like noticed people use it extremely often has been like children for some reason. Like kids who

I've seen own consoles for some reason always have a VR headset and they're always using it. Like so they're all visionaries or something or tech enthusiasts. I wouldn't know. But in

enthusiasts. I wouldn't know. But in

terms of normal people, like not often at all.

Honestly, I think uh if money is not an issue, I will definitely use vision pro way more than Oculus.

>> You have pro.

>> If money is not an issue, that's why I have the condition. Yog

you guys have too much expectation of how much my salary is working as a product manager at LinkedIn. No, I don't have a vision pro, but I tried vision pro uh at the app store uh Apple store.

It is pretty helpful and the setup is very easy. The Oculus, the reason why

very easy. The Oculus, the reason why I'm not a very frequent user for Oculus is that the onboarding is so like annoying. Like you have to choose

annoying. Like you have to choose whatever app that you are trying to like onboard. Like it's like you have a new

onboard. Like it's like you have a new phone without any preload, right? There

aren't any apps on that thing. You have

to download every single thing on that device. Like why? I already have my

device. Like why? I already have my laptop and phone. Like what is the uniqueness of your Oculus? Well, you're

the type of person that like when you get a smart TV, you expect like Netflix to be on it already and you're too lazy to go like install Netflix.

>> Uh have anyone know one X robot?

>> No, I think that answers the question on whether it crossed the chasm or not.

>> Uh cursor, >> we are near to become the king.

>> Hey, can we say is currently crossing the chasm?

>> It's already crossed.

Bro, >> you think it's crossed? Like when I think about like do does does Facebook like make sure like oh everyone has a cursor like subscription like that that's what I consider like crossing the

chasm like oh all the employees have access to XYZ tool at these big startups like does does a EY engineer like that's a slowmoving company that's like a

pragmatist like company right like does everyone at young does a software engineer have a cursor subscription provided to them if the answer is no I'd say like not pragmat atic and that's a

consulting company and I'd say they're extremely pragmatic just because it's a consulting company like does everyone at axenter have a subscription to cursor the software engineer I'd also bet no so

I'd say it's crossing the chasm because all these startups are adopting it and it like a lot of people are using it independently so you'll see consultants using it or people at Google using it but I don't think they get like the

company actually goes hey everyone us this is now the meta this is the new standard so I don't think it's crossed the chasm I think with within the tech industry

like for people who are um tech professionals I would say cursor has crossed the chasm within the tech industry but not within the general

public.

>> You can't just separate like tech industry and the general public. This

graph is for segmenting the tech industry and the general public. No, but

I do think that there like say pragmatist in the tech industry and pragmatist in general public are different because like their knowledge

are different and and like their co-workers are different, their working environments are different.

>> Thank you for letting us know that tech industry is a bubble again.

>> But like like what's what's something that's crossed the chasm? I'd say that's um uh like like some of these idees, right? Like oh, everyone has a

right? Like oh, everyone has a subscription to it, right? Like oh, I'd say that's crossed the chasm. You know

what I mean? Like uh your your workplace literally provides it to you.

>> So you basically think that even for tech industry itself, it doesn't it hasn't crossed the chasm yet.

>> Yes.

>> Right. Because the the reason why Lexian is separating the segments out is because cursor is for developers more for like semi-developers. That's why you want to sep separate the industry out.

But that goes to back what I was saying earlier like um you know uh if I got a developing job at um whatever company like a tech consulting company they'll

be like hey uh everyone gets a subscription of visual studio right or virtual studio or visual studio code right and I'd be like oh that's crosscasm that's become a standard you

know all these big companies use it and it's a tech company right so I'm like oh at the end of the day this consultancy uses it because they know they could be more productive but at the same time. I

don't know if any like big fan company tech consultancy or anything is providing free subscriptions to like cursor or like from the get-go, but a

lot of engineers probably use it, but I don't think it's like the standard where companies have acknowledged it, right? I

don't know if that makes it like not makes it have not crossed the chasm but like from what my understanding is I would say it's on the way to crossing the chasm but isn't there yet unless you

want to split up the you know the pragmatic section into like se like bits of like hey at this point most employees use it and then at this point most

companies adopt right like capitulate to their employees. I think you brought

their employees. I think you brought there are two points that I want to make. The first one that you you are

make. The first one that you you are talking about distri distribution. Yeah,

distribution is very uh difficult because um most of the companies are enabled by GitHub. So GitHub copilot might be the technology that you were discussing because they have more

distribution here. Another point is you

distribution here. Another point is you focus more on the employee adoption rather than whether the company have the collaboration which is great. That is

how you think about this. Um I think today in the tech world companies are biased because they think that collaborating with uh AI coding company is at least uh the right thing to do. So

they will do this anyway. So how

comfortable uh software engineers are adopting these AI tools in their work is a good question. It is complicated for the AI scene today because uh you definitely need partnership very strong

partnership to add on your distribution.

Um, and that's why OpenAI and Microsoft collaboration is so crucial for both companies. First of all, cursor is too

companies. First of all, cursor is too expensive to be acquired.

That's why Windsurf got acquired, not cursor. And cursor is way bigger than

cursor. And cursor is way bigger than Windsurf. And if you're not getting

Windsurf. And if you're not getting acquired, then what partnerships do you have? The last company, Framer,

have? The last company, Framer, >> you know, Yogash and I were like, "Oh crap, we should make portfolios or whatever." And like the first thing we

whatever." And like the first thing we see is like 20 framer websites. And

we're like, okay, I feel like this is very good. We're like, oh, this is this

very good. We're like, oh, this is this is the tool most people use. So, I'm

assuming it's very mainstream. It's, you

know, crossed the chasm a while ago.

>> So, crossing the chasm represents a transition from product based values to market-based values.

So, from product based values, you're actually thinking about what is additional value that the product bring to the table. And market based value is your reputation, your marketing, the

message that you send out. How to cross the chasm. I add a bowling alley here.

the chasm. I add a bowling alley here.

So the the business work is uh the bowling alley. So that's why I added a

bowling alley. So that's why I added a little graph here. What do you mean by bowling alley? Right? You have the

bowling alley? Right? You have the initial target. You have your technology

initial target. You have your technology enthusiastics and visionaries adopting your product first and then you target new segments. either target existing

new segments. either target existing user segments uh existing user segments but a different problem or you target a different user segment with the same problem right and then you expand out

that's how you can have the bowling alley to target the mass majority of the population so you originally have a new customer doing a new job uh no product exist and

then you do uh two sideways one is existing customers getting more job done often um like related jobs or the new customers doing an existing job. So

that's how you can expand uh by using a bowling alley and then you have your existing customers doing uh getting a better uh a job done better and then you start doing this again. So you target

existing customers getting more job done or targeting new segments doing the exact same job. The rules of a bowling alley um you cannot be opportunities

and you cannot do random niches. So no

leverage uh and huge cost. Be the first in your niche, not the second one in someone else niches. Uh two criterias.

The segment has a compelling reason to buy. You solve a problem and the second

buy. You solve a problem and the second isn't well served by anyone else. So

that's how you can choose a specific segment to expand to. Here I have a example of chat GPT. If you think about the initial target, right? Uh now we're

talking about GPT2 kind of stage. uh at

that time chipdr only only have text generation and understanding right this is the original capability they have they probably have techn technology enthusiastics that are trying are

willing to try the product or the visionaries realize oh actually you can draft the email for me right uh but that's all the people that they get if they want to get to the mass majority

they need to improve their model capability to target the new segments so what do they do in GPT3 there there are new uh two new capabilities or like

better capabilities that serve a new user segment. One is the conversation

user segment. One is the conversation uh which is going to the companion direction. People who want emotional

direction. People who want emotional companion, people want to people who feel lonely, they want to have someone to talk with or you go with the academic route. You improve your academic

route. You improve your academic capability which is targeting students who are thinking about how to finish their assignments.

So these are two are solid market uh market segments and then in GP4 you expand to more. You added search for knowledge seekers who originally maybe

use uh Google or perloacity for a question. Right now OpenAI have the

question. Right now OpenAI have the capability on checkp as well and then you have reasoning which is the fundamental capability to enable agent

doing task for you. And then you have multimodality. This way you are

multimodality. This way you are targeting artists, creators, analyst for graph analysis and it could enable like it couldn't do a perfect job but it could enable some of the user segments

using this to do their job.

And then in the GP5 recent release we see there is a screenshot that add different personalities right then you can do the job even better being a therapist or helping people to learn

right as a learning companion uh and having conversations with the customers uh with your users or you go to the other route you have your generic expertise you're trying to be a PhD

level in every domain right so this is how you can target one single little segment at one time and eventually hopefully we can reach AGI um but uh solving one single problem at

a one time for each release of your product. Now let's dream bigger using

product. Now let's dream bigger using the bowling alley. Think about right now we are able to travel to Mars and how can we target step by step to make sure

all the human beings are happy to move to Mars.

>> Initially target like space enthusiasts, right? People were like, "Oh, I want to

right? People were like, "Oh, I want to do this." And you could be like, "Oh my

do this." And you could be like, "Oh my god." Yeah. All we have there is you

god." Yeah. All we have there is you could just have like, "Oh, we have a cool tour spot. You could take some cool pictures." And people be like, "Oh,

pictures." And people be like, "Oh, okay." And then, you know, they take

okay." And then, you know, they take little spice flight or whatever. And

then you could build like, "Oh, um, now we have basic living accommodations."

And the target market there is like governments who want to send their criminals to Mars and be like, "Oh, you could send them to another planet." And

like, okay. It's like the the book The Moon is a Heart's Mistress. If you guys have read that, it's a good book. And

then after that you'd be like wait we can make living accommodations nicer and you have like AC and they be like wait people who just want to live cheaper lives or something like the rural life

and you just slowly add things to attract different people and then you know I got then it's like is that is that a no is that like a shaking head did it completely wrong?

>> You're going to ask the government to send the criminals to Mars first then what is the reputation that you're creating for Mars? Are there any other people after the criminals are willing to go to the Mars is the question that I have.

>> Imagine like imagine I'm doing a crime and you are sending me out of the earth.

So my government is spending money also to like get you into the jail and also to move out of this.

>> Wow. So much money I'm wasting on a one criminal at the shot. Then

>> it was in Australia. It was like oh my god there's no living accommodations.

Who needs the least living accommodation stuff? Criminals. And then it's just

stuff? Criminals. And then it's just like bump bump like oh we can you know have people pay to send their criminals here and then we can slowly make it like

more livable and then you know raise the customer like target different customers like this is this >> you are you are the CMO I'm going to get >> exactly see this is how you make money

in the beginning you're going to have like random tech enthusiasts trying to take photos I'm going to have like hundreds of thousands of prisoners coming from like America, China, Latin

America just flooding in just like all cash with like minimal stuff required for them. They'll have like basic food

for them. They'll have like basic food and like housing accommodations and that's it.

>> Let people who have distribution and who can afford to move the move to Mars first because one they won't care about money. Second, they have distribution

money. Second, they have distribution because people like to immediate behavior who who are at their upper side of the pyramid.

>> And I guess he's going the Tesla route.

He's going like the oh, we have the speedster and then you go down.

>> Yeah, he's going through the Tesla route.

>> I'm going the route of the people. Okay,

I'm going like the cheapest route and then we get to the top cuz I care about the masses.

>> I definitely don't think sending criminal is the right way to go. Ham, if

you think about this, right, you have to think about like for example human beings exploring a new territory like on earth, right? Um usually what attract

earth, right? Um usually what attract human being to go on that space is that there is resources right so that place

is going to provide some value to human beings if that place doesn't have anything then why should human being move there how there's any criminal there it's based on the fact that Mars

is basically useless a useless planet and it is just more land right then you want to send criminals there but I think if we really want to uh relocate all the

Earth people to go to Mars. We have to understand what Mars can provide and then we start from there. We could at least have a product to target

missionaries, right? So for example,

missionaries, right? So for example, Mars have a let's say whatever I'm just making things up um ingredients in their soil that uh the companies or the

governments want, right? Then uh those people who are visionary and find that helpful will be like oh actually earth doesn't have this ingredient that much.

then we probably want to uh exploit Mars because we need that ingredients for more products and if they need that ingredients for more products they probably need to build factories there which is huh employments uh so you can

send more people there that's how you can target segment by segment like using the business framework to analyze strategy that is a consulting way of approaching this right uh the interesting way a product leader way is

you combine your imagination with the business framework to have a business plan that is uh reasonable for the leadership and also it is attractive to

the consumers. And then what's next?

the consumers. And then what's next?

You went through the bowling alley and then you have mass market adoption when the general marketplace switches to the new infrastructure paradigm. Um so then

there is a new word called tornado. So

for the tornado effect is um your product got bought in by the majority of the pragmatics. they're uh rushing in to

the pragmatics. they're uh rushing in to adopt whatever is the market leader, right? So from the bowling alley, you

right? So from the bowling alley, you create your reputation. From your

bowling alley, you have a little more adoption than your competitors. Now you

started a competition that you just want a zero sum uh game with your competitors. Right? Through the tornado

competitors. Right? Through the tornado effect, you want to be the uh market dominate.

And after this, you will see this type of graph, right? from uh market share by revenue, you got pretty much half of the market. So half of the market is buying

market. So half of the market is buying your product instead of your competitors. Market share by profit is

competitors. Market share by profit is even more more because you have more people adoption. You have higher

people adoption. You have higher negotiating power over your suppliers.

So your margin is usually the highest. I

actually saw a lot of you guys adding graphics like this in your open ad report. So this is another fact to tell

report. So this is another fact to tell you that AI or LM as a new technology already passed the chasm and they already passed the tornado effect. Now

you can see that Chad GPT has so much adoption or market share. The rules of the tornado attack your competition ruthlessly. Expand distribution as

ruthlessly. Expand distribution as quickly as possible. Ignore the

customers. Um because the customers here are not important because pragmatics are just going to find the industry leader to buy. So you want as massive

to buy. So you want as massive distribution as possible uh have as much capital to ruin your competitors as possible. The pragmatics want rapid

possible. The pragmatics want rapid deployment of a standard product. So

they're not going to compete your product over other people. They're just

going to adopt as fast as possible because everyone else is adopting it.

And then what's next? You got the mainstream. You pass the pragmatics. You

mainstream. You pass the pragmatics. You

are targeting the conservatives now.

Your customers hate you. Your employees

are burned out and demoralized. Sales

are down. The stock price is in the basement. Management team is stabbing

basement. Management team is stabbing each other in the back. Your product is a commodity.

That's what happened when a company is targeting conservatives. Everybody hates

targeting conservatives. Everybody hates you. You can search your products on

you. You can search your products on Twitter, on LinkedIn, on whatever social media. All of the comments are comments

media. All of the comments are comments that hate you. Nobody talk about how good your product is. um because you already passed the main street and then what's next? You want to again target

what's next? You want to again target niche markets. This is what we are

niche markets. This is what we are talking about when LinkedIn is trying to target blue collar workers, right?

Because at that time we pass the main street. We want to target more niche

street. We want to target more niche markets to expand our targeting. The

commodity lovers purchasing agents love the commodity nature of the market can send out the request and get the lowest bit. Conservatives economic buyer

bit. Conservatives economic buyer product isn't worth much to them because they have trouble getting value out of anything technical and this drives businesses in this phase

to develop lowc cost uh disciplines in all phases of the business. So this is the phase that all the values all the features are becoming commality margins

are becoming thinner you were the winner had the reputation but now compete on margins. So that's why you have to

margins. So that's why you have to target niche markets again because that's how you can build up your distinguishable features and get back to reputation based on your different targeting of the end users. Well, they

want uh personal satisfaction, greater products, enhance enjoyment, reduce pain and aggravations, uh perception matters, design matters, detail matters. So these

are the companies that are focusing on the incremental innovation. Create

opportunity the opportunities for value based competition based on differentiated offerings which is the only way out of the low margin commodity trap. This is what we just talk about.

trap. This is what we just talk about.

You have to target different small segments. These people want probably

segments. These people want probably want a premium experience. They want a luxurious experience. Then we could

luxurious experience. Then we could design an experience just for them.

These people just want to work on Whimo, right? Then we can give them two

right? Then we can give them two monitors on Whimo for them to work on Whimo. These people just want to

Whimo. These people just want to experience lives at Whimo. Then we

probably want to give them a bigger screen and let them enjoy movies. And

different niche markets want different stuff. They want different solutions.

stuff. They want different solutions.

And you want to target each niche market to make sure your product is the best product to enhance their enjoyment to reduce pain and aggravation. Previously

you already went through the path of whatever bowling alley tornado whatever right people know that LinkedIn premium can give them priority uh data

and have more insights and now you're thinking about how to let people with niche like requirements still want to adopt your feature right now you want to

create that enhanced joy enjoyment you want to reduce their pain you want to tell them that they matter so who my profile matters right you are building on top of it to give them an emotional

touch and that's what the conservatives want. Um they don't really see you as

want. Um they don't really see you as giving them additional insights of the companies. What are they going to do

companies. What are they going to do with the additional insights of the companies anyways, right? They want to feel good having your subscription. It

also is an interesting thing when you work on subscription models. Why do I put it here? Perception matters. Let's

say LinkedIn premium doesn't have anything but for some reason users think that LinkedIn premium is a very valuable addition. That's perception

addition. That's perception that you can achieve that through marketing. You can achieve that through

marketing. You can achieve that through brainwashing your customers. Right? So

your perception and your offering might be two different things. That's also why you can see that LinkedIn premium adding a lot of perks, right? Do do I add

lovable or cursor? probably doesn't

matter. Do I add Gemini uh pro versus chat gypt pro? Probably doesn't matter.

What matters is we keep adding perks on it. So the users think that we are

it. So the users think that we are adding new things. The perception

matters. So people are going to stay on premium just because they have a feeling of premium up updating all the time and if I keep staying on premium I could get

more benefits and this is also where uh the product management skill set uh in big corporations come in.

very simple example right now you come to HU my profile as a premium member and I want to tell you that actually premium have so many more benefits so there are

two way of communicating this one is tell you that oh try this premium feature right there are two other premium feature that you haven't tried out yet or I could just twist the copy a

little bit saying what's new on premium to give you a feeling of there is always something new on premium so this It's just perception versus offering. The

offering is the same. The perception is different. It is like that. The more

different. It is like that. The more

value you build uh for premium members, the more they're going to stay on the subscription. Another thing uh which

subscription. Another thing uh which matter more is as a product manager, you do not only think about what is new to build on top of the subscription. You

also think about what is the thing to keep the users on the subscription. You

can build 10 features and just keep one user there or you can just build one feature and keep a million users there.

So prioritization matters. So we come back to this we previously talked about right commodity distinguishing features and reputation. So across the whole new

and reputation. So across the whole new technology adoption cycle you realize that uh the distinguishing feature will become commodity during uh when you are

targeting uh conservatives because you are competing on the margin and then you want to target the niche markets again and put yourself back to the reputation.

So for bowling alley you care about product leadership and customer focus.

You want to target one customer segment at one time using your product leadership to expand your market targeting to uh for the massive adoption. For the tornado, your product

adoption. For the tornado, your product leadership matter, your operation excellence matter even more because you have to make sure that your operation can support the tornado coming in. And

at last after you pass the mainstream, you want to be customer focused and operational excellence because at that time you're a big company. You have to support the majority of the population

of the market that you are uh targeting and you have to target niche market again. So you have to focus on what

again. So you have to focus on what customers want more out of your product.

The people who bought Model S even when China doesn't have a single charging point are technology enthusiastics and some of them are visionaries, right?

Because you can see the product could give you benefit. Let's say the the card is smoother and it is uh giving you lower cost when it comes to like the gas

price increasing and it is doing good to the environment and it is a new technology. So you buy Model S and Model

technology. So you buy Model S and Model X uh at that point when the China charging network is not as good um as like the gas station then you are before

the bowling alley before the chasm right and then when it comes to model 3 that is when we are trying to make it a commodity right we are making it price also more friendly to the massive

majority lower cost it has like a lower feature targeting everything right and model 3 is targeting the majority market. The point that I want to bring

market. The point that I want to bring here is when I deliver cars to the owners, the owners act so much different that you can exactly tell that they come from

two different segments. When you deliver cars for Model S and Model X, the owners will be so fascinated by the technology itself. They will be curious about what

itself. They will be curious about what are the distinguishing features from uh Tesla versus other cars. They will be uh trying out autopilot. They will be trying out full self drive. They want to

experience the technology and the product. But when you deliver cars to

product. But when you deliver cars to Model 3 users, Model 3 user are going to focus on whether you have a good guarantee, whether you have a good protection plan, whether you have good

customer service, whether you're from your delivering to like um the whole process of like having license uh having license on your car, having whatever is

a smooth process. So at that point you have to deliver a whole product to win the mass majority's heart. The

assignment for this week is we briefly talk about robots and of course none of you guys think that robots already crossed the chasm.

Our question is now think about yourself as the CEO of a robotics startup. So,

how do you want to build a robot with majority adoption?