Early Adopters and Information Cascades

My business partner at EIP, Dave Bayless, is always ahead of the curve on strategy, financial modeling and social networking. One of the things Dave has been educating me and Vandy on is the importance and relevance of information cascades to our long-term success at EIP (and the success of our inventors).

In the world of consumer products, an information cascade is best thought of as word-of-mouth, as propelled by the presence of key influencers in that word-of-mouth flow. For example, if Joe tells you product X is great, and you trust Joe for product guidance, you are more likely to buy product X. But if Jim tells you product X is great, and you just met Jim at a party, the influence Jim has on your future product purchases is less than Joe. HOWEVER, if Jane, who you also just met tells you that product X rocks, and perhaps even Pat tells you that product X is awesome, you're increasingly likely to try product X. That is to say that word-of-mouth, on its own, is not enough to trigger an information cascade -- there must be present some individual with a disproportionate influence on the information sharing and/or the presence of a "herd" that influences you.

In our world at EIP, we need to think hard about the best way to trigger an information cascade in our new products we're bringing to licensees. If we can influence the way a licensee launches and markets a new product, and increase the odds of an information cascade, we increase the odds of success. This is a whole new branch of theory and there is little fact-based experiment upon which to build. But it's an intriguing new area...

So, in the spirit of having some fun and trying to create some information cascades, I'm launching a new blog (my 3rd!) that is all about consumer products that I own and love. I'm an avid consumer product buyer, and I love sharing the great new products I find.

So, check my First Adopter blog out if you get a chance. The first post (at the bottom of course) explains my reasons and rules, and gives you a sense of why this isn't just another gadget blog...