As a product manager at Klarna, I need to understand how people adapt to new technology and – more importantly – what products they adopt. It’s often useful to look at Everett Rogers’ widespread theory, first described in 1962, showing how this happens in society:
The adoption starts slowly, as only people with niche interests – innovators – accept the novelty. It then increases exponentially until a majority of the population are using it. Finally, even the most resistant and technology-averse portion of the population (think of your most stubborn friend) feel the need to adapt and start using it.
However, as a product manager, the most dangerous thing to do is to stop here. When your technology has peaked, it’s simply a sign that something new is about to come along. It’s best described using an S-curve:
By the time the curve hits a peak in performance, another technology has usually sailed up and provided competition. When it has scaled enough, the new technology’s performance rapidly increases until it replaces the pre-existing one.
An interesting example comes from the mobile phone industry and the size of the phones. Back when mobile phones were first made available to the general public, a small phone was a good phone. With the introduction of the smartphone, we are instead moving in the opposite direction. What happened?
Well, the biggest change was in how we use the phones themselves. Before the smartphone, they were used for making calls, sending texts and perhaps playing a round of Snake. These days our phones are our cameras, interactive gaming devices, internet browsers, music streamers, and of course, a way to pay.
What sparks a new technology?
A variety of things, of course. A common denominator across several industries is that when people behind technologies find areas in which their product can create positive change, adoption accelerates and the technology reaches more people.
Take Tanzania as an example, where the credit/debit card infrastructure never became dominant in the economy. When the need for non-cash payments became apparent, the banking industry didn’t have a promotable infrastructure. Mobile operators jumped at the opportunity. There was no reason to invest in national coverage with a card scheme since mobile phones were in most households already. Last year, around 1.5 billion transactions were made in Tanzania using mobile phone-based technology.
We are continuously exploring how merchants prefer to take payments in their daily operations. Today it might be through iframes on a website, tomorrow through digital wallets, and next year with wearable technology or browser payment ability. Each and every one of these are merely different ways of doing the same job: transferring money.
Regardless, we must keep our eyes on the prize – what do consumers want? From a focus on trustworthiness, Klarna became associated with the delivery of safe and secure payments. Now, we’re working hard at improving our speed and smoothness. Because at the end of the day, people want to handle their finances without hurdles and hassles, so they get to spend more time doing what they love.