DEFINITION of 'Early Adopter'

An individual or business who uses a new product or technology before others. An early adopter is likely to pay more for the product than later adopters, but accepts this premium if using the product improves efficiency, reduces cost, increases market penetration or simply 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.

BREAKING DOWN 'Early Adopter'

The rate of diffusion, or adoption, 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.

RELATED TERMS
  1. Early Majority

    The first sizable segment of a population to adopt an innovative ...
  2. Late Majority

    The last sizable segment of a population to adopt an innovative ...
  3. Adopter Categories

    Classification of individuals based on their willingness to try ...
  4. Qualified Adoption Expenses - QAE

    The necessary costs paid to adopt a child younger than 18 years ...
  5. Rate Of Adoption

    The number of members of a society who start using a new technology ...
  6. Adoption Credit

    A federal tax credit that may be claimed by federal taxpayers ...
Related Articles
  1. Financial Advisor

    Adoption: How to Plan Financially for One

    Here are some tips to address the financial implications of adopting a child.
  2. Financial Advisor

    How to Create a New Financial Product in 10 Steps

    The 10 steps outlined here are essential to the creation of a new financial product.
  3. Investing

    Understanding Marginal Cost of Production

    Marginal cost of production is an economics term that refers to the change in production costs resulting from producing one more unit.
  4. Financial Advisor

    What's Behind the Decline in Productivity Numbers? 

    There are several theories and hypotheses about low productivity numbers in the American economy. This article examines some of them.
  5. Small Business

    How Penetration Pricing Works

    Penetration pricing unveils a new product or service at an initially low price to attract customers away from competitors.
  6. Small Business

    The 3 Most Common Demand Mistakes Entrepreneurs Make

    One of the hardest parts of creating a new product is figuring out if people are actually going to want it.
  7. Investing

    These Financial Products Are Too Complex For The Average Joe

    Structured financial products are so elaborate that investors are unable to assess costs and risk.
  8. Investing

    Understanding Production Efficiency

    Production efficiency is the point at which an economy cannot increase output of a good or service without lowering the production of another product.
  9. Small Business

    Understanding the Product Life Cycle

    Product life cycle is the period of time during which a product is conceived and developed, brought to market and eventually removed from the market.
  10. Small Business

    Understanding Marketing

    Marketing includes all of the activities of a company associated with buying and selling a product or service.
RELATED FAQS
  1. Do production costs include the marginal cost of production?

    Learn more about marginal costs of production and production costs. Find out how businesses can use marginal cost calculations ... Read Answer >>
  2. Is there any way to reverse the law of diminishing marginal returns?

    Learn more about how consumer spending, supply and demand impact production decisions. Find out more about the law of diminishing ... Read Answer >>
  3. What are some ways a company can expand its product line?

    Understand what a product line is and why it's important. Learn about specific ways in which a company can expand its product ... Read Answer >>
  4. What is the difference between research and development and product development?

    Understand the difference between research and development and product development. Learn why a company would want to invest ... Read Answer >>
  5. How is the marginal cost of production used to find an optimum production level?

    Understand more about production cost calculations, and specifically how the marginal cost of production is used to determine ... Read Answer >>
Hot Definitions
  1. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  2. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  3. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  4. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  5. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  6. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
Trading Center