Innovation Diffusion Litmus Test Version 2.0 Available - Now with Multiple Diffusion Phase Forecasts

Dear all - Version 2 of the Innovation Diffusion Litmus Test (see also https://open-european-innovation-network.blogspot.com/2020/04/the-innovation-diffusion-litmus-test.html) is now available and breaks down the forecast overall diffusion of innovation curve into the various market phases / adopter categories as shown in the image on the left.

The tool design sets the basis for playful experimentation with the Litmus Test answers and a number of variables based on the following starting mathematical model - early days yet, but already "good enough" for 99% of the needs of entrepreneurs, intrapreneurs and all venturists! Version 2 of the Innovation Diffusion Litmus Test can be downloaded here (https://sourceforge.net/projects/entov-hvm/files/ENTOV-HVM/)).

Key new functionalities are:
  1. A Pareto chart of the individual Litmus Test answers in order to identify where to focus in order to improve scoring.
  2. Connection of the Litmus Test answers with a diffusion model phased across the various diffusion adopter categories.
  3. An updated total diffusion forecast based on the diffusion across the various diffusion adopter categories.

Version 3 is planned for late summer 2020 and is planned to include a proper user guide plus an eased approach to "gaming" the model.

Some elements of the mathematical model:

1. Tab "Litmus Test Context Questions"
  • Market Size. The relevant question is "In your opinion, how many adopters are in the market? Note that the number you enter on the right will define the market size (m) for the forecast (see tab "Diffusion Forecast"). If in doubt - enter "1000"". This setting is the basis for then determining the size of the various adopter groups where diffusion progress is forecast for (Default Settings: Innovators 2%, Early Adopters 14%, Early Majority 34%, Late Majority  34%, Laggards 16%).
  • Time Periods. The relevant question is "In how many time periods are you expected to achieve market saturation (84%)?" While this variable is not integrated inot the overall forecasting model yet, it needs special attention in order to interpret the forecast results. The time periods for high value manufacturing contexts are recommended to be months, and the maximum time period to market saturation is recommended to be 9 months. The model per se uses 84% market ownership as "saturation" since this encompasses all adopter groups from innovators to the late majority - this variable can however be adjusted in a later tab for experimentation.

2. Tab "Litmus Test Questions"
  • Idea for Diffusion. The averages for all answers to the questions "Is your idea ready to diffuse rapidly to late adopters?" and "How confident are you in your above assessment of the idea?" are multiplied and divided by the maximum possible answers.
  • Roles and Participants. The averages for all answers to the roles and participants questions are multiplied and divided by the maximum possible answers.
  • Maturity Level. The score for "Idea for Diffusion" and "Roles and Participants" are multiplied.

3. Tab "Diffusion Forecast - Detail"
  • This tab contains the main variables for forecasting the diffusion of innovation across the market segments. Blue shaded cells can be manipulated by the user. Amber shaded cells for p (Idea Maturity * People Maturity) and q (People Maturity) values have been transferred from other tabs.
  • The diffusion formular used is the Bass Diffusion Model and calculated as "=((Overall Co-Efficient of Innovation (p) + ((Overall Co-Efficient of Imitation (q)/ Total Market Size (m))*Cumulative Number of Adopters))*( Total Market Size (m) - Cumulative Number of Adopters)".
  • The tab is designed to enable comparative forecasting of multiple ideas in a later version. Currently only one idea is captured with the p and q values transferred from the tab "Litmus Test Questions" and then subject to a weighting process which results in the p and q values used on the forecasting process.

P.S. If you are interested in learning more please visit us at www.innovation-web.eu, our LinkedIn Group at https://www.linkedin.com/groups/8779542/, our blog at https://www.innovation-web.eu/entov-hvm-blog, our Researchgate project page at https://www.researchgate.net/project/Open-European-Network-for-Enterprise-Innovation-in-High-Value-Manufacturing-ENTOV-HVM, our Sourceforge page at https://sourceforge.net/projects/entov-hvm/ and our Facebook page at https://www.facebook.com/groups/2014779865300180/. You can also follow us via Twitter: @owschwabe (#innovationweb) and the LinkedIn Group page https://www.linkedin.com/company/entov.

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