That's when the markets mature.
That's when it's a large market, can be very profitable.
Now the thing about these s-curves is that they tend to follow one another.
We're thinking about new technologies.
So you'll get an old technology, say sailing ships, and
then a new one will develop.
Steam powered ships.
Initially, performance of steam powered ships is relatively low, but
over time, they come to dominate the marketplace.
So let's dig a little deeper into understanding
how a new technology develops.
Initially, there's a couple things going on.
One thing is, there's a lot of competition.
Over what the design of this technology's going to be, and
think back to those aircraft.
It wasn't clear what an aircraft was going to look like.
Whereas right now, you're pretty clear when you say an airplane,
what you're thinking about.
Even the Wright brothers, their plane didn't have what we call now ailerons,
which control how the plane banks, all right?
They used something called wing warping.
Their propeller was behind the pilot and pushed the air, instead of most of what
you see in modern propeller aircraft would be ones that pull.
So the Wright brothers didn't have all the key elements of the standard design,
what's called the dominant design.
Over time what happens is that a dominant design emerges,
which defines the overall architecture.
And that's an important point because before then,
you have a lot of experimentation, a lot of innovation,
rapid change in what the technology looks like.
There's a lot of uncertainty about whether it's going to work,
whether it's going to take off.
Even whether it's going to substitute out
the old technology like sailing ships, right?
Sailing ships put up a very determined fight.
And some of the most beautiful and most capable sailing ships ever,
the clipper ships, evolved as sailing ship
designers competed against the oncoming steam technology.
Which was initially unreliable and slow, and couldn't go particularly far.
So if we go ahead and think about the message there, right?
We've got this message that young markets are uncertain and they're dynamic.
And the uncertainty raises questions like, is the technology going to work?
When will the market take off?
Let's take a couple of examples.
You think back to kind of the prototypical example,
something where it looks almost like the S curve.
You'd be thinking about something like transistors as they replaced vacuum tubes.
Look at that diagram, right?
A very smooth curve increasing every year.
Now there is some question as to when this is really going to supplant vacuum
tubes, right?
So there is a lot of uncertainty, this is a tough market.
What about though, ballpoint pens, right?
Certainly, they're ubiquitous now.
What happened when they were introduced?
Well, here's what the diagram looks like.