Rock Creek Pharmaceuticals Inc. (fka RCPIQ)

[vladimirr]

New products and early adopters.

By new product I mean a radically new product, something that never has been before. Not a new brand of something that is already established in the market. When a new product comes to market the company will have limited production and distribution. They have spent for R&D and to get the initial production and they have the expenses of increasing production, distribution and marketing. Until they have established their market and scaled their production their cost of production will be high. This is where the early adopters comes in. For any product there is a group of people that will find it so beneficial that they will pay whatever the cost to get it.

Lets take the cell phone for example. Thirty years ago a cell phone looked and weighed like a brick. Service cost $1000 a month and only high income people with time sensitive businesses like doctors and executives thought they were worth it. They were the early adopters and helped pay for the R&D and expansion. When the size and cost dropped the second wave of early adopters, like cab drivers and salesmen bought in because it would increase their profits. The next drop in price will bring in the people that can afford it just for their convenience. This goes on until the phones and service are so cheap that almost everyone has one and they are considered a necessity.

This is the cycle for all radically new products.

GLTA
Vlad
GO STSI