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But is it fun?!

But is it fun?!

| April 23, 2024

I was ruminating on Everett Rogers and his theories on "Diffusion of Innovation" while thinking about the new iPhone I need to purchase. You have heard Rogers and his ideas. New products are first adopted by Innovators. Early Adopters follow hard on their heels. The Early Majority is the next group to adopt a product followed by the Late Majority. Trailing at the back (and in my situation, still clinging to a rotary-dial phone) is a group Rogers identifies as "Laggards".

Each segment has unique defining characteristics and each segment then needs a crafted message and appeal. One size does not fit all. And yet, in the case of the iPhone, what made it so successful (ie, adoptable)? Part of it was the ease of use of the product. Brand recognition certainly helped as Apple has a reputation for innovation and reliability. A large App Store helped. And the phone is aesthetically pleasing to the eye. Beyond all that, the phone is FUN.

I have not found any research on how much "fun" helps a product's adoption but it certainly is beneficial. I say this because as I reflect on Retirement Income in 401(k) and the solutions tied to this, the adoption path might not quite resemble that of the iPhone!

These thoughts came to me during the recent NAPA 401k conference. Retirement Income solutions may not be right for each 401k. Contrast this with the ubiquity of smart phones. The solutions may not be easy to understand. iPhones certainly are easy to use. Just look at the number of kids glued to their screens! And while Retirement Income solutions might be able to make employees' lives easier in retirement, there is going to be a lot of communication needed to get plan sponsors on board with this.

Working in Retirement Income's favor is that as more plan sponsors become familiar with these solutions and as they change jobs, they might ask about these solutions in their new 401k plans. This type of diffusion though will be slow as most folks joining a new company aren't looking to rock the boat right out of the gate.

Engrained perceptions on annuities and pensions also might require more communication and explanation before adoption can happen. Annuities and pensions seem to have attracted their own share of fans and detractors even if the fans and detractors have never used either one! Be prepared for a long communication journey.

And finally, Retirement Income solutions have some quirks that need to be worked out. Just how portable are these types of solutions as employees change jobs/ consolidate retirement plans? Can these solutions work in an IRA? A Roth IRA? And how do these solutions clearly lay out the fees inherent to these products? Fees need to be clear and easily understood in order for there to be even a chance of wider adoption.

For now, I will consider the iPhone 15, the Pro, and the Pro Max models. I wonder what color I should get?