The Adjacent Users are aware of a product and possibly tried using the it, but are not able to successfully become an engaged user. This is typically because the current product positioning or experience has too many barriers to adoption for them.
While Instagram had product-market fit for 400+ million people, we discovered new groups of users who didn’t quite understand Instagram and how it fit into their lives.
There's so much assumption there. "not able to successfully become an engaged user"; "too many barriers to adoption"; "didn't quite understand [...] how it fit into their lives". No question about whether potential users are interested in the product in the first place? It's so life-changing that if someone decides not to use the thing, it's because they failed at becoming engaged, or just don't understand that it's life-changing?
I'm confused. Maybe this is the level of delusions of grandeur you need to succeed at that scale with that kind of product, and I'm just hopelessly naive :(