Crossing the Chasm
- Book Title: Crossing the Chasm - Marketing and Selling Disruptive products to Mainstream customers
- Author: Geoffrey Moore
- Year written/published: 1991
- Some extracts:
Technology Adoption Cycle:
What is dazzling about this concept, particularly to those who own equity in a high-tech venture, is its promise of virtual monopoly over a major new market development. If you can get there first “catch the curve”. and ride it up through the early majority segment, thereby establishing the de facto standard, you can get rich very quickly and “own” a highly profitable market for a very long time to come.
From base of visionaries to early adopters…
When promoters of high tech products try to make the transition from a market base made up to visionary early adopters to penetrate the next adoption segment, the pragmatist early majority, they are effectively operating without a reference base and without a support base within a market that is highly reference oriented and highly support oriented… The company failed because its managers were unable to recognize that there is something fundamentally different between sale to an early adopter and a sale to the early majority, even when the company name on the check reads the same.
Market for high tech products…
- A set of actual or potential customers
- for a given set of products or services
- who have a common set of needs or wants and
- who reference each other when making a buying decision
- Innovators: The technology enthusiasts
- Early Adopters: The visionaries
- Early Majority: Pragmatists
- Late Majority: Conservatives
How to reach the technologists:
Technology enthusiasts are easy to do business with provided you (1) have the latest and greatest technology and (2) don’t need to make much money…. What they do represent instead is a beachhead, a source of initial product or service references, and a test bed for introducing modifications to the product or service until it is thoroughly “debugged”.
How to reach the visionaries…
As a class, visionaries tend to be recent entrants to the executive ranks, highly motivated and driven by a “dream”. The core of the dream is a business goal, not a technology goal, and it involves taking quantum leap forward in how business is conducted in their industry or by the customers.
How to reach the pragmatists…
When pragmatists buy, they care about the company they are buying from, the quality of the product they are buying, the infrastructure of supporting products and system interfaces, and the reliability of the service they are going to get. In other words, they are planning on living with this decision personally for a long time to come.
4 fundamental characteristics of visionaries that alienate pragmatists:
- Lack of respect for the value of colleagues’ experience - it is their ability to see things first that they want to leverage into a competitive advantage
- Taking a greater interest in technology than in their industry
- Failing to recognize the importance of existing product infrastructure - Visionaries are building systems form the ground up. They are incarnating their vision.
- Overall disruptiveness - Visionaries successful or not, don’t plan to stock around long. They see themselves on a fast track that has them leapfrogging up the corporate ladder and across corporations.
When markets go mass, platforms have the advantage. Because they can participate openly in many value chains at the same time, they can be taken up in multiple segments simultaneously.
You need to understand that informed intuition rather than analytical reason is the most trustworthy decision making tool.
A day in the life (before)
- Scene or situation: Focus on the moment of frustration. What is going on? What is the user about to attempt?
- Desired outcome: What is the user trying to accomplish? Why is this important?
- Attempted Approach: Without the new product, how does the user go about the task?
- Interfering factors: What goes wrong? How and why does it go wrong?
- Economic consequences: So what? How and why does it go wrong?
A day in life (After)
- New Approach: With this new product how does the end user go about the task?
- Enabling Factors: What is it about the new approach that allows the user to get unstuck and be productive?
Whole product model:
- Generic product: This is what is shipped in the box and what is covered by the purchasing contract.
- Expected product: This is the product that the customer thought she was buying when she bought the generic product. It is the minimum configuration of products and service necessary to have any chance of achieving the buying objective.
- Augmented product: This is the product fleshed out to provide the maximum chance of achieving the buying objective.
- Potential product: This represents the product’s room for growth as more and more ancillary products come on the market and as customer-specific enhancements to the system are made.
Simplified Whole Product Model:
- Standards and procedures
- Training and Support
- Installation and Debugging
- System Integration
- Additional Hardware
- Additional Software
Competitive positioning compass
- Fastest Product
- Easiest to use
- Elegant architecture
- Product price
- Unique functionality
- Largest installed base
- Most 3rd party supporters
- De facto standard
- Cost of ownership
- Quality of Support
Crossing the chasm…
Crossing the chasm required moving from an environment of support among the visionaries back into one of skepticism among the pragmatists. It means moving form the familiar ground of product-oriented issues to the unfamiliar ground of market oriented ones, and from familiar audience of like minded specialists to the unfamiliar audience of essentially uninterested generalists.
- Positioning, first and foremost, is a noun, not a verb
- Positioning is the single largest influence on the buying decision
- Positioning exists in people’s heads, not in your words
- People are highly conservative about entertaining changes in positioning
4 primary psychological types:
- Name it, frame it - for technology enthusiast
- Who for and what for - for the visionary
- Competition and differentiation - for pragmatist
- Financials and future - for Conservatives
- Feedback and adjustment
Passing the Elevator test MISTAKES:
- Whatever your claim is, it cannot be transmitted by word of mouth
- Your marketing communication will be all over the map
- Your R&D will be all over the map
- You won’t be able to recruit partners and allies
- You are not likely to get financing form anybody with experience
Fill in the blanks:
- For (Target customers)
- Who are dissatisfied with (the current market alternative)
- Our product is a (new product category)
- That provides (key problem solving capability)
- Unlike (product alternative)
- We have assembled (key whole product features for your specific application)