I chose “Crossing the Chasm” by Geoffrey A. Moore because it lays out some of the fundamental marketing problems I have and will encounter as a high tech marketer. It provides the context that I need to determine how to use the rest of the knowledge I’m about to absorb. Now let’s get to it:
Chapter 1 – High Tech Marketing Illusion
This is how the traditional high-tech marketing model progresses, theoretically:
The technology adoption life cycle for disruptive (discontinuous) technologies
It’s a continuous curve, and a company should move pretty smoothly from segment to segment.
Here’s a quick rundown about the people who make up each segment:
Innovators – They care about the tech, the elegance or creativity of a technology at solving the problem.
Early adopters – They care less about the actual tech and more about what it can do for them. Looking for a quantum leap forward.
The early majority - They are pragmatic. They’ll go with new(ish) tech, but only to keep up. They want tested, stable tech.
The late majority – They’ll change when they have to. Generally uncomfortable with most technology, they want easy-to-use, mature, widely adopted tech.
Laggards – They hate you, your technology, and the kids that get on their lawn. They not only hate your tech, they’ll try to convince others to stay away as well.
Here’s how the model actually unfolds:
It’s not a continuous curve, there are gaps between each segment where a company can fall. You fall by not successfully moving from one segment to the next (e.g. getting stuck with the early adopter crowd but nobody in the early majority adopts). Most gaps are thin, but the chasm is huge, which brings us to…
Chapter 2 – High Tech Marketing Enlightenment
For discussion’s sake, a high tech market is defined as
- 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.
My note: The last point gets emphasized by Moore, and at the time of writing, gaps like geography and discipline, were critical. As he puts it, a doctor in Zaire isn’t in the same market as a doctor in Boston. However, with the expansion of the Internet, those markets really are becoming global, because communication is a lot easier. It’s now a lot easier for the doctor in Zaire to read a review or get some feedback from the doctor in Boston than it used to be. So basically, your markets can be a lot bigger, even by Moore’s definition. However, I think that geography in particular is still useful in segmenting your markets.
Early Markets – Innovators and early adopters. Innovators find and explore new tech, early adopters check with innovators to find new technological solutions for problems.
Early Market Problems
- Problem 1: Crappy segmentation and positioning – you bit off more than you can chew. To fix it? Go find a pond where you can be the biggest fish. Once you dominate that pond, go “pond-hopping” until you capture the market.
My note: this has the feel of solid advice for any entrepreneur.
- Problem 2: Vaporware – You promised that big-time C-level exec some crazy stuff and now you have to make it. As you try to produce, you find out that you overpromised and you can’t deliver. Now, everybody’s unhappy, and you’re dead in the water. There’s only one thing for it: try to find something useful in all the crap you just built and sell it to someone that likes it. Welcome to a much smaller pond.
My note: This reminds me of the product validation tour story they told me when I started at Instructure. Basically, the founders went on a road trip and just dropped in on administrators at a dozen or so colleges and universities. However, rather than selling them a product that didn’t exist, they asked them what the ideal product would look like if they could build it. After taking copious notes, the founders came back, sat down, and figured out what they could actually build given their resources. However, they hadn’t promised anything, so there was nobody to upset or let down, and the founders were the only stakeholders (fewer cooks in the kitchen). This allowed them to build a product that the market wanted, without having to kowtow to particular early adopters to develop their product. If I ever launch a tech product, this is how I’m going to do it.
- Problem 3: Marketing fails to define benefits – This time they don’t figure out how to get past the “this technology is so geeky/cool/revolutionary” message for innovators to the “this is how our tech can save you money/increase your sales” message for early adopters.
My note: Let’s face it, if you can’t talk ROI with a potential client, you’re probably not going to be financially successful. There’s not a huge mainstream market for technology for technology’s sake.
Mainstream Markets – Early majority and late majority. These guys make up the vast bulk of any market. The early majority is the leader who adopts technology; the late majority tends to follow along behind.
Mainstream Market Problems
- Problem 1: Stop improving your current product to fund new product development elsewhere – This has been the death of a lot of companies who were once mainstream market leaders.
My note: This reminds me of a few companies: Novell, Blackboard, Inc., and one other that I’m pretty familiar with.
- Problem 2: Shoot yourself in the flagship product – You updated your product and guess what? It blows and now nobody wants it. Some companies get smart and fix it. Some don’t and allow small startup companies to come in and start taking away marketshare.
A Note About Laggards
So at first blush, my thought was that you should just ignore these guys. After all, I believe in not feeding the trolls or wasting time with people who are determined to hate me. There are just too many other willing buyers and advocates. However, Moore made me think twice. He mentioned that while they’re not a great market to sell to, they’re a bit like the “canary in the coal mine.” They’ll be the very first to point out where your marketing and sales pitches don’t match up with the actual product. Pay attention and it’ll keep you honest and show you where to improve your product.
THE CHASM
And here we are at the point of all this (finally). The reason why there’s a chasm and not just a gap between early adopters and the early majority is because the early majority is scared and they need references from people like themselves to make a buying decision. This creates a “catch-22″ where a company can’t get into the early majority segment unless it has references from the early majority and it can’t get references from the early majority unless it gets into the early majority segment. This is a problem. And why won’t the early majority refer to the early adopters for buying decisions? Turns out the early majority hates early adopters because:
- Early adopters don’t respect their colleagues’ experiences – After all, this is what makes them innovative. Everyone else has been doing it wrong and they can see a waaaaaay better way.
- Early adopters love technology more than they love their industry – They’d much rather be on Engadget than reading an industry blog. This makes them look unfocused and flighty to the pragmatists of the early majority.
- Early adopters don’t account for existing infrastructure – They’d rather just build new, from the ground up. This is infuriating to the early majority, who worry about interoptability and care about best practices.
- Early adopters are disruptive – Moore puts it best: “From a pragmatist’s point of view, visionaries are the people who come in and soak up all the budget for their pet projects. If the project is a success, they take all the credit, while the pragmatists get stuck trying to maintain a system that is so “state-of-the-art” no one is quite sure how to keep it working. If the project fails, visionaries always seem to be a step ahead of the disaster, getting out of town while they can, and leaving the pragmatists to clean up the mess.”
Next post >> Crossing the Chasm: Part 2 (or how to actually cross the chasm)
