Crossing the Chasm

I’ve been thinking about starting to reread through some of my library. I’m starting to find fewer and fewer books that I know I will be able to get enough utility out of to warrant me taking the time to read through them while taking notes then spending enough energy to write up a report. I have not been looking for extremely niche books; I direct my attention towards mostly books that have received high acclaim. For this reason, most of what I have read, including the text I am about to write about, has been very insightful. Some have been less so and the distinction is evident by my attitude present in my reports.

I try to actively recall material I have read past myself writing these reports. Since college, I have kept a door of sticky notes with questions and big ideas I have gotten from my readings. I hardly reread my reports, so this is the main way I get repeated exposure to the ideas I think to be useful. I do not fool myself into thinking that this makes me knowledgeable about any of the concepts, however. Perhaps, on this second go around, I will try to delve deeper into the minutia involved in the ideas I believe worth visiting. Take time to meditate on them.

Of course, there is still a significant backlog of books I plan to get through at some point. All the learning about education and brain development has made me curious about the field of general childcare. A student’s performance in the classroom is dependent on their home life. Pregnancy itself is a factor to consider. I know the current system of the way the world does things needs to be reformed but it’s irresponsible for me to claim that I know how to do that when I am ignorant of most of the picture right now.

I realize I am now four paragraphs into this report and haven’t even mentioned the book yet. My stalling may be because of how I read it. Before finishing the last chapter, I started reading through the entire Earth 1610 comic universe and didn’t return until two weeks later. This is what led me to believe that it may be worth rereading through my library since it was obvious how much of the information outside of the big ideas leaves my head so soon after reading. Ugh, it appears I have come full circle and have no choice but to write my report. Oh well… I guess, here it goes. Right now. This next paragraph. Get ready… Any sentence now! FINE!

Crossing The Chasm by Geoffrey Moore was recommended to me by Professor Loring during my last semester of college. I’m upset it took me this long to get around to it because it was an extremely good recommendation based on what he knew about the field I was entering. It was not exactly a sales book as I had expected but more of a marketing strategy guide that, as the author described, “…captured what had been … scattered institutions and rueful learnings and put [the concept] into a coherent set of frameworks that could be used for future decision making,” when it comes to the process of successfully introducing a disruptive technology to the market. It manages to be informative while funny with Moore’s sense of humor shining throughout.

The Disruptive Tech Adoption Life Cycle and Chasm

The adoption life cycle of disruptive technology is shown above. Typically, this cycle is shown as a continuous progression, but Moore identified a chasm that existed between the early adopters and the pragmatists.

The journey starts with the enthusiasts. These are the people that like to tinker with technology because of their passion for it. They’re the one’s companies give prototypes not meant to be looked at by a “normal person” that showcase the potential of a technology more than an actual use case.

Once a value is identified, the early adopters come in. These are the visionaries that can see the potential for disruptive technology that is still being developed. They want the first mover advantage of adopting this technology and expect an order of magnitude ROI from this investment. Oftentimes their dreams are unrealistic and won’t be completely satisfied. They communicate with the provider on what they need from the new product and help build up the offering.

The pragmatists seek incremental, measurable, and predictable progress. They are risk adverse and need to see proof that who they are dealing with is established in their industry. Because of the stark difference of expectations and personalities between the innovators and the pragmatists, companies can struggle to transition effectively to this group and die when they become unable to progress.

The late majority are the conservatives that wait until absolutely the last minute to adopt something. They expect lower costs because the R&D costs should have amortized by the time they use and only incremental updates to the technology.

Target the Point of Attack

Pragmatists need to see proof that a product works. The easiest way to show that is becoming a leader of a niche. When finding early adopters, companies can easily make the mistake of selling to the wrong people. Sell to too many types of companies and they will receive a variety of specialized requests that are not useful to anyone else. Targeting one niche that will allow for spreading into related fields is the best plan.

Picking a niche is unfortunately a low data decision and requires informed intuition rather than a reliance of data on a market that doesn’t yet exist. A segment can be found using Target Customer Characterization which is imagining an actual customer’s use case over and over until the customers being imagined all start to converge and resemble a target market.

Market Development Strategy Checklist

• Target Customer

• Compelling Reason to Buy

• Whole Product

• Partners and Allies

• Distribution

• Pricing

• Competition

• Positioning

• Next Target Customer

Assemble the Invasion Force

The whole product is the value extended beyond the generic product that becomes bigger as the product moves through the adoption life cycle. The way the iPhone works with a charger and has iMessage, the app store, safari, and iCloud, so will your product have an ecosystem around it that defines what a consumer is willing to pay. The consumer is paying for the expected product- minimum configuration to meet their needs.

Forming partnerships or at least giving a heads up to organizations that have the potential to add to your whole product is a crucial step. Console manufacturers give developers dev kits and lists of technical specs maybe even before a console is in production because they know that consumers don’t want to buy a console that doesn’t have games for it.

Define the Battle

When positioning a product, there should be a product alternative and market alternative. The product alternative is a similar technology to the offering while the market alternative is whatever the new product is replacing. This gives buyers a reference point for what the disruptive product is. The point of positioning is to make the product easier to buy, not easier to sell.

Moving through each stage of the adoption process requires changing positioning. This is shown through the competitive-positioning compass.

Whole product launches are different from product launches. Whole product launches come later to catch the attention of pragmatists. Instead of showcasing a new product, these launches showcase a new market.

Launch the Invasion

Once everything is planned out and it is time to start selling the product, a distribution channel needs to be picked. Sale types include direct sales, web-based self-service, Sales 2.0, traditional two-tier distribution, and value-added resellers. Sales 2.0 is the one I am most familiar with, with accounts being assigned to a delivery team to who ensures product satisfaction after a sale is made.

Pricing should convey market leadership while taking into consideration expectations for the customer, vendor, and distributor.

The last takeaway is expectations for revenue. A lot of people expect disruptive technology to have a sudden boom in revenue generation that resembles a hockey stick on a graph. That’s why investors allow companies to be cash flow negative for a starting period. This unrealistic expectation trips ups companies when revenue slows at the chasm. A more practical expectation is a staircase where revenue goes through a cycle of rapid increases followed by stagnation.

Crossing the Chasm was a solid read. Although it wasn’t as entertaining as the love triangle between Peter, Mary Jane, and Gwen, it had its moments. The text showed its age in some places by mentioning defunct products like MOOCs and Google Glass. It also alluded to the current reality of 3D Printing and VR where the industries are still seemingly unable to cross into the early majority market segment and that they may never have the value to move further. Back to see what The Maker is planning.