How and why each stakeholder in the given enterprise “must come to a common accord if the chasm can be safely negotiated”
As Geoffrey Moore explains, in the first two editions of this business “classic” and once again in this new one, his purpose is to answer “in considerable detail” two questions: Why can’t the same skills applied so effectively in other areas also be applied when marketing high technology? And what is it going to take to get it right?
The “chasm” to which Moore refers is a metaphor for this phenomenon: “the rapid acceleration in market development followed by a dramatic lull, occurring whenever a discontinuous innovation is introduced – [one that] drives all emerging high-tech enterprises to a point of crisis where they must leave the relative safety of their established early market and go out in search of a new home in the mainstream. These forces are inexorable – they will drive the company. The key question is whether management can become aware of the changes in time to leverage the opportunities such awareness confers.”
In other words, “The chasm is a drastic lull in market development that occurs after the visionary market is saturated and pragmatists will not buy into a discontinuous technology unless they can reference other pragmatists, thus the catch-22. Pragmatists dependent exclusively on references from others in their own industry and are highly support-oriented.”
Many business plans are based on a traditional Technology Adoption Life Cycle, a smooth bell curve of high tech customers, progressing from Innovators, Early Adopters, Early Majority, Late Majority, and finally Laggards. In turn, this model becomes the foundation for a high-tech marketing model which says the way to develop a market is to work the curve from left to right, progressively winning each group of users, using each “captured” group as a reference for the next. Moore demonstrates that in fact, there are cracks in the curve, between each phase of the cycle, representing a disassociation between any two groups; that is, “the difficulty any group will have in accepting a new product if it is presented the same way as it was to the group to its immediate left.” The largest crack, so large it can be considered a chasm, is between the Early Adopters and the Early Majority. Many (most) high tech ventures fail trying to make it across this chasm.
The core insights in the two previous editions remain but Moore updates the companies that serve as exemplars, for better or worse. The successful chasm negotiators include Aruba, Documentum, Infusion, Lithium, Mozilla, Salesforce.com, VMware, and Word Day. They are juxtaposed with companies that include Better Place, Motorola Iridium, Segway, Solyndra, and Webvan. One of the most valuable lessons to be learned from these companies is expressed in the form of an analogy: “Trying to cross the chasm without taking a niche market approach is like trying to light a fire without kindling.”
These are among the dozens of business subjects and issues of special interest and value to me, also listed to indicate the scope of Moore’s coverage.
o The Technology Adoption Life Cycle (Pages 11-17)
o Discovering the Chasm (25-26)
o First Principles (34-37)
o The Dynamics of Early Markets (48-53)
o The Dynamics of Mainstream Markets (63-67)
o The Perils of the Chasm, and, Fighting Your Way into the Mainstream (75-80)
o Successful Chasm Crossings (89-91)
o The Simplified Whole Product Model (137-150)
o Partners and Allies (150-152)
o The Competitive Positioning Compass (167-171)
o The Positioning Process, and, Passing the Elevator Test (183-188)
o Customer-Oriented Distribution (198-206)
o Financial Decisions: Breaking the Hockey Stick (216-220)
o Organizational Decisions (225-228)
o The Whole Product Manager (231-234)
Thoughtfully, Moore provides a “recap” section at the conclusion of Chapters 4-7. he also adds two appendices to the third edition. In my opinion, all by themselves, they are worth far more than the cost of the book. In Appendix 1, he provides an overview of the process by which markets develop end-to-end, from the Early Market across the Chasm through the Bowling Alley into the Tornado and on to Main Street. “The challenge is to get your company aligned on the right approach by reaching consensus about current market state.”
In Appendix 2, “The Four Gears for Digital Consumer Adoption,” he explains why online adoption is best characterized in terns of these activities: acquisition of traffic, engagement if users, monetizing their engagement, and enlisting “the faithful.” He adds, and I agree, “Tipping points are as key to consumer adoption as they are to B2B. Prior to reaching one, all efforts to scale require pumping in additional fuel — if you cut off the fuel supply, the system will revert to its original state. But after you pass the tipping point, the system restabilizes around a new status quo, and actually pulls you forward to get you to your new ‘right’ position. You can still screw this up (just ask the investors at Myspace and Groupon), but it takes some real effort to do so.”
Congratulations to Moore on his trilogy of business classics (i.e. Crossing the Chasm, Inside the Tornado, and Living on the Fault Line). Albert Einstein once explained that he always asked the same questions on his final examinations at Princeton because “every year the answers are different,” Geoffrey Moore continues to revise and update his thinking and his work because, although chasms, tornados, and fault lines remain, the strategies and tactics needed to negotiate them must be continuously evaluated and, when necessary, modified or replaced.