How To Cross The Tech Chasm
If your business is in any way related to technology, you most likely know the name Geoffrey Moore. His classic marketing book, Crossing the Chasm: Marketing and Selling Products to Mainstream Customers, has sold more than 1 million copies since it was first published nearly 25 years ago.
Moore’s book has long been the bible for entrepreneurs and high-tech executives hoping to sell cutting-edge products to progressively larger markets. Required reading in entrepreneurship courses at business schools nationwide—from Stanford and Berkeley to Harvard and MIT—Crossing the Chasm is probably best known for introducing the “technology adoption life cycle.”
To keep things current, Moore recently released a revised third edition of his book with new company examples from the likes of Salesforce, Workday, Box, VMware, Lithium, Aruba and Rackspace that illustrate the technology adoption life cycle in all new ways, reflecting today’s increasingly innovative use of mobile devices, cloud computing and the Web.
“The chasm” has become a part of the vernacular of high-tech marketing at behemoths like Microsoft, HP, SAP and Cisco, as well as in startups and incubators from SoMa to SoHo, because the power of its frameworks helps organizations predict outcomes in high-risk situations that have no direct precedent. These frameworks underpin the way high-tech companies around the world plan and fund their investments in disruptive technological innovations.
Moore took time out of his hectic schedule to answer a few questions regarding the chasm, the four gears and more in the latest edition of his bestseller.
For the uninitiated, can you explain the technology adoption life cycle you introduced in Crossing the Chasm?
The technology adoption life cycle is a framework based on analyzing when and under what circumstances people embrace a disruptive innovation. The model is based on a bell curve, and there are five adoption behaviors that unfold in sequence from left to right.
The innovators or technology enthusiasts embrace things immediately because they’re attracted to disruptive innovation per se—they want to try it out and see how it works. Think Steve Wozniak.
The early adopters or visionaries come next, looking to leapfrog their competition by being the first to leverage the new power. They’re willing to take extra risks to get a major advantage. [That would be someone like] Jeff Bezos or Steve Jobs.
The third group are the pragmatists, or early majority. They’re very interested in the productivity improvements being promised but want to wait until the innovation is sufficiently mature so that it will work reliably without a lot of handholding. They look to each other to get the signal of when it’s safe to jump on the bandwagon.
Then there are the conservatives, or late majority, who don’t like disruption at all and really need to see it thoroughly domesticated—and significantly cost reduced—before they’ll consider it.
And finally, there are the laggards or skeptics who simply want to have as little to do with disruptive innovations as possible.
And the “chasm”?
The chasm is a gap in the unfolding of this life cycle between the visionaries, who want to go early, and the pragmatists, who want to wait and see. High-tech vendors often mistake the early signals of success from visionaries as evidence that the market’s taking off, when, in fact, it’s just the early market that’s taken off. The mainstream market still lies ahead, and between it and them lurks the chasm. Crossing the chasm in this context becomes a critical “coming of age” accomplishment.
Tou’ve got a new twist on the model now that you call the “four gears,” which you write “is a better fit.” Can you briefly describe this new model?
The chasm model is a great fit for B2B businesses, where the risk and cost of adoption trials is high and the decision process is socialized across multiple managers and executives. In a consumer market, and in digital services in particular, the risk of adoption is low, the cost is often free, and the decision process can come down simply as to click or not to click. In that model, there really are no chasms. Instead the challenge is to “spin up a tornado” (Full disclosure: The title of my second book was Inside the Tornado).
The four gears are the four activities that need to mutually reinforce each other to create this outcome. They are: 1) acquire traffic to your app or site, 2) engage users so they participate and come back, 3) enlist super fans to evangelize your offer, helping it go viral, and 4) monetize the participation, leveraging a variety of direct or indirect means.
The key idea for entrepreneurs here is that, at any given time, one of these gears is rotating more slowly than the other three, and the immediate priority is to speed it up so it’s no longer the slowest gear. The ultimate priority is to get them all spinning in tandem, mutually reinforcing each other’s effects, like some big Angry—or Floppy—Bird.
Who’s doing the best job of crossing the chasm today?
The real action today is in B2B2C markets, where tech companies are helping non-tech companies use digital systems to better engage with their customers. All the software-as-a-service vendors fall into this space, beginning with Salesforce and Workday, moving on to newer companies like Box, Lithium and Infusionsoft. In this case, you use the chasm for the B2B part and the four gears for the B2C part.
“Big data” is the buzzword du jour. Where does it stand on the technology adoption life cycle?
Big data is a code word for “machine learning.” It’s highly disruptive, [as when] Deep Blue beat Garry Kasparov at chess or Watson cleaned up on Jeopardy. In the world of digital, the number of signals within a given unit of time escalates dramatically, well beyond anything a human being can process.
But computers can sort through this noisy stuff to find underlying patterns—that’s what data scientists do—and these patterns can be extremely valuable in better forecasting future outcomes, be they consumer behaviors, stock price movement, or mean time to failure for aircraft parts. We call these underlying patterns “graphs,” and you’ll be hearing more about the “social graph” of interest groups or the “graph of things” in the Internet of things.
What’s the single best piece of advice you have for entrepreneurs and small-business owners in the technology space?
For the rest of this decade, and arguably much of the next, B2B2C-type markets will be very strong. The world of enterprise computing—in business, in government, in health care, in education—is looking to integrate the mobile/social systems of engagement that we use in our consumer lives with the legacy of systems of record that run the back-end of every large institution.
In the short term, there’s enormous opportunity just to make old methods more productive, but there’s an even bigger opportunity in the long term to invent wholly new methods for anything and everything. And you can get into the game with very little startup capital if you know what you’re doing around tech. It’s hard to imagine a better time to be an entrepreneur.
Originally published on OPEN Forum.