Launching a high-tech product can be extremely challenging, and failure comes with the loss of significant time and resources. In particular, companies are especially vulnerable when they’re trying to cross the chasm between a small minority of early customers and the large majority of mainstream customers. In this book, Geoffrey Moore shares proven frameworks and strategies to successfully bring new, cutting-edge products to market, with decision-making guidelines for investors, engineers, marketers and managers in the high-tech community. In this Crossing the Chasm summary, we’ll briefly explain the chasm and the challenges it presents, before outlining how you can successfully cross it to achieve growth and profits. For the full details, examples and tips, do get a copy of the book, or get a detailed overview with our complete book summary bundle.
Understanding the Chasm
Adoption and Marketing of High-Tech Products
The Technology Adoption Life Cycle
The Technology Adoption Life Cycle explains how new products are accepted. Generally, technology adoption follows a bell curve, with 5 distinct consumer groups differentiated by their psychographic profiles and attitudes to new technology:
• Innovators (tech enthusiasts) are passionate about new technology. They actively pursue and explore the latest technology to learn about them. They’re a small minority, but their endorsement provides technological credibility.
• Early adopters (visionaries) embrace new technologies as a means to achieve a broader vision and are good at explaining the potential benefits to others. John F. Kennedy championed the launch of the U.S. space program, while Henry Ford championed the mass-production of automobiles.
• The early majority (pragmatists) are more cautious and realistic. They’re only willing to adopt technology that’s proven and convenient.
• The late majority (conservatives) are uncomfortable with new technology. They’ll adopt it only when most people are already using it, just so they won’t get left behind.
• Laggards (skeptics) don’t want to be associated with new technology at all and may only use it only unknowingly.
The High-Tech Marketing Model
The High-Tech Marketing Model is about developing the market by sequentially addressing the 5 groups above from left to right. It has been widely applied by many companies from Microsoft to Cisco, Dell, Google, HP and Oracle.
This model works because each group paves the way for the next group, e.g. innovators’ endorsement helps to win over the early adopters, who then pave the way for the early majority and late majority. However, each of the 5 groups have different buying objective and expectations, so what appeals to 1 group can alienate another. Such gaps between the groups can break your marketing momentum. In particular, there’s a chasm between visionaries and pragmatists due to their conflicting goals. Visionaries want major changes to leapfrog their competitors, whereas pragmatists want to improve existing operations with minimal disruption.
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Marketing to Early vs Mainstream Markets
The presence of the gaps and chasm means that you need to tailor your marketing approach to each of these customer groups. In our complete Crossing the Chasm summary (click here for full 16-page summary), we explain this in detail, including:
• What it truly means to define your target segments;
• A breakdown of the profile, needs/wants, and marketing insights foe each of the 5 groups above (tech enthusiasts, visionaries, pragmatists, visionaries, skeptics); and
• Overall tips and pitfalls for early markets vs mainstream markets.
Successfully Crossing the Chasm
Companies are especially vulnerable during the chasm period. At this point, the early market is still digesting the new technology and the mainstream market is still not yet ready for it. It’s also hard to enter a mainstream market since the established incumbents will try to block you.
The key to successfully crossing the chasm is to start by focusing singularly on 1 strategic market niche. Quickly establish a solid base (with references, procedures, marketing materials) and use it to spread to adjacent markets. In our complete book summary, we’ll zoom in on the 4 steps to enter and conquer a mainstream market. Here’s a brief overview:
1. Define your Focused Point of Attack
This step is about identifying a “beachhead segment” that you’d use to cross the chasm into the mainstream market. Your goal is to hit the strategic bowling pin that’ll knock down the remaining pins.
In our full Crossing the Chasm summary, you’ll get specific steps on how to (i) define the possible market segments, (ii) create 1-page scenarios to detail each potential customer profile, and (iii) evaluate these options using a checklist of criteria to select just 1 top customer segment which you’ll commit to.
2. Set Up your Strike Force
Define the specific product/offer you’ll need to secure your initial target market, and how you’ll deliver it with available resources.
Get our complete 16-page summary for details on how to: (i) consider 4 parts of a Whole Product, (ii) identify the generic and additional product components needed to satisfy your target customers’ buying objective, and (iii) break down how you’ll deliver them.
3. Define the Battle
To dominate the mainstream market, you must know the landscape, who your competitors are, their relationships with your target customers and how to position yourself to win the battle.
In the full Crossing the Chasm summary, we elaborate on (i) how customer’ top values and concerns evolve as you move down the technology curve from tech enthusiasts to visionaries, pragmatists and conservatives, (ii) the 4 domains of the Competitive Positioning Compass to consider, and (iii) how to position yourself to win over the pragmatists (as your entry point to the mainstream market).
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4. Launch your Invasion
Your #1 priority when crossing the chasm is to secure a distribution channel to your target market. To achieve that, you need the right pricing and distribution strategies.
In our full book summary, we explain (i) how to choose the main distribution channel that best matches your customers type, and (ii) the ideal strategy for setting your initial pricing levels.
Crossing the Chasm Permanently
In the rush to cross the chasm, companies often make unsustainable commitments. To make sure you don’t fall back into the chasm, it’s crucial to make the right decisions from the onset
In our full Crossing the Chasm summary (get full summary here), you’ll get further insights on:
• How to make the right financial decisions (for both investors vs entrepreneurial teams) to make sure you have enough cash and financial resources to survive the chasm and capture the mainstream market.
• Key organizational decisions, including the need to hire creative pioneers for early markets but transition to settlers for mainstream markets, and make sure you compensate both groups appropriately for the different roles they play in the successful launch of your high-tech product.
Other Details in “Crossing the Chasm”
This is a guide-book for marketing high-tech products, packed with detailed concepts, frameworks and case-studies. Besides the insights and examples in this summary, the book also includes:
• Examples of high-tech products in various industries, e.g. Documentum, Salesforce.com, Vmware, Aruba and Lithium;
• Additional principles/insights on positioning, publicity and partnerships; and
• Two appendices that outline (i) the High-Tech Market Development model from the book “Inside the Tonado” and (ii) the Four Gears Model for Digital Consumer Adoption to scale up online adoption.
Do get a copy of the book for the full details, get our Crossing the Chasm book summary bundle for an overview of the various ideas and tips, or check out more resources/details at geoffreyamoore.com.
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