Monday, August 24, 2009

Plummeting Down the Chasm

Crossing the Chasm book coverCrossing the Chasm is a seminal book in technology marketing, whose ideas quickly spread through the industry. Originally written in 1991 by Geoffrey Moore, it showed a new take on the technology adoption lifecycle. The lifecycle starts with tech enthusiasts willing to buy an immature product and runs through the majority buyers who make up the bulk of the market, finally trailing off when market saturation is reached. It had been commonly depicted as a bell curve:

Technology Adoption Life Cycle

Moore's key observation is that while the bell curve implies there is a smooth transition from early market to majority, in reality the buyers in the early market are fundamentally different from the majority that comes later. Technology companies who don't appreciate this gap will stumble and often fail once they saturate the small pool of early buyers. Moore referred to this gap as "the chasm."

Technology Adoption Life Cycle

Early adopters are visionaries. They are willing to look at an immature product and figure out how to use it in their operations to get a competitive advantage. They will sponsor integration work within their IT departments, and generate long lists of product feedback to better fit their needs. They are fundamentally different from the majority buyers in that they will look at an interesting product and figure out what problem it can solve. The majority market comes from the opposite direction with a problem to solve, looking for a solution. Product planning and marketing which works in the early part of a product lifecycle will fail utterly later in the game.

Yon Chasm Approacheth

It is quite possible to get stuck in the early market, continuously trying to meet the needs of early adopters and never enjoying the big sales of the majority market. Having spent the last several years in this predicament, I'll offer my version of the lifecycle chart. What it lacks in precision, it makes up for in snark.

Rope bridge with gaps

As a development engineer it can be difficult to tell how well the sales cycle is working as one rarely gets direct visibility, but the indirect evidence is plentiful.

  • If nearly every deal comes with a list of new product features to be implemented, you have not crossed the chasm.
  • If in every medium to large deal it is not clear whether the cost of getting the business is greater than the revenue it would bring, you have not crossed the chasm.
  • If every deal is "high touch," requiring multiple visits by a salesperson and sales engineer and possibly a consultation with the development team, you have not crossed the chasm.
  • If your product cannot be sold via a web site but instead always requires an evaluation period and report, you have not crossed the chasm.
  • If every customer is using a different subset of the product functionality, you have not crossed the chasm.

This is important: if the company does not realize that the real problem is in the approach to the market, all of these things will be blamed on the product. The reasoning will be that "if we just pound out a few more of these deals, we'll have finally implemented everything that everybody wants and sales will take off." There may even be an element of truth in this sentiment, if the product shipped early before its natural feature set was complete. However if the company has not crossed the chasm, the fundamental problem is elsewhere.

You are not getting a list of feature requirements because the product is incomplete, but because you are selling to the type of customer who generates lists of requirements.

You are getting that list of requirements because you are still selling into the visionary and early adopter segments of the market, the people who are willing to think about how best to integrate the product into their operations. If you were selling into the mainstream market there would be no list of requirements because the mainstream won't do an extensive integration on their own. The product either meets their needs or it doesn't, and you'll either get the sale or you won't. In the mainstream there will be no back and forth of what the product could do to win the business. At most, the mainstream buyer might tell you why you lost the business.

Don't get stuck wandering around in the chasm. Trust me, it sucks.