Ways to Eliminate the Startup Chasm – Geoffrey Moore

by Wendy Soon on June 2, 2014

Geoffrey_MooreGeoffrey Moore, the man who wrote the essential read for every Startup founder “Crossing the Chasm”, spoke about how to deal with the chasm as if it never really existed!

Here is the Video of the event!

Before knowing how to deal with the chasm, know what it is:

If you introduce a disruptive innovation into any community, anywhere in the world, that community will self segregate into 5 responses: technology enthusiasts (3%), Visionaries (15%), Pragmatists (33%), Conservatists (33%) and Laggards (15%).

  1. Technology Enthusiasts. These people buy into the very beginning of the innovation, being interested in the innovation itself. They will download the alpha product. Even if they have no need of it, they just want to know what it is. E.g. Google Glass – I don’t need it, I don’t know what it is, but I just want it! They don’t care the heck about the economics of the product, but its properties. And very passionately about the properties. The other four groups depend on this group to tell them if the product really works. So make sure you impress them.
  2. Visionaries. These people are not so interested in the properties of the disruption, but the power of it. They want to use it to re-engineer whatever they care about. E.g. Netscape navigator re-engineering the world wide web; Jeff Bezos re-inventing commerce over the internet; Apple re-engineering the music industry. They redefine whole industries. When visionaries succeed, the consequences are enormous. It affects everyone. The impact is big, and when they don’t happen, they become just “small, smoking craters” that just go unnoticed.
  3. Early Majority / Pragmatists. They follow herd mentality and look for the flash point. They will say things like: I think I need this technology, but I don’t think I can afford this, nor want to really invest this amount of money in it. I want to use this technology when it is ready for prime time. I will first poll my peers to see what they are doing. No one’s doing it? Nah. OH WAIT. EVERYONES DOING IT?? Ok, I’m getting it too! They are very interested in what you’re doing, want to know everything about it, but don’t really buy it. But, when they do buy, they buy it in a big way. They are the ones that deploy technologies over the entire enterprises. E.g. social community, cloud computing.
  4. Conservatists. These are the ones who will say: This thing will never work for me. You’ve used it? Ok, maybe I’ll get it. Hopefully by then it has been completely debugged, and it should be manufactured in such a large scale that it is cheap.
  5. Laggards. “You guys are instruments of the devil. I’m going to be Amish. I’m not going to ever be a part of this crap.”

The first 2 groups like to go early, and they represent “The Early Market”. These people do it because they want to win, and be part of the new opportunity. Just talking about your technology and yourself can sell your product to the early market. The remaining 3 groups wait longer. They are pragmatists in pain, the ones that actually face the problem and need to solve it. They look into the chasm to see if there is anything to help them. They actually need you, but are skeptical to picking up new things. The gap between the 2 big groups is The Chasm.

 

It’s a completely different game when dealing with the two different group. Instead of just talking about the technology (which will bring you your early market customers), the pragmatists want you to show you understand them. Not to come across as a technologist, but someone who understands their problem thoroughly to help them solve it. 80% of the time you need to focus on them, not you or your product.

 

The tornado is when the board flips. From “No way”, to “Yes, I must have it!”.

 

To deal with that inevitable startup chasm, here is what Geoffrey Moore recommends, as the 4 Adoption strategies:

  1. Get BHD not SLDs. Big Hairy Deal not Small Little Deals. Sell yourself into trouble, and work your way out. (Basically exaggerate using the future, pretending it is in the present). Do this with big, flagship customers to get yourself started ahead of the herd.
  2. Isolate a very specific use case for this particular product in a particular industry. Get very application specific. That is why crossing the chasm is so hard. You love your technology so much, that you don’t want to customize it just for someone who actually wants to use the technology for something else. E.g. Jobs created the Mac, but the Graphics department wanted it. Jobs was upset because the Mac was not meant for just Graphics but for everyone, but when he backed down, the Mac was adopted by the graphics department, which then snowballed to the sales/marketing department and then everyone else. Just hit that first bowling pin, then go on and on and on…
  3. Catch the wave. Set the default, and Just. Ship. It. Catch it within that time frame. Miss it like Nokia, and you miss it forever.
  4. Go after the herd. Maintain a relationship to keep market share. Now apologize to those you offended in the 3rd adoption phase, and get their feedback. It is now about maintaining a long term relationship with your customers.

What makes you succeed at each of these adoption stages, will make you fail at the next one. From one to another, be a Liar, then focus on the customer, then ignore the customer, before apologizing to them again to maintain a long term relationship. So you need to be extremely clear of which adoption stage you are currently playing to. The difficult part is not just deciding where you are, but getting your entire team to agree on the same stage!

 

If you make the wrong choice, stop immediately and switch gears! Don’t argue who made the wrong choice, but switch your direction immediately and start marketing differently. The good thing about these 4 strategies is that because they are so different, the moment you know you are wrong, and you switch 180 degrees, there is a very high chance you will get it right!

 

For the full video of his talk at our meetup, click here. Slides are available HERE.

 

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