Crossing the Chasm: Marketing and Selling Disruptive Products to Mainstream Customers

by Geoffrey A. Moore

First of all, it turned out that the metaphor of the chasm and the recommendations for how to cross it struck a deep chord among experienced high-tech managers.

it really didn’t tell them anything they didn’t know already. Rather it captured what had been for them scattered intuitions and rueful learnings and put them into a coherent set of frameworks that could be used for future decision making.

Students liked the book because it was both descriptive and prescriptive in clear terms, largely because it communicates the core of its arguments through metaphors, mixed though they often may be. If you bought into the analogies, you pretty much had the essence of the book, and reading it was just a confirmation of what you already knew.

chasms are a perennial feature of the tech sector’s landscape.

much water has passed under the bridge in the past decade, but once you start remodeling the bridge, you end up having to reconstruct it end to end.

Prior to this era, IT categories almost always began life as business-to-business affairs with a subset eventually trickling down to business-to-consumer markets after the technology had been proven and cost reduced.

But in this century, it has been the B2C businesses that have led the way, and it is just now that the B2B players are reaching out to bring these technologies into the enterprise.

you can see it really does take a village.

most impactful of all have been the hundreds of clients who have brought to our consulting engagements the most interesting problems and the most engaging energy. They are the ones who inspire us all.

High-tech innovation and marketing expertise are two cornerstones of the U.S. strategy for global competitiveness. We will never have the lowest cost of labor or raw materials, so we must continue to exploit advantages further up the value chain. If we cannot at least learn to predictably and successfully bring high-tech products to market, our countermeasures against the onslaught of commoditizing globalization will falter, placing our entire standard of living in jeopardy.

Elsewhere—in cars or consumer electronics or apparel—we may see ourselves being outmanufactured, but not outmarketed.

Indeed, even after we have lost an entire category of goods to offshore competition, we remain the experts in marketing these goods to U.S. consumers.

As a result, our marketing ventures, despite normally promising starts, drift off course in puzzling ways, eventually causing unexpected and unnerving gaps in sales revenues, and sooner or later leading management to undertake some desperate remedy. Occasionally these remedies work out, and the result is a high-tech marketing success. (Of course, when these are written up in retrospect, what was learned in hindsight is not infrequently portrayed as foresight, with the result that no one sees how perilously close to the edge the enterprise veered.)

the point of greatest peril in the development of a high-tech market lies in making the transition from an early market dominated by a few visionary customers to a mainstream market dominated by a large block of customers who are predominantly pragmatists in orientation.

A successful crossing is how high-tech fortunes are made; failure in the attempt is how they are lost.

That said, like a hermit crab that has outgrown its shell, the company crossing the chasm must scurry to find its new home. Until it does, it will be vulnerable to all kinds of predators.

Marketing has long known how to exploit fads and how to develop trends. The problem, since these techniques are antithetical to each other, is that you need to decide which one—fad or trend—you are dealing with before you start. It would be much better if you could start with a fad, exploit it for all it was worth, and then turn it into a trend.

One of the most important lessons about crossing the chasm is that the task ultimately requires achieving an unusual degree of company unity during the crossing period.

This is a time when one should forgo the quest for eccentric marketing genius in favor of achieving an informed consensus among mere mortals. It is a time not for dashing and expensive gestures but rather for careful plans and cautiously rationed resources—a time not to gamble all on some brilliant coup but rather to focus everyone on pursuing a high-probability course of action and making as few mistakes as possible.

If prudence rather than brilliance is to be our guiding principle, then many heads are better than one. If market forces are going to be the guiding element in our strategy—and most organizations insist this is their goal—then their principles must be accessible to all the players, and not, as is sometimes the case, reserved to an elect few who have managed to penetrate their mysteries.

For example, when Warby Parker promises you better-looking eyeglasses, that is a continuous innovation. You still are wearing the same combination of lenses and frames, you just look cooler. When Ford’s Fusion promises better mileage, when Google Gmail promises you better integration with other Google apps, or when Samsung promises sharper and brighter TV pictures across bigger and bigger screens, these are all continuous innovations. As a consumer, you don’t have to change your ways in order to take advantage of these improvements.

On the other hand, if the Samsung were a 3-D TV, it would be incompatible with normal viewing, requiring you to don special glasses to get the special effects. This would be a discontinuous innovation because you would have to change your normal TV-viewing behavior.

you would be required to seek out a whole new set of software, thereby classifying this too as a discontinuous innovation.

In all these cases, the innovation demands significant changes by not only the consumer but also the infrastructure of supporting businesses that provide complementary products and services to round out the complete offer. That is how and why such innovations come to be called discontinuous.

Internet TVs do not require any special viewing glasses, but they do require the consumer to be “digitally competent.”

All these, like the special washing instructions for certain fabrics, the special street lanes reserved for bicycle riders, the special dialing instructions for calling overseas, represent some new level of demand on the consumer to absorb a change in behavior. That’s the price of modernization. Sooner or later, all businesses must make these demands. And so it is that all businesses can profit by lessons from high-tech industries.

Whereas other industries introduce discontinuous innovations only occasionally and with much trepidation, high-tech enterprises do so routinely and as confidently as a born-again Christian holding four aces.

the Technology Adoption Life Cycle became central to the entire sector’s approach to marketing.

Innovators pursue new technology products aggressively. They sometimes seek them out even before a formal marketing program has been launched. This is because technology is a central interest in their life, regardless of what function it is performing.

Early adopters, like innovators, buy into new product concepts very early in their life cycle, but unlike innovators, they are not technologists. Rather they are people who find it easy to imagine, understand, and appreciate the benefits of a new technology, and to relate these potential benefits to their other concerns.

The early majority share some of the early adopter’s ability to relate to technology, but ultimately they are driven by a strong sense of practicality. They know that many of these newfangled inventions end up as passing fads, so they are content to wait and see how other people are making out before they buy in themselves.

The late majority shares all the concerns of the early majority, plus one major additional one: Whereas people in the early majority are comfortable with their ability to handle a technology product, should they finally decide to purchase it, members of the late majority are not. As a result, they wait until something has become an established standard, and even then they want to see lots of support and tend to buy, therefore, from large, well-established companies.

To recap the logic of the Technology Adoption Life Cycle, its underlying thesis is that technology is absorbed into any given community in stages corresponding to the psychological and social profiles of various segments within that community. This process can be thought of as a continuum with definable stages, each associated with a definable group, and each group making up a predictable portion of the whole.

That model says that the way to develop a high-tech market is to work the curve left to right, focusing first on the innovators, growing that market segment, then moving on to the early adopters, growing that segment, and so on, to the early majority, late majority, and even to the laggards. In this effort, companies must use each “captured” group as a reference base for launching their marketing into the next group. Thus the endorsement of innovators becomes an important tool for developing a credible pitch to the early adopters, that of the early adopters to the early majority, and so on.

It is important to maintain momentum in order to create a bandwagon effect that makes it natural for the next group to want to buy in. Too much of a delay and the effect would be something like hanging from a motionless vine—nowhere to go but down.

This, in essence, is the High-Tech Marketing Model—a vision of a smooth unfolding through all the stages of the Technology Adoption Life Cycle.

And with Facebook along came the grandparents, historically a conservative if not a laggard constituency when it came to anything computer related. And finally it got to toddlers and babies, and God help us, kittens interacting directly with the screens and experiencing frustration with any image that fails to respond like an iPad.

The first is between the innovators and the early adopters. It is a gap that occurs when a hot technology product cannot be readily translated into a major new benefit—something like Esperanto. The enthusiast loves it for its architecture, but nobody else can even figure out how to start using it.

The challenge here is primarily technological, meaning that the gap is simply too great between the Google-class processing power needed to create a truly seamless experience (our neurons are very fussy consumers indeed) and the personal budgets that would fund any of these applications at scale.

the key to getting beyond the enthusiasts and winning over a visionary is to show that the new technology enables some strategic leap forward, something never before possible, which has an intrinsic value and appeal to the nontechnologist.

This benefit is typically symbolized by a single, compelling flagship application, something that showcases the power and value of the new product.

Simply put, the early majority is willing and able to become technologically competent where necessary; the late majority is not.

Home automation, programmable appliances, and high-end cameras are all currently in this situation, as are a whole slew of telephones that offer call forwarding, three-way conferencing, or even just call transferring. How many times have you been on the phone and heard—or said—“Now I may lose you when I hit the transfer button, so be sure to call back if I do.” The problem is that for people who are not frequent users of the system the protocols are simply too hard to remember.

companies in mature markets find it harder and harder to get paid for the R&D they have done because the end user cannot capture the benefit.

Other examples of products in danger of falling through the crack between the early and late majority are scanning and project management software. The market leaders in these two areas, Hewlett-Packard and Microsoft respectively, have been quite successful in capturing the early majority, but their products still give conservatives in the late majority pause. And so these categories are in danger of stagnating although neither market has ever in fact been saturated.

the early adopters expect to get a jump on the competition, whether from lower product costs, faster time to market, more complete customer service, or some other comparable business advantage.

Being the first, they also are prepared to bear with the inevitable bugs and glitches that accompany any innovation just coming to market.

the early majority want to buy a productivity improvement for existing operations.

Because of these incompatibilities, early adopters do not make good references for the early majority. And because of the early majority’s concern not to disrupt their organizations, good references are critical to their buying decisions. So what we have here is a catch-22. The only suitable reference for an early majority customer, it turns out, is another member of the early majority, but no upstanding member of the early majority will buy without first having consulted with several suitable references.

First there is a mountain, Then there is no mountain, Then there is. —Zen proverb