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

by Geoffrey A. Moore

success to chance, you are giving up control over your own destiny. Conversely, by thinking through your customer’s problems—and solutions—in their entirety, you can define—and work to ensure that the customer gets—the whole product.

Surround your disruptive core product, the thing that got you to the dance, with a whole product that solves for the target customer’s problem end to end. That will keep you on the dance floor for a long time to come.

Specialized offerings must focus intensely on what is core to their differentiation, which means that spending anything on context dilutes their ability to scale their value and size.

The key tactic here is to build very clean interfaces for accessing other systems and letting them access you

If you want to go fast, go alone; if you want to go far, go with others. In the age of the Internet you need to do both at the same time, and that’s where whole product partners can make all the difference.

To sum up, whole product definition followed by a strong program of tactical alliances to speed the development of the whole product infrastructure is the essence of assembling an invasion force for crossing the chasm. The force itself is a function of actually delivering on the customer’s compelling reason to buy in its entirety. That force is still rare in the high-tech marketplace, so rare that, despite the overall high-risk nature of the chasm period, any company that executes a whole product strategy competently has a high probability of mainstream market success.

In sum, the pragmatists are loath to buy until they can compare. Competition, therefore, becomes a fundamental condition for purchase. So, coming from the early market, where there are typically no perceived competing products, with the goal of penetrating the mainstream, you often have to go out and create your competition.

By contrast, the mainstream is dominated by generalists who are more interested in market leadership and company stability than in the bits and bytes or speeds and feeds of particular products.

More specifically, creating the competition involves using two competitors as beacons so that the market can locate your company’s unique value proposition. The first of these two competitors we will call the market alternative. This is a vendor that the target customer has been buying from for years. The problem they address is the one we will address, and the budget that is allocated to them represents the money we as the new entrant are going to preempt. To earn the right to this budget, we are going to use a disruptive innovation to address a stubbornly problematic limitation in the traditional offer. The second reference competitor we will call the product alternative. This is a company that is also harnessing the same disruptive innovation we are—or at least close to it—and is positioning itself like us as a technology leader. Their very existence gives credibility to the notion that now is the time to embrace this new discontinuity. Our intent here is to acknowledge their technology but to differentiate from them by virtue of our own segment-specific focus.

If you try out this exercise of choosing the competition, and have trouble finding either a single, clear market alternative, or a credible second vendor leveraging your type of disruptive technology, this is a clue. It means that you are probably not ready to cross the chasm.

So, market alternatives call out the budget and thus the market category, and product alternatives call out the differentiation. It sounds a lot like positioning, the topic to which we will now turn.

People are highly conservative about entertaining changes in positioning. This is just another way of saying that people do not like you messing with the stuff that is inside their heads. In general, the most effective positioning strategies are the ones that demand the least amount of change.

For (target customers—beachhead segment only) • Who are dissatisfied with (the current market alternative) • Our product is a (product category) • That provides (compelling reason to buy). • Unlike (the product alternative), • We have assembled (key whole product features for your specific application).

So building relationships with business press editors, initially around a whole product story, is a key tactic in crossing the chasm.

the vendor more as a consultant than as a salesperson. The goal of a whole product launch campaign, overall, is to develop relationships in support of a positive word-of-mouth campaign for your company and products.

The number-one corporate objective, when crossing the chasm, is to secure a distribution channel into the mainstream market, one with which the pragmatist customer will be comfortable.

The higher the price, the more relationship-oriented the process, the more you focus on the bottom of the funnel.

That all said, vendor-oriented pricing represents the least sound basis for pricing decisions during the chasm period.

Being priced to sell means that price does not become a major issue during the sales cycle. Companies crossing the chasm, coming from success in the early market with visionary customers, typically have their products priced too high.

The post-chasm enterprise is bound by the commitments made by the pre-chasm enterprise.

To begin with, we need to recognize that this is not the purpose of the pre-chasm organization. In building an early market, the fundamental return on investment is investor risk reduction, accomplished through converting an amalgam of technology, services, and ideas into a replicable deployable offering and proving that there are customer use cases that create a demand for this offer.

In fact, however, the revenue line is a servant—and to not just one but two masters. At the front end, it is servant to the entrepreneur’s cost curve, and at the back, to the venture capitalist’s hockey stick expectations. Revenue numbers, under this methodology, are . . . well, whatever they have to be. Once that sum is identified, then market analyst reports are scoured for some appropriate citations, and any other source of evidence or credibility is enlisted, to justify what is a fundamentally arbitrary and unjustifiable projection of revenue growth.

First, the price of category development and market entry is often simply too great to fund with sweat equity or consulting contracts.

The other reason to forgo initial profitability is when the category is expected to develop so rapidly that you cannot afford to grow organically as a bit player.

In this realm, it is typically more capital intensive to cross the chasm than it is to build the early market.

There is a comparable process going on in the sales force at the same time. Here the group at the forefront is the high-tech sales pioneers. These are people who have the gift of selling to visionaries. They are able to understand the technology and product at a level where they can readily manipulate it and adapt it to the dreams of the visionaries. They can talk the visionaries’ language, understand the quantum leap forward that visionaries seek to achieve, and wrap their products in that cloak.

What should increasingly become the prioritizing factor for ongoing product development work is contribution to mainstream, pragmatist customer satisfaction—in other words, contribution to the whole product—hence, the need to transfer authority.

To begin with, we had to target the point of attack, which meant isolating our target customers and their compelling reason to buy. Then we had to assemble the invasion force, constructed around the whole product and the partners and allies needed to make it a reality. The next step was to define the battle, by creating our competition and positioning ourselves, in that context, as being easy to buy. Finally, we had to launch the invasion, selecting our intended distribution channel and setting our pricing to give us motivational leverage over that channel.