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

by Geoffrey A. Moore

To be specific, 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.

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.

It turns out our attitude toward technology adoption becomes significant—at least in a marketing sense—any time we are introduced to products that require us to change our current mode of behavior or to modify other products and services we rely on. In academic terms, such change-sensitive products are called discontinuous or disruptive innovations. The contrasting term, continuous or sustaining innovations, refers to the normal upgrading of products that does not require us to change behavior.

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.

What the early adopter is buying, as we shall see in greater detail in Chapter 2, is some kind of change agent. By being the first to implement this change in their industry, 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. They expect a radical discontinuity between the old ways and the new, and they are prepared to champion this cause against entrenched resistance. Being the first, they also are prepared to bear with the inevitable bugs and glitches that accompany any innovation just coming to market.

By contrast, the early majority want to buy a productivity improvement for existing operations. They are looking to minimize the discontinuity with the old ways. They want evolution, not revolution. They want technology to enhance, not overthrow, the established ways of doing business. And above all, they do not want to debug somebody else’s product. By the time they adopt it, they want it to work properly and to integrate appropriately with their existing technology base.

In sum, when promoters of high-tech products try to make the transition from a market base made up of visionary early adopters to penetrate the next adoption segment, the pragmatist early majority, they are effectively operating without a reference base and without a support base within a market that is highly reference oriented and highly support oriented.

First there is a market . . . Made up of innovators and early adopters, it is an early market, flush with enthusiasm and vision and, often as not, funded by a potful of customer dollars earmarked for accomplishing some grand strategic goal. Then there is no market . . . This is the chasm period, during which the early market is still trying to digest its ambitious projects, and the mainstream market waits to see if anything good will come of them. Then there is. If all goes well, and the product and your company pass through the chasm period intact, then a mainstream market does emerge, made up of the early and the late majority. With them comes the real opportunity for wealth and growth. To reap the rewards of the mainstream market, your marketing strategy must successfully respond to all three of these stages.

If two people buy the same product for the same reason but have no way they could reference each other, they are not part of the same market.

Marketing professionals insist on market segmentation because they know that no meaningful marketing program can be implemented across a set of customers who do not reference each other.

The initial customer set for a new technology product is made up primarily of innovators and early adopters. In the high-tech industry, the innovators are better known as technology enthusiasts or just techies, whereas the early adopters are the visionaries. It is the latter group, the visionaries, who dominate the buying decisions in this market, but it is the technology enthusiasts who are first to realize the potential in the new product. High-tech marketing, therefore, begins with the techies.

Visionaries are that rare breed of people who have the insight to match up an emerging technology to a strategic opportunity, the temperament to translate that insight into a high-visibility, high-risk project, and the charisma to get the rest of their organization to buy into that project.

As a class, visionaries tend to be recent entrants to the executive ranks, highly motivated, and driven by a “dream.” The core of the dream is a business goal, not a technology goal, and it involves taking a quantum leap forward in how business is conducted in their industry or by their customers. It also involves a high degree of personal recognition and reward. Understand their dream, and you will understand how to market to them.

Visionaries are not looking for an improvement; they are looking for a fundamental breakthrough. Technology is important only insomuch as it promises to deliver on this dream.

The key point is that, in contrast with the technology enthusiast, a visionary focuses on value not from a system’s technology per se but rather from the strategic leap forward such technology can enable.

When pragmatists buy, they care about the company they are buying from, the quality of the product they are buying, the infrastructure of supporting products and system interfaces, and the reliability of the service they are going to get. In other words, they are planning on living with this decision personally for a long time to come.

Most companies fail to cross the chasm because, confronted with the immensity of opportunity represented by a mainstream market, they lose their focus, chasing every opportunity that presents itself, but finding themselves unable to deliver a salable proposition to any true pragmatist buyer. The D-Day strategy keeps everyone on point—if we don’t take Normandy, we don’t have to worry about how we’re going to take Paris. And by focusing our entire might on such a small territory, we greatly increase our odds of immediate success.

To put it simply, the consequences of being sales-driven during the chasm period are fatal.

So, if we want market leadership early on—and we do, since we know pragmatists tend to buy from market leaders, and our number-one marketing goal is to achieve a pragmatist installed base that can be referenced—the only right strategy is to take a “big fish, small pond” approach.

Has this problem already been addressed by another company such that they have crossed the chasm ahead of us and occupied the space we would be targeting? Dick Hackborn, the HP executive who led the move into laser printers, had a favorite saying: “Never attack a fortified hill.” Same with beachheads. If some other company got there before you, all the market dynamics that you are seeking to make work in your favor are already working in its favor. Don’t go there.

So the rules of thumb in crossing the chasm are simple: Big enough to matter, small enough to lead, good fit with your crown jewels.

There is a widespread perception among high-tech executives that marketing consists primarily of some long-range strategic thinking (when you can afford to take the time for it) and then a lot of tactical sales support—with nothing in between. In fact, marketing’s most powerful contribution happens right in between. It is called whole product marketing, a term introduced earlier, and it is the fundamental basis for assembling the invasion force.

The single most important difference between early markets and mainstream markets is that the former are willing to take responsibility for piecing together the whole product (in return for getting a jump on their competition), whereas the latter are not. Failure to recognize this principle has been the downfall of many a high-tech enterprise.

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.

Chasm crossing requires a single target beachhead segment, and in that segment, there needs to exist already the budget dollars to buy your offer. To be sure, the budget will be “misnamed,” because it will be allocated to some brain-dead, ineffective Band-Aid approach to solving what has become a broken, mission-critical process. But it must exist, or else you will lose a full year just in educating the market to put aside money that might be used to buy your product in the following year.

In sum, to the pragmatist buyer, the most powerful evidence of leadership and likelihood of competitive victory is market share. In the absence of definitive numbers here, pragmatists will look to the quality and number of partners and allies you have assembled in your camp, and their degree of demonstrable commitment to your cause. The operating principle here is that you identify leaders by their followers. The kind of evidence this buyer is looking for is signs of co-marketing, such as joint sales calls and cross-referencing each other’s products in sales literature, and consistent mutual support even when the other party is not present in the room.

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. Price does become an issue with the pragmatist customer, but when the channel feeds back prospect resistance and uses comparable products as evidence of the expected pricing, companies too often argue that they have no such competition, and that the channel does not know how to sell the product properly.

Turning from issues of finance to issues of people, we must recognize that the chasm inherently separates visionaries from pragmatists—not only among the customers for technology-based offerings but also among the companies that serve them. To leave the chasm behind, to cross it and not fall back into it, involves a transformation in the enterprise that few individuals can span. It is the move from being pioneers to becoming settlers.

In the development organization, pioneers are the ones who push the edge of the technology application envelope. They do not institutionalize. They do not like to create infrastructure. They don’t even like to document. They want to do great deeds, and when there are no more great deeds to be done, they want to move on. Their brilliance fuels the early market, and without them, there would be no such thing as high tech.

Moore’s notion of Pioneers is similar to what Robert X. Cringely’s calls Commandos in Accidental Empires.

Not all organizations separate product managers from product marketing managers, but they should. Combining the jobs almost always results in one or the other simply not getting done. And the type of people who are good at one are rarely good at the other.