Argues that the most dangerous moment in a high-tech company's life is the transition from visionary early adopters to pragmatist mainstream buyers — a 'chasm' that requires abandoning broad market ambitions to focus all resources on dominating one tiny niche, then expanding outward like bowling pins.
Argues that the most dangerous moment in a high-tech company's life is the transition from visionary early adopters to pragmatist mainstream buyers — a 'chasm' that requires abandoning broad market ambitions to focus all resources on dominating one tiny niche, then expanding outward like bowling pins.
“The fundamental principle for crossing the chasm is to target a specific niche market as your point of attack and focus all your resources on achieving the dominant leadership position in that segment as quickly as possible.”
Moore stating the book's central strategic prescription for how to cross the chasm.
“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.”
Moore defining what constitutes a real market — the reference-based definition that underpins all segmentation decisions.
“It is better to make a coherent bet, everyone rowing in the same direction, and be wrong (because then you can change course quickly) than to delay or waffle (because you learn nothing and get a suboptimal return at every step of the way).”
Moore arguing for decisive commitment to a single beachhead target over hedging across multiple segments.
“The good news in this is that you do not have to pick the optimal beachhead to be successful. What you must do is win the beachhead you have picked.”
Moore reassuring teams paralyzed by the fear of choosing the wrong niche — execution matters more than perfect selection.
“We are, in other words, not a market-driven company; we are a sales-driven company.”
Moore diagnosing the fatal mindset of companies that refuse to stop pursuing any sale at any time, spreading resources too thin to cross the chasm.
Expanding too rapidly and too broadly into loosely bounded markets creates a classic chasm symptom of declining growth that looks like a sales problem but is actually a targeting problem.
Early market success with visionary customers creates no usable reference base for pragmatist buyers, because pragmatists view visionaries as reckless and their endorsement as a warning sign.
Pragmatists buy complete solutions to their specific problems, and the gap between what you ship and what they need to succeed is where most chasm-crossing attempts die.
Why linked: Shares Google, Apple, and United States.
“Develop the whole product relationships slowly, working from existing instances of cooperation toward a more formalized program. Do not try to institutionalize cooperation in advance of credible examples that everyone can benefit from it—not the least of whom should be the customers. Also, do not recruit directly competing partners to serve the same need in the same segment—this will only discourage them from making a full commitment to your program.”
“If high-tech businesses are going to be successful over the long term, they must learn to break this vicious circle and establish a reasonable basis for conservatives to want to do business with them. They must understand that conservatives do not have high aspirations about their high-tech investments and hence will not support high price margins. Nonetheless, through sheer volume, they can offer great rewards to the companies that serve them appropriately.”
“moment of frustration. What is going on? What is the user about to attempt? • Desired outcome: What is the user trying to accomplish? Why is this important? • Attempted approach: Without the new product, how does the user go about the task? • Interfering factors: What goes wrong? How and why does it go wrong? • Economic consequences: So what? What is the impact of the user failing to accomplish the task productively?”
“who in flexing their muscles were making both operators and OEMs increasingly nervous such that they were ready to support the entry of a balancing force.”
“WHOLE PRODUCT: Can our company with the help of partners and allies field a complete solution to the target customer’s compelling reason to buy in the next three months such that we can be in the market by the end of next quarter and be dominating the market within twelve months thereafter? The clock is ticking. We need to cross now, which means we need a problem we can solve now. Any thread left hanging could be the one that trips us up.”
“second rule is, remember the fish-to-pond ratio principle from the prior chapter, and target a market segment that is big enough to matter, small enough to lead, and a good fit with your crown jewels.”
“Big enough to matter, small enough to lead, good fit with your crown jewels.”
“There are four domains of value in high-tech marketing: technology, product, market, and company.”
“Yogi Berra got it right: “If you don’t know where you are going, you will wind up somewhere else.””
“key takeaway here is that the steps of market development outlined in this book structured their entire effort: • They began with a target customer (disenfranchised citizens in developing economies who would be making their very first purchase of an Internet-enabled service) with a compelling reason to buy (access to all the content on the Web for free, plus communications for personal, family, and business purposes). • They figured out the whole product and determined for that product that the operators and the OEM device manufacturers were the critical anchor partners. • They then went after partners who shared their interest in the next two billion, with franchise interests in developing economies, and used their focused requests to create a big enough sales opportunity to get the attention of two world-class OEMs. • When it came time to “create the competition” (something we will get to in the next chapter), the whole ecosystem knew it was Apple and Google, two extremely powerful ecosystems”
“because all their industries were U.S.-centered and “tech savvy,” and because salespeople tend to job hop more than other professions, there was plenty of cross-pollination to help spread the demand virally.”
“These advances will have been sparked by technology breakthroughs, and that will be part of the story, but they are now seen to extend to the entire whole product infrastructure, and that will be the main thrust of the story.”
“Visionaries—the customers dominating the early market’s development—are relatively price-insensitive.”
“the checklist is as follows: 1. Develop a library of target customer scenarios. Draw from anyone in the company who would like to submit scenarios, but go out of your way to elicit input from people in customer-facing jobs. Keep adding to it until new additions are no more than minor variations on existing scenarios.”
“Online adoption is best characterized in terms of four fundamental activities: 1. Acquire traffic 2. Engage users 3. Monetize their engagement 4. Enlist the faithful”
“A DAY IN THE LIFE (AFTER) Now the idea is to take on the exact same situation, along with the exact same desired outcome, but to replay the scenario with the new technology in place. Here you need to capture just three elements: • New approach: With the new product how does the end user go about the task? • Enabling factors: What is it about the new approach that allows the user to get unstuck and be productive? • Economic rewards: What are the costs avoided or benefits gained?”
“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.”
“There are two venues, in general, that lend themselves to whole product stories. The first is the business press. Whole product stories, particularly ones sparked by partnerships and alliances coming together to bring off some wonderful result for a particular company, are the bread and butter of business fare. Companies organizing to bring off this feat consistently, and thereby dominate a particular market segment, are particularly of interest.”
“Onboarding, both for technical and for business process reengineering reasons, had to be carefully supervised.”
“Make your client companies incorporate crossing the chasm into their business plans. Demand to see not only broad, long-term market characterizations but also specific target customers for the D-Day attack. Drive them to refine their value propositions until they are truly compelling, and then use these to test how many target customers there truly are. Force them to define the whole product, and then help them to build relationships with the right partners and allies.”
“Leverage the ongoing project to create one or more whole product extensions that solve some industry-wide problem in an elegant way.”
“it is important to bring along as many of the other players in the market as possible.”
“Focus your communications by reducing your fundamental competitive claim to a two-sentence formula and then managing every piece of company communication to ensure that it always stays within the bounds set out by that formula. In particular, always be sure to reinforce the second sentence of this claim, the one that identifies your primary competition and how you are differentiated from it.”
“1. is accomplishable by mere mortals working in earth time 2. provides the vendor with a marketable product 3. provides the customer with a concrete return on investment that can be celebrated as a major step forward.”
“the reason we have separate markets is that the customers could not have referenced each other.”
“What is important is to celebrate continually the tangible and partial both as useful things in their own right and as heralds of the new order to come.”
“Numerous studies have shown that in the high-tech buying process, word of mouth is the number-one source of information that buyers reference, both at the beginning of the sales cycle, to establish their “long lists,” and at the end, when they are paring down their short ones. Now, for word of mouth to develop in any particular marketplace, there must be a critical mass of informed individuals who meet from time to time and, in exchanging views, reinforce the product’s or the company’s positioning. That’s how word of mouth spreads. Seeding this communications process is expensive, particularly once you leave the early market, which in general can be reached through the technical press and related media. By contrast, pragmatist buyers, as we have already noted, communicate along industry lines or through professional associations.”
“small enough to lead means, in part, too small for the much bigger incumbent to spend a lot of time focusing on. Big fish have trouble competing in small niches.”
“One of the keys in breaking into a new market is to establish a strong word-of-mouth reputation among buyers.”
“for whole product leverage, for word-of-mouth effectiveness, and for perceived market leadership—it is critical that, when crossing the chasm, you focus exclusively on achieving a dominant position in one or two narrowly bounded market segments.”
“the only acceptable message is one of market leadership, your price needs to convey that, which makes it a function of the pricing of comparable products in your identified competitive set. 4. Finally, you must remember that margins are the channel’s reward. Since crossing the chasm puts extra pressure on the channel, and since you are often trying to leverage the equity the channel has in its existing relationships with pragmatist customers, you should pay a premium margin to the channel during the chasm period.”
“The way you design a whole product is to work backward from the target customer’s use case, filling in the blanks as you go along, either with new R&D, an acquisition, a partnership, or an alliance.”
“Target customer characterization is a formal process for making up these images, getting them out of individual heads and in front of a market development decision-making group.”
“industry, geography, department, and job title.”
“For consumer markets, they are demographic: age, sex, economic status, social group.”
“A product manager is normally a member of the development organization who is responsible for ensuring that a product gets created, tested, and shipped on budget, on schedule, and according to specification.”
“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.”
“It is the move from being pioneers to becoming settlers.”
“In off-the-shelf consumer scenarios, the three roles of user, technical buyer, and economic buyer tend to merge into one or two.”
“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.”