Geoffrey A. Moore

"Review the whole product from each participant’s point of view. Make sure each vendor wins, and that no vendor gets an unfair share of the pie. Inequities here, particularly when they favor you, will instantly defeat the whole product effort—companies are naturally suspicious of each other anyway, and"

"There are four domains of value in high-tech marketing: technology, product, market, and company."

"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."

"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."

"Visionaries—the customers dominating the early market’s development—are relatively price-insensitive."

"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."

"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."

"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?"

"the reason we have separate markets is that the customers could not have referenced each other."

"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."

"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."

"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."

"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 off-the-shelf consumer scenarios, the three roles of user, technical buyer, and economic buyer tend to merge into one or two."

"1) what we ship and 2) whatever else the customers need in order to achieve their compelling reason to buy."

"Accelerate the formation of whole product infrastructure within a specific target market segment in support of a segment-specific compelling reason to buy."

"Whole products grow up around the market-leading products and not around the others."

"a set of actual or potential customers •    for a given set of products or services •    who have a common set of needs or wants, and •    who reference each other when making a buying decision."

"The basis for reform is the principle that winning at marketing more often than not means being the biggest fish in the pond. If we are very small, then we must search out a very small pond, a target market segment that fits our size. To qualify as a “real pond,” as we also noted before, its members must be aware of themselves as a group, that is, it must constitute a self-referencing market segment, so that when we establish a leadership position with some of its members, they will get the word out—quickly and economically—to the rest."

"Crossing the chasm requires moving from an environment of support among the visionaries back into one of skepticism among the pragmatists."

"First you divide up the universe of possible customers into market segments. Then you evaluate each segment for its attractiveness. After the targets get narrowed down to a very small number, the “finalists,” then you develop estimates of such factors as the market niches’ size, their accessibility to distribution, and the degree to which they are well defended by competitors. Then you pick one and go after it. What’s so hard?"

"The first is knocking over the head pin, taking the beachhead, crossing the chasm (and chaining together three mixed metaphors to do it!)."

"The first rule is you have to leverage a point of disruption, one that puts the incumbent a bit back on its heels."

"We began by isolating a fundamental flaw in the prevailing High-Tech Marketing Model—the notion that rapid mainstream market growth could follow continuously on the heels of early market success. By analyzing the characteristics of visionaries and pragmatists, we were able to see that a far more normal development would be a chasm period of little to no growth. This period was identified as perilous indeed, giving companies every incentive to pass through it as rapidly as possible."

"This is a classic case of “So many segments, so little time”—exactly the sort of thing that target customer scenarios are best for. A representative format for any given scenario is illustrated in the following section. A finished scenario should be limited to a single page. As you will see from the example, this is a highly tactical exercise in microcosm, but it has major implications for how marketing strategy is set overall. So as we work through the example, we will also keep an eye out for the broader implications."

"Useful in this context means actionable—can we find in the concept of marketing a reasonable basis for taking actions that will predictably and positively affect company revenues? That, after all, is the purpose of this book."

"Market Development Strategy Checklist. This list consists of a set of issues around which go-to-market plans are built, each of which incorporates a chasm-crossing factor, as follows: •    Target customer •    Compelling reason to buy •    Whole product •    Partners and allies •    Distribution •    Pricing •    Competition •    Positioning •    Next target customer"

"Number and publish the scenarios in typed form, one page per scenario. Accompanying the bundle, provide a spreadsheet with the rating factors assigned to columns and the scenarios assigned to rows. Break the rating factors into two subtotals, showstoppers first, then nice-to-haves."

"The place where most crossing-the-chasm marketing segmentation efforts get into trouble is at the beginning, when they focus on a target market or target segment instead of on a target customer."

"The bowling pin model allows you both to focus on the immediate market, keeping the burn rate down and the market development effort targeted, while still keeping in view the larger win."

"The key idea here is to focus on the So what? and the Who cares? part of the"

"software programs at the application layer are “naturally vertical” because they directly interface with end users, and end users organize themselves by geography, industry, and profession."

"Whole product commitments, however, are expensive. Even when we recruit partners and allies to help fulfill them, they require resource-intensive management. And when the support role falls back on us, it often requires the attention of our most key people, the same people who are critical to every other project we have going. Therefore, whole product commitments must be made not only sparingly but also strategically—that is, made with a view toward leveraging them over multiple sales. This can only happen if the sales effort is focused on a single niche market."

"To become a going concern, a persistent entity in the market, you need a market segment that will commit to you as its de facto standard for enabling a critical business process. To become that de facto standard, you need to win at least half, and preferably a lot more, of the new orders in the segment over the next year."

"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. The gap between these two markets, all too frequently ignored, is in fact so significant as to warrant being called a chasm, and crossing this chasm must be the primary focus of any long-term high-tech marketing plan. A successful crossing is how high-tech fortunes are made; failure in the attempt is how they are lost."

"the third rule, the one this chapter is about: 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"

"referenced—the only right strategy is to take a “big fish, small pond” approach."

"We do not have, nor are we willing to adopt, any discipline that would ever require us to stop pursuing any sale at any time for any reason. We are, in other words, not a market- driven company; we are a sales-driven company."

"the whole product manager is a product-marketing-manager-to-be."

"That’s it. That’s the strategy. Replicate D-Day, and win entry to the mainstream. Cross the chasm by targeting a very specific niche market where you can dominate from the outset, drive your competitors out of that market niche,"

"The comparison is straightforward enough. Our long-term goal is to enter and take control of a mainstream market (Western Europe) that is currently dominated by an entrenched competitor (the Axis). For our product to wrest the mainstream market from this competitor, we must assemble an invasion force comprising other products and companies (the Allies). By way of entry into this market, our immediate goal is to transition from an early market base (England) to a strategic target market segment in the mainstream (the beaches at Normandy). Separating us from our goal is the chasm (the English Channel). We are going to cross that chasm as fast as we can with an invasion force focused directly and exclusively on the point of attack (D-Day). Once we force the competitor out of our targeted niche markets (secure the beachhead), then we will move out to take over adjacent market segments (districts of France) on the way toward overall market domination (the liberation of Western Europe)."

"value proposition. If the who has the clout and the budget, and the what is a big enough reward, then the risk of sponsoring an early market purchase is worth taking."

"To secure that monopoly, you need to understand 1) what a whole product consists of and 2) how to organize a marketplace to provide a whole product incorporating your company’s offering."

"The first of these might be called the target market segment manager, and the second the whole product manager."

"NEXT TARGET CUSTOMER: If we are successful in dominating this niche, does it have good “bowling pin” potential? That is, will these customers and partners facilitate our entry into adjacent niches?"

"In the pragmatist’s domain, competition is defined by comparative evaluations of products and vendors within a common category."

"A DAY IN THE LIFE (BEFORE) The idea here is to describe a situation in which the user is stuck, with significant consequences for the economic buyer."

"Can’t we go after more than one target? The simple answer is no. (The more complex answer is also no, but it takes longer to explain.)"

"In this library we have captured actual use cases from every current customer, every interesting prospect whether won, lost, or in waiting, as well as other interesting prospects that we might know about from past lives."

"The target market segment manager has one goal in his or her short job life—Transform a visionary customer relationship into a potential beachhead for entry into the mainstream vertical market that that particular customer participates in."

"Price in the mainstream market carries a message, one that can make your product easier—or harder—to sell. Since"

"To do that, we must ensure that the customer gets not just the product but what we will describe in a later chapter as the whole product—the complete set of products and services needed to achieve their desired result, the thing we promised them to get the purchase order."

"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."

"Overall, to market to pragmatists, you must be patient. You need to be conversant with the issues that dominate their particular business. You need to show up at the"

"Financial analysts are usually quite open to briefings on emerging market opportunities, and in that context, can be wooed to take an interest in an emerging entrepreneurial venture."

"key lesson to learn here is that you want to target a beachhead segment that is: •    Big enough to matter •    Small enough to win, and a •    Good fit with your crown jewels."

"when crossing the chasm, we are looking to attract customer-oriented distribution with one of our primary lures being distribution-oriented pricing."

"once there are more than one or two comparable products in the marketplace, then investing in additional R&D at the generic level has a decreasing return, whereas there is an increasing return from marketing investments at the levels of the expected, the augmented, or the potential product."

"When scenarios are scored against these four factors, 1 to 5, the worst aggregate score they can get"

"The lighting fixture manufacturers meanwhile are seeing the writing on the wall and are beginning to publish designs suitable for 3-D printing. These will have lower prices, to be sure, but much higher margins, so they hope at the end of the day to make more money on less capital than in the past. And because the designs are just software, it is much easier to display them virtually over the Web, cutting out the need to man booths at expensive trade shows."

"It is not just about the money you make from the first niche: It is the sum of that money plus the gains from all subsequent niches. It is a bowling alley estimate, not just a head pin estimate, that should drive the calculation of gain. This"

"Scene or situation: Focus on the"

"The prime goal is to secure access to a customer-oriented distribution channel. This is the channel you predict that mainstream pragmatist customers would expect and want to buy your product from."

"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)."

"Recap: Tips on Whole Product Management 1.   Use the doughnut diagram to define—and then to communicate—the whole"

"The fundamental strategic principle was to launch a D-Day type of invasion, one focused on a highly specific target segment within a mainstream marketplace."

"Sample Scenario 1. HEADER INFORMATION. At the top of the page you need thumbnail information about the end user, the technical buyer, and the economic buyer of the offer. For business markets, the key data are:"

"To get an early market started requires an entrepreneurial company with a breakthrough technology product that enables a new and compelling application, a technology enthusiast who can evaluate and appreciate the superiority of the product over current alternatives, and a well-heeled visionary who can foresee an order-of-magnitude improvement from implementing the new application."

"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."

"since we are trying to pick a target market segment that we have not yet penetrated to any great extent, by definition we also lack experience in that arena."

"The statement of position is not the tagline for the ad."

"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."

"experimented with a number of possible beachhead markets, and had particular success with professional speakers (a more generalized version of the marketing guru segment), fitness studios, and dentists (these last two both having a “retention marketing” objective that particularly lent itself to online reminders)."

"For our sample scenario, we are going to focus on a lighting designer who is bringing to market a new line of fixtures for the home. The plan is to sell these through wholesale distributors to interior decorators and designers acting as agents for their relatively wealthy clientele. In this context our key header information is:"

"Review the whole product to ensure it has been reduced to its minimal set. This is the KISS philosophy (Keep It Simple, Stupid). It is hard enough to manage a whole product without burdening it with unnecessary bells and whistles."

"that markets—particularly high-tech markets—are made up of people who reference each other during the buying decision. As we move from segment to segment in the technology adoption life cycle, we may have any number of references built up, but they may not be of the right sort."

"During the implementation of the first installation, introduce into the account his own replacement, a true account manager, a “settler,” who will serve this client, hopefully, for many years to come."

"End user: The interior designer who will guide the client in making the choice."

"All these successes were pre-chasm, based on individuals applying technical know-how to solve corner-case problems. To cross the chasm you need a use case that poses equally challenging problems for the status quo solutions on a recurring basis. In the case of VMware its chasm-crossing use case showed up in the testing phase of the software development life cycle."

"moving from the familiar ground of product-oriented issues to the unfamiliar ground of market-oriented ones, and from the familiar audience of like-minded specialists to the unfamiliar audience of wary generalists."

"Positioning exists in people’s heads, not in your words. If you want to talk intelligently about positioning, you must frame a position in words that are likely to actually exist in other people’s"

"The key to making a smooth transition from the pragmatist to the conservative market segments is to maintain a strong relationship with the former, always giving them an open door to go to the new paradigm, while still keeping the latter happy by adding value to the old infrastructure."

"To be the leader in any given market, you need the largest market share—typically over 50 percent of the new sales at the beginning of a market, although it may end up to be as little as 30–35 percent later on."