Book Summary 8: Crossing the Chasm

Book Summary 8: Crossing the Chasm

Today’s summary is long due. The “Crossing the Chasm” book created a revolution in startup marketing in the 2000s. It’s ideas have impacted both how high-tech multi-billion corporations and how a two person garage startup approach their marketing.

Here are the top seven ideas from this book:

  1. Most businesses plan their marketing based on the traditional “technology adoption lifecycle”, a smooth bell curve. This cycle includes innovators, early adopters, early majory, late majority and laggards. Marketing’s job is assumed to be to work on going from left to right in this curve, progressively capturing new group of users in new segments, using the previous captured group as a reference point.

    Standard Technology Adoption Lifecycle Model

  2. However, this approach falls short as it fai to recognize the gap (“chasm”) that exists between each phase of the curve. This gap is the “difficulty any group will have in accepting the product if it is presented exactly as it was to the group to its immediate left.” This means early adopters will not respond the same way as innovators to the product, if presented the same way. Late majority will not respond the same way as early majority if the product is presented the same way.
  3. The biggest such “chasm” which a startup must overcome is the gap between early adoptors and early majority groups. Most startups and high tech ventures fail trying to make it across this chasm.

    The Chasms – the biggest one is between early adopters and early majority

  4. The gap between the early adopters and early majority is quite natural. Early adopters are visionaries, who are looking for a business or technology goal and have the insight to use new technology as an opportunity. They are willing to compromise on many aspects to be able to early users of new technology. But the early majority are pragmatists, they care about the company they are buying from, the quality, the infrastructure of support and systems, the reliability of service, etc. Also the early majority tend to be people who interact much more with their own group than do early adopters.
  5. Pragmatists are not inclined to reference the visionaries in their buying decisions. This is because characteristics of visionaries alienate pragmatists—such as their disruptiveness, lack of respect for colleagues’ experiences or past methods of doing things, etc.
  6. To cross this “chasm”, the author recommends that companies focus on a single, small, specific market where they can win domination. They can then use this success as a springboard to capture adjacent markets. It is better to select a strategic target market – which has connections which lead into a larger segment.
  7. The steps involved in “crossing the chasm”:
    1. Target the point of attack: “Target a specific market niche as your point of attack and focus all your resources on achieving the dominant leadership position in that segment.”
    2. Assemble an invasion force: Create your entire product and experience by thinking through your customer’s problems– and solutions– in their entirety.
    3. Define the battle: Define clearly your competition, positioning, elevator pitch, communication…
    4. Launch the invasion: “At its centre is the consultative salesperson who works with the client in needs analysis and then, supported by a team of application and technology specialists, develops and proposes solutions, which, after additional interaction with the customer, and a competitive procurement, turn into purchase orders. This is a very expensive way to sell…Direct sales is the optimal channel for high tech. It is also the best channel for crossing the chasm.”

Key takeaways for entrepreneurs:

  • Recognize that what works in attracting your initial customers may not work in attracting the masses
  • Instead of having a small pie of a large market, select a very specific market and become the dominant player there (covering all five segments of the traditional adoption lifecycle). You can use this as a reference point to enter new markets. Your specific market would usually be a very small niche, or a small geography…
  • Do not ignore the power of direct sales force

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