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Customers Crossing the Chasm 29 Aug 05 Geoffrey Moore’s books Crossing the Chasm and Inside the Tornado remain important references for those introducing new technology-based products.
Geoffrey Moore
Building on earlier work on the diffusion of innovations, Moore argued that there is a large gulf between the visionaries in the “early market” and the pragmatists in the “mainstream market.” The visionaries may be extremely interested in your product, buying it and talking about it. At the same time, the mainstream market remains stubbornly skeptical or uninterested.
Unfortunately, you only make money in the mainstream market.
The Technology Adoption Life Cycle
The chasm represents the gulf between the visionaries and the pragmatists.
As Moore noted in his book Inside the Tornado:
“Whenever truly innovative high-tech products are first brought to market, they will initially enjoy a warm welcome in an early market made up of technology enthusiasts and visionaries but then will fall into a chasm during which sales will falter and often plummet. If the products can successfully cross this chasm [my italics], they will gain acceptance within a mainstream market dominated by pragmatists and conservatives … crossing the chasm becomes an organizational imperative.” Geoffrey Moore, Inside the Tornado, pp. 19-20.
I recently had a chance to talk with Prof. Joe Lassiter, who is the MBA Class of 1954 Prof. of Management Practice at Harvard’s Business School. Like Geoffrey Moore, his focus is on new companies that create new, high growth ventures.
Lassiter agrees with the issues framed by Moore – the difference between visionaries and pragmatists, and the existence of an adoption chasm. He takes issue with one phrase above:
“… If the products can successfully cross this chasm …”
Lassiter believes that in most cases it’s not the innovating products that are crossing a chasm; instead, he sees reluctant customers being pushed towards new solutions by external, disruptive events that force them to take a risk and buy something new.
As he notes:
“I’ve often seen cases in which the market moves to the company rather than the other way around. Some kind of disruption forces these pragmatic companies to change their usual operations and look for a new solution.”
The basic premise underlying this view is that change is extremely risky – as a result, most companies are reluctant to change and will only do so when they have no alternative.
Consider Paul Purdue, for example, the president of ifulfill.com, a fast-growing e-commerce shipping company in Maumee, Ohio. Geoffrey Moore would describe him as a Visionary. He came to Business Week’s attention recently because he was keeping a blog as his company went bankrupt, and upset customers posted many unkind remarks.
Paul Purdue, Visionary
Paul Purdue’s company didn’t go bankrupt because of his blog, however. It went bankrupt because he was too innovative – his company installed a new wireless inventory system in February that they could not use effectively. In this case, Purdue’s visionary decision to try a new system led to the bankruptcy of his company.
Because innovation is risky, companies won’t change unless they have to. Innovations succeed when they find customers who have to change – who have to move across the chasm.
While these observations seem straightforward, they run counter to the widely-held “better mousetrap” view of innovation. Ralph Waldo Emerson is the philosophical father of this position. He said that the world will “beat a path to the door” of the company that makes a better mousetrap. The “better mousetrap” view is currently deeply embedded in many approaches to product development. Consider Quality Function Deployment (QFD), which aims to generate products that better meet the “voice of the customer.” The customer might be talking, but that doesn’t mean that they’ll be switching from their old purchases.
Instead, innovation success comes to those companies that provide new solutions to their customers at a time when something is forcing the customer to change the way they are working. Sometimes these forces come from new regulations, sometimes from new technologies or competitors. But they require pragmatic customers to cross the chasm, increasing sales of the innovative product.
More Information:
3. In 1871, Ralph Waldo Emerson said: “If a man can write a better book, preach a better sermon, or make a better mousetrap than his neighbor, though he build his house in the woods, the world will make a beaten path to his door.” http://www.bartleby.com/73/1780.html |
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