Summary

Between early adopters and the early majority lies a chasm that kills most tech products. Innovators want evolution; the early majority wants a whole-product revolution with references from people like them. The strategy: pick a tiny beachhead niche, dominate it with a complete solution, use that install base as a reference to line up bowling pins into adjacent segments.

Key Takeaways

• Crossing the chasm: “fad” → “trend”

Notes

1: Discovering the chasm

1: High-tech marketing illusion

• Continuous ↔︎ discontinuous innovation
• Innovators, early + late majority, laggards
• ↑ target one at a time
• Haven’t crossed chasm: AI / neural networks, video conferencing (1998)
• Innovators was evolution, early majority wants revolution
• Illusion of sustained growth before chasm

2: High-tech marketing enlightenment

• Innovators are beachhead
• Needs to be exponential, cutting edge
• Let them in on the secret
• Implement their suggestions
• Find small, self-referencing market segment
• Line up “bowling pins” of small segments
• When uncertain, contract back to niche
• Four characteristics of visionaries:
  • Low respect for colleagues’ experiences
  • Interest in technology > industry
  • Failing to recognize the importance of existing product infrastructure
  • Overall disruptiveness: risk takers

2: Crossing the chasm

3: The d-day analogy

• Land and expand: identity small niche
• Can’t be sales-driven
• Whole-product solution for early pragmatist customers
• Focus: time to market leadership
• #1 priority: “establish a pragmatist install base that can be referenced”
• Strategic market segment that opens to other, larger markets
• Horizontal vs vertical marketing
• Total growth = all bowling pins, not just beachhead target market

4: Target the point of attack

• Identity market segments, do research and competitive analysis, then pick beachhead
• Informed intuition: isolate a few high-quality images to inform decision
• Target customer_ characterization_: ↑
• Description of detailed method

5: Assemble the invasion force

• Whole product marketing: expected product vs generic product (what actually ships)
• Generic → expected, augmented, potential
• Potential product: room for growth
• Viable whole product > generic product
• Forge strategic partnerships to realize whole product
• Technology, internet is inherently horizontal and whole product-based

6: Define the battle

• Create the market: create competition
• Pragmatists want established leader
• Can’t be self-serving or irrelevant
• Competitive positioning compass:
• Four domains of value in high-tech marketing: technology, product, market, company
• Product → market-centric approach
• Need to determine a 1) product, 2) market alternative to present to customers
• If no market alternative, don’t cross the chasm
• Keep it simple
• Marketing positioning: Claim, evidence, communication, feedback + adjustment
• Elevator pitch: * 2 sentence template

7: Launch the invasion

• Sales structures: direct, two-tier, one-tier retail, internet, two-tier VAR, national rollups, OEMs, systems integrators
• Channel optimization:
  • Demand creators vs fulfillers
  • Role in providing the whole product
  • Potential for high volume
• Optimized for new customer relationships
• Direct > VAR > retail
• Pricing: match market leader

Conclusion

• Expected staircase of high-tech profits
• Calculations: market size, penetration, cost to mkt leadership, anticipated mkt share
• When to take on outside capital:
  • High price of market entry
  • Expected rapid market development
• Target market segment manager:
• Market segment manager:
• Whole product manager:
• Focus groups become important