Geoffrey A.Moore is an author, speaker, and advisor who splits his consulting time between start-up Because of its popularity, this inn
Marketing & selling disruptive products to companies in the Mohr Davidow and Wildcat Venture Partners portfolios and established high-tech adoption lifecycle has been cited an
many marketers as a way to capture
mainstream customers enterprises, most recently including Salesforce, Microsoft, Autodesk, F5Networks, Gainsight, Google,
share for high-tech products. How
and Splunk.
- A Book by Geoffrey A.Moore author argued that reality is usually
Graphic Summarization by Tu Bui - Conversion.vn Moore?s life?s work has focused on the market dynamics surrounding disruptive innovations. His first difficult and the transition betwee
book, Crossing the Chasm, focuses on the challenges start-up companies face transitioning from early customer segment is usually not a
adopting to mainstream customers. It has sold more than a million copies, and its third edition has process. The strategies apply for th
been revised such that the majority of its examples and case studies reference companies come to won't work on another. There are cra
the segments and if businesses
prominence from the past decade. Also known as well-maneuvered, they will be usually
biggest crack of all, which is referred
Learning from High-tech CHASM.
Industry
Companies need to learn how to First, there is a mountain Innovation Adoption Lif
handle disruptive change.
High-tech industries happen to Then there is no mountain by Everett M. "Ev" Roger
have substantial experience 2004) which is also rega
managing disruptive change, and Then there is. High-tech Marketing M
companies from other industries
can benefit from this experience. ~ Zen proverb
Innovation
Within these broad categories, there is a spectrum
of innovation, some requiring significant adaptation
How to cope with on our part, some not requiring much of us and
some falling between the extremes
disruptive changes
Disruptive / Sustaining /
Discontinuous Continuous
Innovation entails
Innovation gets us to
steady improvements
change our behavior or
and but don?t make us
the way we use products
change our behavior
Normal to 3D TV HD to UHD TV
INNOVATORS EARLY EARLY MAJORITY LATE MAJORITY LAGGA
seek out novel technology; ADOPTERS are practical minded wait for something to are those cons
it?s like a hobby for them. are quick to understand consumers. If a product become well established. for persona
There aren?t many the benefits of new seems useful, this group They don?t feel confident in economic reas
Innovators, and because technology. Unlike the will try it. The Early their ability to deal with looking to b
they?ll try new things, they Innovators, they don?t love Majority are cautious of technology and often buy techno
Gasoline to electric car Newer car model
are important. As other technology for its own fads. from big companies
people see them use new sake. This group relies on
things, they would feel its own intuition and vision
braver themselves about to make buying decisions.
trying them as well.
Feature phone to
VHS to DVD
smartphone
5W1H
What Happened?
What the company staff interpreted as a ramp in sales leading smoothly ?up the curve? was in fact an initial blip? what we
Mapping it out will be calling early market? and not the first indications of an emerging mainstream market. The company failed because
its managers were unable to recognize that there is something fundamentally different between a sale to an early adopter
and a sale to the early majority, even when the company name on the check reads the same.
First Principles
Before starting, the author want to establish Target Customer Characterization Scence or situation: focus on the m
some ground rules. In this case, an actionable Economic buyer: the client who situation. What is the user about to att
Many people often focus on target market or target
working definition of the word marketing. ultimately pays for the product Desire outcome: what is the user try
segment instead on a target customer. Market as
Actionable means a reasonable basis for taking End user: the one who will use the accomplish? Why is it important?
categories are impersonal and abstract, we need
actions that will predictably and positively affect product something with more clues about how to proceed in
company revenue. Technical buyer: the party who will presence of real people with complex motives. Target generate archetypes
Therefore, marketing definition in this book integrate / install the product customer characterization is the process for making up
means taking actions to create, grow, maintain or
archetypes. The idea is to create as many archetypes
defend market. Marketing's purpose is to Depends on the products, these as possible, one for each type of customers and
develope and shape something that is real, and roles can merge into one or two. For application for the product. As these start to
not as some people want to believe, to create example, if end user is children then accumulate, they begin to start to resemble each other
illusions. the economic buyer would be the and you have the same formulas with minor tweaks, Old way
parent. If end user is married adult and in fact, you have outlined 8 to 10 alternatives. Innov
then the economic buyer maybe their Once we have a list of possible target customer profiles
Market definition other spouse and technical buyer is we can then, apply a set of techniques to reduce these
also the user. "data" into a prioritized list of desirable target market Attempted approach: without New approac
segment opportunities. the new product, how does the product, how d
user go about the task? about t
High Tech Market
It is also very important to define clearly what is Informed Intuition
"market" in high tech: Analytical and rational means are usually used Enabling fac
- A set of actual or potential customers extensively for both preparation and in review of central Interfering factors: what goes
about the new
- For a given set of products or services moment but when the moment is here, the actual wrong? How and why does it go
allows the use
- Who have a common set of needs or wants decisions are made intuitively. Unlike numberical wrong?
and be p
- Who can reference each other when making analysis which relies on processing a statistically Based on
a purchase or buying decision significant sample of data in order to gain a certain
level of confidence, Informed intuition involves Economic consequences:
Economic re
The last part is something that many people do conclusions based on isolating a few high quality what is the impact of the user
the costs avo
not understand clearly. Example: if I sell an images - archetypes of a broader and more complex failing to accomplish the task
gai
oscilloscope to a doctor in Boston and another reality. These can also be called characterization - productively.
same products with the same purpose to a represents characteristic market behaviors.
doctor in Zaire and they have no reasonable
TARGET THE POINT OF ATTACK
basis for contacting each other then it is 2
different markets. Similarly, if I sell an
oscilloscope to a doctor in Boston and go next
door and sell the same thing to an engineer for
sonar device then it is also 2 different markets. What you should do Trying to cross the chasm
So in this case, there is no oscilloscope market
High Risk, Low Data Decision
but it would be better classified as category. An
approach for this would be to break down Crossing the chasm is high risk and because our
without taking a niche market
category into different market segments (doctors
& engineers).
product is disruptive with a niche market so there is
almost always a low data situation.
approach is like trying to light
Mistake a fire without kindling
Why segmentation?
MARKET DEVELOPMENT CHECKLIST
Biggest mistake one can make during this Factor Importance Factor Description Showstopper / Challenge
Market Segmentation
Segmentation is insisted by many marketing situation is turn to numberic information as
source of refuge or reassurance. Statistics, Is there a single, identifiable economic If not, sale forces waste valuable time
professionals because they know that no
even when published by prestigious firms, are buyer for this offer, readily accessible to the evangelizing groups of people trying to
meaningful marketing program can be carried out
like sausages, the more you know how it is Target Customer sales channel we intend to use and generate a sponsor. Sales cycle drag on
on a set of customers who do not reference each sufficiently well-funded to pay the price for forever and project can be shut down at
other. There is simply not enough ad dollars for made, the less apetite you have for it. All of
these included many assumption from different Primary - all the whole product? any moment.
the companies to pay for every marketing contact scenarios are to
made. Marketing usually have to rely on some market analysts, even though experienced, still
be rated against Are the economic consequences sufficient If pragmatists can live with the problem for
on-going chain reaction effects which is usually biased. Each assumption can massively affect
these 4 factors. to make any reasonable economic buyer another year, they will. But they will want to
known as word of mouth. The more your projection.
Compelling Reason to Buy Low score in any anxious to fix the problem? Are the pains learn more. Your salespeople will be invited
self-referencing the market and the more tightly of these factors big enough for the pragmatists to make the back and again but without any purchase
bound its communication channels, the greater eliminate the decision? order.
opportunities for such effects. scenario from Can our company with the help of partners
future & allies field a complete solution to the The time is limited and we need to cross
And Yes, Size Matters consideration as
The opportunity should be big enough to target customer's compelling reason to buy now, we need a problem we can solve, any
Whole Product beachhead
matter to you, but small enough that they?re within the next 3 months so that we can be thread left hanging could be the one that
segment. Nice in the market in the next 6 months and trips us up.
being ignored by larger competitors. market maybe nice capture the market in 12 months?
to purchase after
If you find the target segment too big, chasm crossing. If some other company already got there
Is being sales-driven bad? sub-segment it. The best is based special Has this problem already been addressed
before you, all the market dynamics that
interest groups within the general community. If by another company such that they have
Competition you are seeking to make work in your favor
not, geography can be a safe sub-segment as crossed the chasm ahead of us and
are already working in its favor. Don't go
well. occupied the space we would be targeting?
there.
If the target segment is too small to generate Do we have a sales funnel in place that
If not, usually the company hire a
half of next year's sales for the new product, can call on the target customer and fulfill
Distribution well-connected individual in the target
MARKET &
SEGMENTS INNOVATOR EARLY ADOPTERS EARLY MAJORITY LATE MAJORITY LAGGARDS
"TECHIES" "VISIONARIES" "PRAGMATISTS" "CONSERVATIVES" "SKEPTICS"
They could be classified as conservative
Early Adopters are visionaries. They are when it comes to change.
They are nerds who like technology for Skeptics have been burned by past
us on the moment highly motivated and have the insight to The Early Majority folks are pragmatists.
its own sake. They often overlook promises of what new technology can do
match an emerging technology to a They?re risk averse; they don?t want beta This group doesn?t like disruptive
about to attempt?
the user trying to
WHO ARE THEY technical issues, bugs of the new
technology in order to be on the cutting
strategic opportunity. They are dreamers anything. They prefer products have innovation. They are believers in
(but failed). They feel disappointed and
they hold onto these failed promises like
it important? and the dream is usually a business been proven in their market. tradition, not progress. If their technology
edge. old grudges.
goal, not a technology one. works for them they see no reason to
change it.
They care about the company they are Although they resist new technology, the
They demand honesty because you
They are looking for breakthrough buying from, the quality of the product Late Majority will adapt eventually, in
cannot fool them in term of technical
technology?? ?game changers?? ?and they are buying, the infrastructure of order to keep in step with the rest of the
knowledge. They want highly competent
they are willing to pay for that technology. supporting products and system world. What they want is usually how The Laggards are skeptical about new
WHAT THEY WANT tech support so that they can feedback
and ask meaningful questions. They
They have high expectations and they interfaces, and the reliability of the new technology can add value to their technology and go so far as to block it.
Innovation want to be the first to get the new
get disappointed easily. service they are going to get. Their goal current infrastructure without changing
is usually incremental gains for their it.
product and they want it cheap.
business, not to disrupt.
ew approach: with the new Late Majority consist of about one-third
duct, how does the user go There is a tendency to try to neutralize
of potential customers for technology.
about the task? their pull, but we actually could benefit
Innovators are a useful market group, These customers tend to be the ones The real money is to be made, naturally Tech companies aren?t generally
WHY ARE THEY because they?ll give you early feedbacks who see the possibilities in new enough, by selling to the Majority. sympathetic to these consumers, and
from paying attention to them. By
listening to them, however, we gain some
and can ignite enthusiasm and attention products, and so marketing should start Pragmatists are hard to win over, but consequently, their market potential is
nabling factors: what is it IMPORTANT for your product. with them. once you?ve done so, they?re loyal. often neglected. But there is a great deal
credibility with everyone. We should
always be careful about what we
bout the new approach that
of benefit to be gained by understanding
ows the user to get unstuck promise.
the Late Majority.
and be productive.
Your product should have clear business They are usually at the end of the
application if you want to approach the purchase cycle and not profitable unless
You can and should approach them even They are the group that you should
visionaries. This is an important you have a thoroughly whole product to a
when your product is in beta or testing. attempt to approach when you have a
customer group that you must secure by target end user market's needs and
WHEN TO They can provide you feedbacks to
improve it better. Because visionaries
delivering on your promises. The
good portfolio and reputation in their
industry. The product that you bring to
developed a low overhead distribution
They are the lost market share that haunt
tech companies for their previous failures
reputation and quality of service that you channel to get this package to them
APPROACH THEM look up to techies so this group is your
ticket to cross into the next customer
provide in this market would be the keys
them should be a whole product that can
solve all or majority of the customer pain
effectively. In this context, "as-a-service"
on delivering the promises
to launch you across the chasm and over the web creates a magnificent
group. points.
penetrate the first mainstream market opportunity to make progress with
group, the pragmatists. conservatives.
e Visionaries Pragmatists
Elaborate
Back into the Chasm
Visionaries often see themselves as
smarter than their peers in competive
Pragmatists greatly value the experience
companies. They want to leverage the
of their colleagues in other companies.
latest technology to gain competitive
When they buy they expect extensive
Respect advantage and thus do not expect
references, and they want good number
industry reference. It would actually turn
to come from companies in their own
In-market Affinities them off if such reference base exist
industry segment.
In some cases the basic affinities of the market keep groups relatively because that indicates that they are too
closer to each other. For example, visionaries keep in touch and respect late for this technology already.
the view of techies because they need the latter to serve as a reality Visionaries take a greater interest in They tend to invest convention in industry
check on technical feasibility of their vision and to help evaluate specific technology than in their industry. They specific forum, discussing
products. As a result, techies can speak to at least some of the Interest understand and appreciate what high tech industry-specific issues. Sweeping
visionaries' concern. companies and high tech products are changes and global advantages may take
trying to do. for fine speeches, but not much else.
e Similarly, conservatives look to pragmatists to help lead them in
technology purchases. Both groups see themselves as members of a Visionaries fail to acknowledge the
Pragmatists expect all these things.
specific industry first, business people second and purchaser of importance of existing product
When they see visionaries forging their
technology third. Pragmatists have more confidence in technology as a infrastructure. They are building system
Infrastructure from the ground up, set new standards.
own path with little or no thought of
potential benefit and in their bility to make sound technology purchases. connecting with the mainstream practices
Conservatives are more nervous about both. They are willing to go They expect no support groups, no third
in their industry, they shudder.
along, up to a point, with pragmatists they respect but still unnerved by party, no procedures available.
pragmatists overall self-confidence. So the reference has partial value in
s Visionaries have little self-awareness Pragmatists see visionaries as people
transitioning between adoption segments.
about the impact of their disruptiveness. who come in and soak up all the budget
Successful or not visionaries do not plan with their pet projects. Pragmatists are
Disruptiveness to stay long, they are fastrack in the very cautionous about grandiose
corporate ladders and crossing schemes because they know they will
corporations. have to live with the results.
Oracle
This is the game Oracle has played masterfully
Dynamics of Early Market Dynamics of Mainstream Market in the first decade of 21st century. After several
market requires a breakthrough technology product with a new The pragmatists drive the development of the mainstream market. Winning their support is not decades of relying on organic R&D to build out it
elling application, a technology enthusiast who can evaluate only the point of entry but also the key to long-term dominance. But even so, you cannot take Example of market leader portfolio of enterprise IT software. Oracle
eciate the superiority of the product over current alternatives the market for granted. At this point, it is no longer necessary to be the technology leader, nor it changed their game by acquiring PeopleSoft,
onary who can see the order-of-magnitude improvement by is necessary to have the best product. But the product has to be good enough and should a Seibel, BEA, Agile and Sun Microsystems for a
implementing the new application. competitor make a major breakthrough, you have to at least make a catch-up response. complete enterprise software and hardware
solution. These acquisitions are desgined to
conserve rather than innovate.
Transition
To build loyalty The key to making a smooth transition from
pragmatists to the conservative market segments is
well. there.
If the target segment is too small to generate Do we have a sales funnel in place that
If not, usually the company hire a
half of next year's sales for the new product, can call on the target customer and fulfill
Distribution well-connected individual in the target
then you have to augment it. If there is no the whole product requirements put on
Sales-driven vs Market-driven market and lead the sales team.
appropriate super-segment, then go back and distribution?
The consequences of being sales-driven during pick up another target.
the chasm period are fatal. The main focus for Do we already have relationships begun
Without this it is usually a major challenge
any company in the chasm should be to secure a Secondary - the with other companies needed to fulfill the
Partners & Allies for the whole product manager to pull
beachhead in mainstream market - that is a set remaining factors whole product? If you do, it is typically from
together a working partnership.
of pragmatist customers who are referenceable. are "nice to have", a single early-market project.
In order to do this we need to ensure our first set low score can
Is the price of the whole product consistent
of customers completely satisfy their buying usually be
with the target customer's budget and with
objectives. compensated or
the value gained by fixing the problem? Do If pricing strategy is not right, it will weaken
Pricing overcome with
all the partners and distribution channel get the compelling reason to buy.
time and
compensated sufficiently to keep their
investment.
attention and loyalty?
However, these 2
are usually what At first, the typical answer is not very. But
you do not have. Is the company credible as a provider of the resistance can be quickly overcome if
Positioning
products and services to the target niche? only one truly commits to the whole product
that can fix the target customer problem.
More information:
esentation
upt i v e cor e
hat got you t o What is Enterprise Content Management (ECM)
What is Salesforce What is virtualization?
Transition
To build loyalty The key to making a smooth transition from
pragmatists 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
The Bad Cases adding value to the old infrastructure. It is a
chnology balancing act to say the least, but properly
ct while There are several cases where the early market does
managed, the earnings potential in loyal mature
aries then not even get a proper start:
market segment is very high indeed.
ice about
hese
s with what
gnized as
nthusiasts Where things go wrong Service is important
visionaries
project but
Functionality-oriented vs
preneurial Service-oriented
ation and We can see that the first group - techies are extreme
ded to. functionality-oriented while conservatives are
extreme service-oriented. One's level of involvement
od case and competence with a high tech product is a prime
or another indicator of when one will enter the Technology
ll around. Case 1 Case 2 Case 3 Adoption Life Cycle. The longer your product is on
the market, the more mature it becomes, and the
more important the service element is to the
customer.
e back expectation several times. Winning at Reevaluating what we have. If it is not a Shut down marketing efforts, admit its mistakes
keting more than not by being in the biggest breakthrough then it never going to create an to its investors, focus all energies into turning
h in the pond. Find a suitable pond (market) early market but maybe it would serve as an pilot projects into something useful, first as a
the right fit for our current size. The market supplementary product on an existing deliverable to customer and ultimately in terms of
st be self-referencing so that when we take mainstream market. If that is the case then we a marketable product.
leadership position with some of them, they should surbodinate ourselves to another
help get the word out, fast. When we capture mainstream market company so that they can
market, we move to the next adjacent one. put our product in play through it existing
channels.
But if it is a breakthrough product but we are Example
stalled in getting the early market moving, we
have to make sure that the product is compelling
at least to one of the visionary who already
known us and commiting to that visionary in
exchange for his or her support to remove Example: Brickstream
obstacles in getting the product adopted. Brickstream was founded with vision to use AI
technology to extract information from video,
promised to gave brick-and-mortar retailers
same kind of visibility that e-retailers were
getting from their website tracking. Their first
systems were successful but implementation
proved to be costly and performance fell short.
Under new management, the team turn around
drastically. It first act was focus on something
much simpler problem, counting the people that
coming to store everyday and do it better, faster
and cheaper than current technology. This was
nothing like what they promised before but it was
real and was profitable. From there, they
eventually developed camera technology that
would support their original vision. They expand
into queue managment, personnel time tracking,
inventory protection, security. They lost their
original window but with the new trends in Brickstream high volume counting
ecommerce and retail, a 2nd window is coming
for them.
whole product are tech enthusiasts. They like
to cobbling together bits and pieces of the The latter is the marketing promise made to win the sale. The contract Surround your di sr upt i v
technology and figure out the whole product does not require the company to deliver on this promise but the customer
that pleases them.This is the pleasure they
take from technology. Visionaries, however,
relationship does. Failure to deliver on this promise in a highly reference
B2B market can have serious consequence as negative WOM can cause
pr oduct , t he t hing t hat go
take no pleasure in pulling together the
whole product by their own. But they accept
sales productivity to drop dramatically. t he dance, w it h a w h ol e p
that, if they want the advantage from the new
technology, they are going to take
Winning the whole product battle means winning the word but prentending
you are winning the whole product battle is a losing tactics as people check
t hat solves for t he t arg
responsibility for creating the whole product
under their own steam. That is it for the early
up on each other too much in high tech marketplace.
cust om er?s problem en d t
market. Into the the mainstream market, Real life example page 142 - 160.
pragmatists prefer the whole product from
the outset.
Direct Sales: the enterprise buyers making major Relationship marketing plays key role
Once sales motion is under way, the normal approach is
, system purchases expect to pay hundreds of
thousands or millions of dollars. In that context,
with thought leadership events, forums
where senior executives can learn from
called solution selling, in essence a whole product tailoring job The delivery phase of this go-to-market approach, all
Enterprise Executives they are looking for a consultative sales experts, exchange ideas with each other
to meet the specific needs of a particular prospec. In early the tailoring that was promised in the proposal has to
re Making big ticket purchasing decisions experience that identify their key needs and and connect with vendor's senior staff.
market, the prospects might not even be aware they have a
need to address. This can call for something we call
be delivered in fact. This typically requires the vendor
to field its own professional services team, focus
Salesforce, VMware,
Workday, etc.
focused on complex systems to be custom fits the vendor's offering to meet them. This is followed with personal contacts,
adopted broadly across their companies. The direct sales approach match this expectation provocation-based selling in which the vendor makes the primarily on installing the vendor's products, often
often leads to referral down into the
provocative claim that the customer should direct existing supplement by a third party system integrator.
via a top-down approach to marketing, sales and organization to explore a possibility
budget to meet an unnotice opportunity or impending crisis.
delivery. raised in an earlier conversation.
Marketing on the web is primarily Once a user clicks on a link, the state of the relationship
promotional marketing, often driven by changes to a direct response sales activity. If the offer is a
Support in this world of transactional selling is
End Users Web-based Self-Service: the end users usually
free offer or trial period which is typically digital service, freemium model works best which allows the
designed around avoiding personal contact which
Making relatively low-cost purchasing driven by click-through advertisements customers to accustom to the core product before upsell them
looking for transactional sales experience that is saves vendor money and please customers as well. Prezi, Skype, Yammer,
decisions focus on personal or which is becoming increasingly effective with advanced features and functions. If the offer consists of
primary self-service. The WWW is terrific at FAQs, emails for support queries and chat service etc.
workgroup technologies to be ad-opted as marketers leverage behavioral physical goods then the sale is typically an e-commerce
providing just that. and community-based support where knowledgeable
locally and individually. targeting, machine learning and other transaction as modeled by Amazon including shopping cart,
customers lend a helping hand to new arrivals.
algorithmic technologies to improve checkout process, shipping and handling option, email
conversion rate. confirmation & tracking notices.
The difference arises after users click on the link, they will be
Sales 2.0: the departmental buyers making IT directed to a human salesperson where they will approach Once the prospect becomes a customer,
Department Heads purchases are part of a larger enterprise, they users via email, chat or a voice call. Based on the prospect's responsibility shifts from sales to the delivery team. In
Making medium-cost purchasing Direct-touch marketing which is very
need systems that can pass muster in that level of interest, this leads to a webinar, web live demo, the world of SAAS, vendors are much more incented Rackspace, Box,
decisions for use-case-specific solutions context. Internet and the web have created a new similar to the method applied for end
download of relevant documents, etc. As the prospect to follow through on their promises because their IntApp, etc.
that will be adopted within their own users.
powerful sales channel alternative which some demonstrate increasing levels of engagement, the system customers are a click away from discontinuing their
organization. called sales 2.0. track their status and alerts salespeople to the next step in the subscriptions.
sales cycle. The entire process is conducted over the web.
Understand that this is not the purpose of The Role of the Venture-Financing The Role of the Venture-Managing
the pre-chasm organization as they are Community Community R&D Decision: From Products to Whole
driving forward by rewards of freedom in Estimate the market size, rate of penetration, cost to Until the break-even cashflow is achieved, nothing is R&D is high-tech. Everything else is secondary. As in an industrial sect
careers, chance to experience in leading achieve market leadership and anticipated market secure and your destiny is not under your control. we are technology-driven. We learn to create products, and then marke
edge technology, far more responsibility share can all be made in the light of day without This argues for early adoption of the profitability. In dominate those markets. But it starts with technology - "built a product
than any established organization. smoke and mirrors. The call to action to the fact, in slow-development market with low is our fundamental dream, the dynamic that drives all else. Problem is,
investment community is to make your client capitalization requirements, there is a strong case The products and the markets and the company that we created all gr
companies incorporate crossing the chasm into their for adopting profitability from day one. Early and legitimate demand on us, and we have no choice but to serve th
business plans. Demand to see not only broad, long visionaries will pay consulting fees and prepay
How it impacts R&D doesn't get to focus on the generic product anymore. It must becom
term market characterizations but also specific royalties to help fund low-capitalization start-ups. Whole product R&D is not driven by the laboratory but by the marketpla
target customers for D-day attack. Drive them to These fee is not revenue but it can help you cash creative technology but with creative market segmentation. It penetrate
refine their value propositions until they are truly flow positive right from day one, thus keep 100 process but rather habits and behaviours.
compelling and then use these to test how many percent of the equity reserve later date. It is better to
target customers there truly are. Force the adopt the discipline of profitability at the outset so Whole product R&D is an emerging discipline. It represents a converg
companies to define the whole product and then that you do not have to learn it later on. This teach tech marketing and consumer marketing where we see the tools of the
help them to build relationship with the right partners you to say "no" early and often because there isn't use in solving the problems of the former.
and allies. Again, use the results to test hypotheses any money to fund them. The enterprise is forced to
about market size. As for competitive set and focus drastically just because of resource
positioning, beware of pushing your small fishes too constrains. This radically reduces time to market
soon into big ponds. For distribution and pricing, do because people are not distracted and they
not look for standard margin until the chasm has understand that the market is paying their
been crossed. paychecks. In some cases, the profitability can be
forgo such as in manufacturing-intensive operation
or when the category is expected to develop so
rapidly that you cannot afford to grow organically as
a bit player.
Vertical media: those that not incorporate sufficient margin to reward the channel for the
specifically dedicated to a extra effort required to introduce a disruptive innovation into their
particular industry or a already established relationship with a maintream customer.
particular profession. Industry
trade shows, conferences,
meetings, publications,
professional associations, etc.
dedicated to a specific market
segment all tend to attract Customer-O
pragmatists and conservatives.
Value-based pricing: high
product price has a high u
Cost-based pricing: even
market when all the other m
ex
Target market segment manager: this position only goal is to transform a visionary customer Competition-based pricing:
relationship into a potential beachhead for entry into the mainstream vertical market that particular but their allowed price is still
customer participate in. His or her works include: players
- Understand the visionary customer business by attending the tradeshows, read books, study the From customer perspective
systems, meet people - first, just within the one account, and subsequently, in related companies. above a norm set by produc
- At the same time, take over the supervision of the visionary's project, make sure it gets broken up This is justifiable because yo
into achievable phases, supervise the introduction and roll out of the early phases, get feedback and over the market alternative a
buy-in from the end users of the system and work with the in-house staff to spin off the kind of over the p
to localized implementations that give these initial deliverables immediate value and impact.
- At the same time he will work with the whole product manager to identify which parts of the
visionary project are suitable for an on-going role in the whole product and which are not. The goal Vendor-O
se is to isolate the idiosyncratic elements and account-specific modifcations and making sure the Vendor-oriented pricing is a f
ongoing product development team is not burden with maintaining them. with cost of goods, and ex
This position is expected to do the following: capital, promised rate of risk
of - Expedite the implementation of the first installation of the system. This is to ensure the reference oth
base in the target market segment. The biggest impact of vendor
sing - During the implementation of the first installation, introduce into the account his own replacement, transactions required to creat
to a true account manager, a "settler" who will serve this client, hopefully, for many years. For example: $10 millions is
ty. - Leverage the on-going project to create one of more whole product extensions that solve some segment then with OEM
e industry-wide problem in an elegant way. distribution, that could be the
2 new temporary positions
sales model, it is properly mo
of it coming from top five.
the probably need 200 - 400 tr
an model, 20,000
s Each of these price points w
to perspective on the sales fun
out prospect to qualified lead all
be Whole product manager: this position is the transition of the role product manager to the role of
product marketing manager. volume means the process
se depend more on filling top of
op We need to understand first, a product manager is normally a member of product team responsible
for the product get created, tested and shipped on budget, on schedule and according to more relationship-oriented the
specification. It is a highly internally focused job, bridging the marketing and development bottom of the funnel. With s
organization, and requiring a high degree of technical competence and project management the funnel where process eff
experience. bigg
While a product marketing manager is always a member of marketing, is responsible for bringing
the product to the marketplace and making it accessible to the distribution channel. This includes all
the elements on crossing the chasm agenda. It is a highly externally focused job. Not all
organization separate the 2 jobs, but they should.
Now whole product manager is product-marketing-manager-to-be. The reason is because the job
itself is premature as the crossing of the chasm has not yet happened so there is no meaningful
o Whole Products
market relationshio or understanding to drive the future of product development. What we have is a
dustrial section, before anything else,
list of bug reports and product-enhancement requests that is growing with disconerting speed. If this
then markets, and then enterprise to
list is not managed properly then it will bring the development team to their knees.
lt a product and they will come" - that
Problem is, we grow past the dream.
eated all grow up to make persistent how to compensate
t to serve them. And then, the R&D
must become whole product R&D.
he marketplace. It begins not with the
Coping with Compensation
It penetrates not into the protons and For pioneer sales force, it is necessary to discriminate account penetration and account
ehaviours. management. Account management is predictable, less remarkable and long-binding achievement.
Compensation for this type should be spread out over the time. While account penetration should be
ts a convergence between the high opposite, the reward should be in bulk and immediate. It is to recognize the single key achievement
tools of the latter can be of significant - winning the account. This is an extraodinary event, one that few can accomplish and is critical to
he former. the firm's long term future. However, if this was achieved by promising more than anyone can
deliver or more than anyone really knew then it is not what we want to reward. There should be a
reality check process built-in.
For the pioneer technologists, because they created the large part of the core product and when the
product become a mainstream hit, they feel like they entitle to the major share of the gains. The fact
is, they don't and they don't deserve it, either. Because the mainstream success is a function of the
whole product, not the core product and is a very large team effort. What they entitle to is a larger
share of the early market returns because here is truly the core product that drives success.
However, as money is tight during this period, it is usually difficult to reward these people and
usually equity is the fallback but that is a compromise.
customers. VARs are typically not good at
marketing and sales so the vendors must do all
the marketing and most of the sales.
Reference:
https://medium.com/west-stringfellow/crossing-the-chasm-summary-and-review-9cfafdac9180
https://ewthoff.home.xs4all.nl/Weppage%20documents/Summary%20Crossing%20the%20Chasm.pdf
https://themarketingstudent.com/crossing-the-chasm-summary/
https://fourminutebooks.com/crossing-the-chasm-summary/
https://bizthoughts.mikelee.org/book-summary-crossing-the-chasm.html