Notes from Crossing the Chasm
Saturday, May 31st, 2008I recently finished reading Geoffrey Moore’s tech marketing classic Crossing the Chasm. After finishing it, I can see why this was such a popular book when it came out in 1991. Coming from a design and ecology background devoid of marketing experience, I appreciated the easy-to-read primer for marketing disruptive technologies. Because of the stage I’m at with the ideas I’m thinking about lately, one of the most helpful sections was The Claim: Passing the Elevator Test. A few notes:
The elevator test: “Can you explain your product in the time it takes to ride up in an elevator?”
Why it’s a bad sign if you can’t pass the elevator test (pg 152-153):
- Whatever your claim is, it cannot be transmitted by word of mouth.
- Your marketing communications will be all over the map.
- Your R&D will be all over the map.
- You won’t be able to recruit partners and allies.
- You are not likely to get financing from anybody with experience.
A template for crafting an elevator pitch – you’ll need to cover the following elements:
- For (target customers – beachhead segment only)
- Who are dissatisfied with (the current market offering)
- Our product is a (new product category)
- That provides (key problem-solving capability)
- Unlike (the product alternative)
- We have assembled (key whole product features for your specific application)
Example: Silicon Graphics (slightly outdated, but you get the idea)
- For post production film engineers
- Who are dissatisfied with the limitations of traditional film editors
- Our workstation is a digital film editor
- That lets you modify film images any way you choose.
- Unlike workstations from Sun, HP, or IBM,
- We have assembled all the interfaces needed for post-production film editing
Recently, I’ve been trying to craft elevator pitches for a few ideas I’m interested in pursuing, and this template seems to be a great place to start. After reading Crossing the Chasm, I came across this useful post on VentureHacks about high concept pitches for businesses. The high concept pitch, an even shorter version of the elevator pitch, has its roots in Hollywood. The core goal:
A high concept pitch distills a startup’s vision into a single sentence
The method:
…people should already understand the building blocks of the pitch: buses, bombs, Jaws, space, the seven deadly sins, Flickr, Firefox, MMOGs, et cetera. The pitch combines the building blocks by using analogy, synthesis, juxtaposition, combination, whatever; e.g. “Jaws in space.”
More of my favorite bits of knowledge from Crossing the Chasm:
What is marketing?
“Taking actions to create, grow, maintain or defend markets.”
What are markets?
- 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
How to win?
“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 indeed.”
How to cross the chasm?
“Cross the chasm by targeting a very specific niche market where you can dominate from the outset, force your competitors out of that market niche, and then use it as a base for broader operations.”
Why do companies fail at crossing the chasm?
“… because, confronted with the immensity of opportunity represented by a mainstream market, they lose their focus, chasing every opportunity that presents itself, but finding themselves unable to deliver a salable proposition to any true pragmatist buyer.”
How to choose a beachhead?
“A vertical market with a broken mission-critical process creates an attractive beachhead opportunity… The more serious the problem, the faster the target niche will pull you out of the chasm.”
On why the PalmPilot did so well in the handheld market:
“Success through subtraction is the key lesson here. And that subtraction was made possible by a vote of confidence in design esthetics and in target marketing. By contrast, the companies who failed had over-designed for their target market because they were hedging their bets.”
High Risk, Low Data Decisions:
“You need to understand that informed intuition, rather than analytical reason, is the most trustworthy decision-making tool to use.”
On providing whole product solutions:
“Expect that the best scenarios will be ‘whole product challenged’ – if it were easy, someone else would have done it. Indeed, the fact that it is hard will create a barrier to entry in your favor once you have stepped up to the solution.”
How to pick a subsegment:
“The best sub-segmentation is based on special interest groups within the general community. These typically are very tightly networked and normally form because they have very special problems to solve.”
On positioning:
“…your market alternative helps people identify your target customer (what you have in common) and your compelling reason to buy (where you differentiate). Similarly, your product alternative helps people appreciate your technology leverage (what you have in common) and your niche commitment (where you differentiate). Thus you create the two beacons that triangulate to teach the market your positioning.”
On alternatives:
“…market alternatives call out the budget and thus the market category, and product alternatives call out the differentiation.”
On early stage sales:
- Use direct sales and support as a demand-creation channel to penetrate the initial target segment and then,
- Once the segment has become aware of your presence and leadership, transition to the most efficient fulfillment channel for your offer
Why direct sales?
“Time to establish a sustainable market position, and not cost or breadth of sales is your critical success factor. You simply cannot afford to lose one day of opportunity, and the only channel that would ever be that responsive to your needs is your own.”
