Geoffrey Moore Quotes

there is something fundamentally different between a sale to an early adopter and a sale to the early majority, even

This material focuses primarily on marketing, because that is where the leadership must come from,

pragmatists are more interested in the market’s response to a product than in the product itself. What

Chasm crossing is not the end, but rather the beginning, of mainstream market development.

the company may be saying “state-of-the-art” when the pragmatist wants to hear “industry standard.

Entering the mainstream market is an act of burglary, of breaking and entering, of deception, often even of stealth.

you get installed by the pragmatists as the leader, and from then on, they conspire to help keep you there.

The number-one corporate objective, when crossing the chasm, is to secure a distribution channel into the mainstream market, one with which the pragmatist customer will be comfortable. This objective comes before revenues, before profits, before press, even before customer satisfaction. All these other factors can be fixed later - but only if the channel is established.

When pragmatists buy, they care about the company they are buying from, the quality of the product they are buying, the infrastructure of supporting products and system interfaces, and the reliability of the service they are going to get.

One of the most important lessons about crossing the chasm is that the task ultimately requires achieving an unusual degree of company unity during the crossing period.

Big enough to matter, small enough to lead, good fit with your crown jewels. If

Positioning is the single largest influence on the buying decision.

The winning strategy does not just change as we move from stage to stage, it actually reverses the prior strategy.

Oon of us two moste bowen, doutelees; And sith a man is moore resonable Than womman is, ye moste been suffrable.

customers often bend over backward to give market share leaders second and third chances, bringing cries of anguish from their competitors who would never be granted such grace.

California is a bad influence.

Surround your disruptive core product, the thing that got you to the dance, with a whole product that solves for the target customer’s problem end to end. That will keep you on the dance floor for a long time to come. The

The only suitable reference for an early majority customer, it turns out, is another member of the early majority, but no upstanding member of the early majority will buy without first having consulted with several suitable references.

the key to getting beyond the enthusiasts and winning over a visionary is to show that the new technology enables some strategic leap forward, something never before possible, which has an intrinsic value and appeal to the nontechnologist.

definition onto market, which we will define, for the purposes of high tech, as • 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.

Oh, to be sure, there are the get-rich dreams that float in and out of idle conversation. But there are much headier rewards closer at hand - the freedom to be your own boss and chart your own course, the chance to explore the leading edge of some new technology, the career-opening opportunity to take on far more responsibility than any established organisation would ever grant. These are what really drive early market organisations to work such long hours for such modest rewards - the dream of getting rich on equity is only an excuse, something to hold on to your family and friends as a rationale for all this otherwise crazy behavior.

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. Thus, at a time of greatest peril, when the company was just entering the chasm, its leaders held high expectations rather than modest ones, and spent heavily in expansion projects rather than husbanding resources.

the less successful product is often arguably superior. Not content to slink off the stage without some revenge, this sullen and resentful crew casts about among themselves to find a scapegoat, and whom do they light upon? With unfailing consistency and unerring accuracy, all fingers point to—the vice president of marketing. It is marketing’s fault! Salesforce outmarketed RightNow, LinkedIn outmarketed Plaxo, Akamai outmarketed Internap, Rackspace outmarketed Terremark.

By contrast, the early majority want to buy a productivity improvement for existing operations. They are looking to minimize the discontinuity with the old ways. They want evolution, not revolution. They want technology to enhance, not overthrow, the established ways of doing business. And above all, they do not want to debug somebody else’s product. By the time they adopt it, they want it to work properly and to integrate appropriately with their existing technology base.

Segways are a classic example of this phenomenon. You've seen them on occasion in malls or in airports, looking something like an old-fashioned lawn mower gone vertical, ridden around by someone in a security professional's uniform. Kind of dorky looking, but don't kid yourself. The gyroscopic balance control is fabulous, and the control movements once mastered are graceful. The hope was these devices would become a universal transport mechanism. Why didn't that happen? In a word: stairs. Stairs are pesky little devils that crop up everywhere, and Segways do not handle them well at all. That's what we call a showstopper.

One of the most important lessons about crossing the chasm is that the task ultimately requires achieving an unusual degree of company unity during the crossing period. This is a time when one should forgo the quest for eccentric marketing genius in favor of achieving an informed consensus among mere mortals. It is a time not for dashing and expensive gestures but rather for careful plans and cautiously rationed resources-a time not to gamble all on some brilliant coup but rather to focus everyone on pursuing a high-probability course of action and making as few mistakes as possible.

There are, however, even more serious ramifications. High-tech innovation and marketing expertise are two cornerstones of the U.S. strategy for global competitiveness. We will never have the lowest cost of labor or raw materials, so we must continue to exploit advantages further up the value chain. If we cannot at least learn to predictably and successfully bring high-tech products to market, our countermeasures against the onslaught of commoditizing globalization will falter, placing our entire standard of living in jeopardy.

As soon as the numbers get up in a chart - or better yet, a graph - as soon as they thus become blessed with some specious authenticity, they become the drivers in high-risk, low-data situations because these people are so anxious to have data. That's when you hear them saying things like "It will be a billion-dollar market in 2016. If we only get five percent of that market..." When you hear that sort of stuff, exit gracefully, holding on to your wallet.

THE CHASM – THE DIFFUSION MODEL WHY EVERYBODY HAS AN IPOD Why is it that some ideas – including stupid ones – take hold and become trends, while others bloom briefly before withering and disappearing from the public eye? Sociologists describe the way in which a catchy idea or product becomes popular as ‘diffusion’. One of the most famous diffusion studies is an analysis by Bruce Ryan and Neal Gross of the diffusion of hybrid corn in the 1930s in Greene County, Iowa. The new type of corn was better than the old sort in every way, yet it took twenty-two years for it to become widely accepted. The diffusion researchers called the farmers who switched to the new corn as early as 1928 ‘innovators’, and the somewhat bigger group that was infected by them ‘early adaptors’. They were the opinion leaders in the communities, respected people who observed the experiments of the innovators and then joined them. They were followed at the end of the 1930s by the ‘sceptical masses’, those who would never change anything before it had been tried out by the successful farmers. But at some point even they were infected by the ‘hybrid corn virus’, and eventually transmitted it to the die-hard conservatives, the ‘stragglers’. Translated into a graph, this development takes the form of a curve typical of the progress of an epidemic. It rises, gradually at first, then reaches the critical point of any newly launched product, when many products fail. The critical point for any innovation is the transition from the early adaptors to the sceptics, for at this point there is a ‘chasm’. According to the US sociologist Morton Grodzins, if the early adaptors succeed in getting the innovation across the chasm to the sceptical masses, the epidemic cycle reaches the tipping point. From there, the curve rises sharply when the masses accept the product, and sinks again when only the stragglers remain. With technological innovations like the iPod or the iPhone, the cycle described above is very short. Interestingly, the early adaptors turn away from the product as soon as the critical masses have accepted it, in search of the next new thing. The chasm model was introduced by the American consultant and author Geoffrey Moore. First they ignore you, then they laugh at you, then they fight you, then you win. Mahatma Gandhi

To get an early market started requires an entrepreneurial company with a breakthrough technology product that enables a new and compelling application, a technology enthusiast who can evaluate and appreciate the superiority of the product over current alternatives, and a well-heeled visionary who can foresee an order-of-magnitude improvement from implementing the new application.

Indeed, a truly predatory type of investor - sometimes referred to as a vulture capitalist - looks to use the chasm period of struggle and failure as a means to discredit the current management, thereby driving down the equity value in the company, so that in the next round of funding, he or she has an opportunity to secure dominant control of the company, install a new management team, and, worst case, become the owner of the major technology asset, dirt cheap. This is an incredibly destructive exercise during which not only the baby and the bathwater but all human values and winning opportunities are thrown out the window. Nonetheless, it happens.

Because of these incompatibilities, early adopters do not make good references for the early majority. And because of the early majority’s concern not to disrupt their organizations, good references are critical to their buying decisions. So what we have here is a catch-22. The only suitable reference for an early majority customer, it turns out, is another member of the early majority, but no upstanding member of the early majority will buy without first having consulted with several suitable references.

The word risk is a negative one in their vocabulary—it does not connote opportunity or excitement but rather the chance to waste money and time.

To become a going concern, a persistent entity in the market, you need a market segment that will commit to you as its de facto standard for enabling a critical business process. To become that de facto standard, you need to win at least half, and preferably a lot more, of the new orders in the segment over the next year. That is the sort of vendor performance that causes pragmatist customers to sit up and take notice. At the same time, you will still be taking orders from other segments. So do the math.

They are the ones who first appreciate the architecture of your product and why it therefore has a competitive advantage over the current crop of products established in the marketplace. They are the ones who will spend hours trying to get products to work that, in all conscience, never should have been shipped in the first place. They will forgive ghastly documentation, horrendously slow performance, ludicrous omissions in functionality, and bizarrely obtuse methods of invoking some needed function—all in the name of moving technology forward. They

Marketing falls prey to the crack between the technology enthusiast and the visionary by failing to discover, or at least failing to articulate, the compelling application that provides the order-of-magnitude leap in benefits. A

Never the standout, they are what makes for the continuity, so that after the star either dies (tragedy) or rides off into the sunset (heroic romance, comedy), they are left to clean up and to answer the inevitable final

Visionaries are that rare breed of people who have the insight to match up an emerging technology to a strategic opportunity, the temperament to translate that insight into a high-visibility, high-risk project, and the charisma to get the rest of their organization to buy into that project. They are the early adopters of high-tech products.

The number-one corporate objective, when crossing the chasm, is to secure a distribution channel into the mainstream market, one with which the pragmatist customer will be comfortable.

when crossing the chasm, we are looking to attract customer-oriented distribution with one of our primary lures being distribution-oriented pricing. Customer-Oriented

The single most important difference between early markets and mainstream markets is that the former are willing to take responsibility for piecing together the whole product (in return for getting a jump on their competition), whereas the latter are not.

First there is a mountain, Then there is no mountain, Then there is. —Zen proverb

They will work with vendors who have little or no funding, with products that start life as little more than a diagram on a whiteboard, and with technology gurus who bear a disconcerting resemblance to Rasputin.

The competition takes place at the level of corporate agenda, not at the level of competing products. That

market alternatives call out the budget and thus the market category, and product alternatives call out the differentiation.

just

in one of the most influential business books of all time, Geoffrey Moore’s Crossing the Chasm. Moore argues that technology companies often run into problems when they try to transition from a market of early adopters to the mainstream—the proverbial “chasm.” He recommends that companies focus on niche beachhead markets, from which the company can expand outward using a “bowling pin” strategy in which these markets help to open up adjacent markets. This strategy is even more important for network effects businesses.

As members of a market, our behavior is invariable: we move as a herd, we mill and mill and mill around, and then all of a sudden we stampede.

Why me?’ cries out the unsuccessful entrepreneur. Or rather ‘Why not me?’ ‘Why not us?’ chorus his equally unsuccessful investors. ‘Look at our product. Is it not as good--nay, better--than the product that beat us out?’.... In fact, feature for feature, the less successful product is often arguably superior.

Most companies fail to cross 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.

Now if we map the three horizons onto the Growth/Materiality Matrix, we can see how they intersect with portfolio management (see Figure 2.5).

What the company staff interpreted as a ramp in sales leading smoothly “up the curve” was in fact an initial blip—what we will be calling the early market—and not the first indications of an emerging mainstream market.

In Geoffrey Moore’s Crossing the Chasm, product positioning includes the following insights: knowing who your customers are and their needs; the name of your product and its product type or category; what the key benefit of the product is to your customer (the compelling reason to buy); the “state of being” without your product; and how your product differs or “changes the game.” Your

Harvard economist Theodore Levitt was the first authority to write about what he called the total product.2 A total product has four dimensions that marketers, executives, and support people need to understand if they want customers to appreciate the value of what they are selling:   1.Generic What your product is — software, a suitcase, etc. 2.Expected The essential features and benefits the product must provide, e.g., a refrigerator has to cool food. 3.Value-Added Features and benefits that exceed customer expectations. 4.Potential Future enhancements to value based on what customers want. Levitt’s thinking was daring but limited because it focused on features and benefits but not the overall customer experience. Then in 1999, Geoffrey A. Moore took Levitt’s ideas to the next logical level with his book, Crossing the Chasm. According to Moore, the way to create a “whole” product is to think through both your customer’s problems and solutions. It’s not enough to address the core product — you have to think about everything needed to get your customer from consideration to an imperative to buy. This can be everything from the installation of the product to training to procedural standards to integrations, whether they are provided by your company or achieved using partners.3 “The product is the complete experience and the relationship you and the customer share.” Moore moved beyond features and benefits — bigger iPhones with higher camera resolution — to something else: Being the solution to customers’ problems. Doing that requires more than visionary engineers and brilliant designers. It means getting to know your customers, learning what they care about, and learning to care about them. That’s why Moore is the grandfather of the CPE.

PIVOTE DE PLATAFORMA Un pivote de plataforma se refiere a un cambio de aplicación en una plataforma o viceversa. Habitualmente, las startups que aspiran a crear una nueva plataforma empiezan vendiendo una única aplicación, la llamada aplicación killer, para su plataforma. Más adelante la plataforma emerge como vehículo para terceros, como forma de crear sus propios productos relacionados. Sin embargo, este orden no siempre está claro y a veces las empresas necesitan ejecutar este pivote varias veces. PIVOTE DE ARQUITECTURA DEL NEGOCIO Este pivote toma un concepto de Geoffrey Moore, quien observó que las empresas suelen seguir una de estas dos arquitecturas de negocio mayoritarias: alto margen y bajo volumen (modelo de sistema complejo) o bajo margen y alto volumen (modelo de volumen de operaciones).[41] El primero habitualmente se asocia con los negocios para negocios (B2B) o ciclos de ventas a empresas, y el segundo con los productos para los consumidores en general (aunque hay notables excepciones). En un pivote de arquitectura del negocio, la empresa cambia de arquitectura. Algunas empresas cambian de alto margen y bajo volumen pasándose al mercado de masas (por ejemplo, el dispositivo de búsqueda de Google); otros, originariamente diseñados para el mercado de masas, se transforman y pasan a un modelo que requiere ciclos de ventas largos y costosos.

You simply cannot spend your way into the hearts and minds of technology enthusiasts and visionaries.

Why is it so important to attack your competitors during a tornado instead of serve your customers? Why, specifically, was Larry Ellison once quoted as saying, citing Genghis Khan, “It is not enough that we win—all others must lose”?

In each case, these segments were stuck with serious business problems that had to be solved immediately but could not be addressed effectively without embracing a discontinuous innovation. Managers who are under this kind of “broken-process” pressure will sponsor a new technology ahead of the herd, but only if the system provider can commit to an end-to-end solution to their problem. That is, to win over their target segments, each of these product vendors has to commit not just to providing an excellent product, but also to fielding a complete suite of products and services to solve the entire problem for the target segment. This leads them to recruit other companies that have the necessary competencies they lack, thereby forging a whole new value chain where none existed before. Once such a team is formed and the market has rallied around its solution, all other vendors get summarily excluded from the segment (pragmatists like to standardize on a single solution once they find one that works); so these first movers get to enjoy the fruits of market leadership for a long time to come.

As companies move toward distributed systems, Sybase and competing vendors—such as The ASK Group Inc., Informix Software Inc., and Oracle Corp.—are all offering products similar to System 10 . . . . Here we are in the “safe as milk” category, somewhat ironic in light of subsequent revelations about the limitations of Server 10. The innovations presented here are all continuous—performance, functionality, and capacity—and a number of other mainstream vendors are “all offering products similar” to it. Note the emphasis on company and market issues as opposed to product and technology. All of this speaks to mainstream positioning, either tornado or post-tornado. Since there is not a lot of emphasis on cutthroat competition, which one always expects with tornado products, the conclusion one would draw here is that Sybase 10 is on Main Street. Additional Indicators Beyond press coverage, a second source of clues to market status comes from the behavior of other companies in the infrastructure. Lew Platt at HP, for example, realized that their commercial Unix server business was in the tornado when software vendors were calling him rather than the other way around. Going further, when a tornado is under way, the easiest way to spot the gorilla is to look for the

The downside of any established market is the friction created when new ways of doing things challenge the comforting traditions that may stretch back for decades. Older, more conservative professionals in any field may fear that an upstart technology will threaten their job security and livelihoods. But more forward‐looking (and often younger) professionals get excited by breakthrough innovation and can't wait to try it out. That's what drives the distinction between early adopters and late adopters, explained so brilliantly in Geoffrey Moore's landmark book, Crossing the Chasm. If you try to sell to both groups the same way, you are very likely to fail.

The formative stage is treacherous and the subject of much study and analysis by management experts. Notably, as previously mentioned, consultant Geoffrey Moore coined the term “crossing the chasm” back in 1991 to describe the unique challenges and activities associated with this phase of a start‐up's evolution. Lots of companies make it far enough to attract some early adopters, and they have enough funding to pursue a much bigger market. But then they fall into the chasm between appealing to a narrow niche audience and building a large and sustainable customer base.

Make something 10 people completely love, not something most people think is pretty good.

The key point is that, in contrast with the technology enthusiast, a visionary focuses on value not from a system’s technology per se but rather from the strategic leap forward such technology can enable.

When pragmatists buy, they care about the company they are buying from, the quality of the product they are buying, the infrastructure of supporting products and system interfaces, and the reliability of the service they are going to get. In other words, they are planning on living with this decision personally for a long time to come.

Pioneers are people with arrows in their backs”),

The List: Good Strategy, Bad Strategy by Richard Rumelt Why: Especially because it will show you how to identify bad strategy The Five Dysnfunctions of a Team by Patrick Lencioni Why: Learn most recognised tendencies of dysfunctional teams (in a storified format) Storyworthy by Matthew Dicks Why: Why storytelling matters in everything we do and how to tell a solid story Never Split the Difference by Christopher Voss Why: Learn the fundamentals of having a competitive edge in any discussion Understanding Michael Porter by Joan Magretta Why: The absolute fundamentals of organisational success - big or small Crossing the Chasm by Geoffrey Moore Why: If you are curious about what it takes to continue growing and scaling a technology company throughout its lifecycle 7 Powers by Hamilton Helmer Why: You can read it once every year. You can pick any failed venture/product and do a post-mortem of why it failed through the lens of this book (learning the value of building and sustaining moats) Build by Tony Fadell Why: This book can be a great friend as you navigate every fork/decision in your career Super Thinking by Gabriel Weinberg and Lauren McCann Why: You can pick your pet mental models from this book and apply in any situation in your life; the pet mental models can keep evolving as you evolve

Unfortunately, however, pragmatist customers rarely adopt any new technology en masse. Usually these innovations are taken up first by a single niche, one that has such pressing problems it goes ahead of the herd. The rest of the herd is delighted by this eventuality because it gets a free look at how well the technology plays out without having to take any immediate risk. The niche wins—presuming the beachhead strategy is conducted correctly—by getting a state-of-the-art fix for its heretofore unsolvable problem. And the vendor wins because it gets certified by at least one segment of pragmatists that its offering is legitimately mainstream.

We do not have, nor are we willing to adopt, any discipline that would ever require us to stop pursuing any sale at any time for any reason. We are, in other words, not a market- driven company; we are a sales-driven company.

Technologies from a prior era, once the focal point of innovation, now become the scaffolding upon which next-generation innovation will build.

Ultimately the service that skeptics provide to high-tech marketers is to point continually to the discrepancies between the sales claims and the delivered product. These discrepancies, in turn, create opportunities for the customer to fail, and such failures, through word of mouth, will ultimately come back to haunt us as lost market share.

Dinks (Double Income, No Kids), or Henrys (High Earners, Not Rich Yet).

There are two keys to this entire sequence. The first is knocking over the head pin, taking the beachhead, crossing the chasm (and chaining together three mixed metaphors to do it!). The size of the first pin is not the issue, but the economic value of the problem it fixes is. The more serious the problem, the faster the target niche will pull you out of the chasm. Once out, your opportunities to expand into other niches are immensely increased because now, having one set of pragmatist customers solidly behind you, you are much less risky for others to back as a new vendor. The

It turns out, to disrupt someone else’s business, you have to add a net new line of business to your own portfolio. This

Adding a new line of business to an existing portfolio creates a crisis of prioritization. Such

Now these types of efforts—focus groups and packaging studies—are traditionally located in the marketing department. But in high tech, marketing is too ignorant to drive the bus. What appears to the generalist to be a simple change may in fact cut across some fundamental technology boundary in a radically inappropriate way. Or conversely, what looks impossible to achieve may in fact be a by-product of a minor adjustment. In either case, engineering must be a direct partner in the effort, or it is wasted. It’s not market research alone, nor is it just product development. It’s whole product R&D, and it implies a new kind of cooperation between organizations traditionally set apart from each other.

the real news is the deep and dividing chasm that separates the early adopters from the early majority. This is by far the most formidable and unforgiving transition in the Technology Adoption Life Cycle, and it is all the more dangerous because it typically goes unrecognized.

but you had better realize you are adding apples and oranges (that is, doctor sales + engineer sales) to get your final totals, and in so doing, you are leaving yourself open to misinterpreting the data badly. Most important, market, when it is defined in this sense, ceases to be a single, isolable object of action—it no longer refers to any single entity that can be acted on—and cannot, therefore, be the focus of marketing.

existing ones. At the same time, it needs to separate its revenue performance activities from its enabling investments, focusing the former on delivering results based on what the latter have helped to seed and till. As the following diagram indicates, these two divisions result in four zones of management activity, each aligned with one, and only one, investment horizon, each demanding a different style of leadership to achieve those ends.

Marketing professionals insist on market segmentation because they know no meaningful marketing program can be implemented across a set of customers who do not reference each other. The reason for this is simply leverage. No company can afford to pay for every marketing contact made. Every program must rely on some ongoing chain-reaction effects—what is usually called word of mouth. The more self-referencing the market and the more tightly bounded its communications channels, the greater the opportunity for such effects. So much for first principles.

Compelling reason to buy • Whole product • Partners and allies • Distribution • Pricing • Competition • Positioning • Next target customer

The market-development problem in the case of both neural networking software and desktop video conferencing is this: With each of these exciting, functional technologies it has been possible to establish a working system and to get innovators to adopt it. But it has not as yet been possible to carry that success over to the early adopters. As we shall see in the next chapter, the key to winning over this segment is to show that the new technology enables some strategic leap forward, something never before possible, which has an intrinsic value and appeal to the nontechnologist. This benefit is typically symbolized by a single, compelling application, the one thing that best captures the power and value of the new product. If the marketing effort is unable to find that compelling application, then market development stalls with the innovators, and the future of the product falls through the crack.

It turns out our attitude toward technology adoption becomes significant—at least in a marketing sense—any time we are introduced to products that require us to change our current mode of behavior or to modify other products and services we rely on. In academic terms, such change-sensitive products are called discontinuous innovations. The contrasting term, continuous innovations, refers to the normal upgrading of products that does not require us to change behavior.

Indeed, a truly predatory type of investor—sometimes referred to as a vulture capitalist—looks to use the chasm period of struggle and failure as a means to discredit the current management, thereby driving down the equity value in the company, so that in the next round of funding, he or she has an opportunity to secure dominant control of the company, install a new management team, and, worst case, become the owner of a major technology asset, dirt cheap. This is an incredibly destructive exercise during which not only the baby and the bathwater but all human values and winning opportunities are thrown out the window. Nonetheless, it happens.