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recrossing the chasm

Sunday,  12/14/08  08:15 PM

You might remember Shirley gave me a Kindle as an early birthday present right before I left for Brazil… so I bought a number of books to take with me, and one was Geoffrey Moore’s classic Crossing the Chasm.   I’ve been rereading it with delight.   Despite being written in 1991, it still hits about ten nails on the head at once.   I’ve always liked this book and talked about it, but I’d forgotten how cleanly Moore presents his thesis, and what a compelling case he makes.   It is one of the best business books I’ve ever read because not only does it identify and explain a problem, it presents the solution.

I first read Crossing the Chasm when we were starting Digital Insight, and everything about it seemed to apply to that business.   I can now say everything about it applies to Aperio too.   As I turned each page (metaphorically, since I was reading on the Kindle), I found myself saying “yes” repeatedly.   I encourage you to read the book – I suspect you’ll love it, as I did – but let me try to summarize the key message.

Moore observes that the adoption cycle of new technologies looks like this:

the technology adoption lifecycle

Here time is the X axis, moving right as the technology is adopted, and volume is the Y axis.   As a technology is adopted different kinds of customers buy it, and Moore observes that the reason people buy in each group is different.

The Innovators who adopt first are Techies; they buy because they love the technology.   (We’ve had a few of those!)   The Early Adopters who are next are influenced by the Innovators, but they buy for a different reason; they are Visionaries and they buy because they want to cause change, and they want to use the new technology to do so.   Further along you encounter the Early Majority, these people are Pragmatists who buy because the technology solves a problem they have, or improves their business in some way.   Crucially, the Early Majority are not influenced by the Visionaries.   This is what creates the chasm.   It is very difficult for a technology to move from the Early Adopters to the Early Majority.   And relating this to Aperio, this is exactly where digital pathology finds itself today.

If you make it across the chasm to the Early Majority you’re in good shape, because the Late Majority use the Early Majority as references; there isn’t much of gap there.

In thinking about Aperio, to this point we’ve done all the right things to attract the Early Adopters / Visionaries, and they have adopted.   We’re poised at the brink of the chasm.   But now we have to do other things to attract the Early Majority / Pragmatists.   Some of these things we are doing already, like establishing proof points and documenting ROI.   Moore lays emphasis on the importance of references within the same group; using a Visionary as a reference for a Pragmatist won’t work, because they have different goals.   One of the things he mentions which rings true for us is that there can be different kinds of adopters within the same organization.  They have to be sold differently, they have different goals, and will respond to different value propositions.

The book notes the following reasons why Pragmatists don’t reference Visionaries:

  • lack of respect for colleagues experiences
  • taking greater interest in technology than in their industry
  • failing to recognize the importance of existing product infrastructure
  • overall disruptiveness

Thinking about our current customers, many of them fall into this category!

Moore defines a market in a useful, specific way:

  • 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

The fourth point is crucial; just because two people want to buy a digital pathology system, [according to Moore] they are not in the same market if they don’t reference each other.   Early Adopters are not in the same market as the Early Majority!

Given all this, what do you do to cross the chasm?

  • Choose a single market entry point, a beachhead, to use as a springboard across the chasm into adjacent extended markets.
  • Focus on applications rather than platforms.   “Disruptive innovations are more likely to be championed by end users than by the technology professionals that operate the infrastructure, and applications are what an end user sees.”
  • Create the whole product by thinking through your customer’s problems in its entirety.   You cannot rely on your Early Majority / Pragmatist customer to fill in the gaps they way an Early Adopter / Visionary customer would do.   The product has to work, and Installation, Training, and Support are key elements.
  • Define the battle:
  1. Focus the competition within a segment defined by your value proposition
  2. Create a competitive differentiator around your value proposition
  3. Reduce your competitive claims to your primary competitive differentiator in this segment
  4. Demonstrate the validity of your competitive claim
  • Use a direct sales force optimized for creating demand.   (“This is a very expensive way to sell… it is also the best channel for crossing the chasm.”)

The net is that we don’t appear to be doing anything badly wrong, and we have the right strategies.   I’m finding the book useful to reinforce what is important and what isn’t.   Of course any effort we expend on things that aren’t important simply reduces the resources we have for those things that are…

As I was rereading this on a Kindle, I couldn’t help but think about the Kindle itself as an example of a new technology seeking adoption.   There are certainly people who bought it because it was cool, or to learn more about it.   But that’s a pretty small market compared to “people who read books”.   For the majority of people it has to solve a specific problem – in my case, how to carry many books along with you on a trip.   In this I would be more likely to be influenced by people who read a lot than by people who buy every gadget just to try it out.   And the actual using experience is much more important than the underlying technology (the “application” for a Kindle is reading a book).   I have to admit the fact that you can’t pick up email on a Kindle is a feature, not a bug.   That’s a different application, and the Kindle doesn’t try to address it, which is better than trying and suboptimally failing.

Anyway it's been an interesting journey, re-crossing the chasm, both in the sense of working for Aperio after having worked for Digital Insight, and in the sense of re-reading the book :)

 

Sunday,  12/14/08  08:55 PM

Reginald at ChristmasStill really cold here.  I did not ride.  We decorated the house, ate cookies, and sat around.  We watched football.  We worked, a little.  And we blogged :)

Reggie helped with decorating by sitting in every available open box.  He is such a cat.  His look translates as "so what?"

[ Update: It is now raining as well as really cold.  My reindeer have not yet shorted out, so that's a good thing ]

icy coldIt might be really cold here, for here, but elsewhere it is really really cold; John Hindraker reports from Minneapolis that he's throwing another log on the fire (and goes on to analyze "global cooling"), and in Denver it reached a record -15 below zero today.  (No, Al Gore is not there giving a speech :)

Philip Greenspun has a nice analysis of extending unemployment benefits.  "An unemployed worker in Michigan needs to move somewhere with a lot of new jobs being created and not too many highly skilled unemployed people competing for those jobs. Certainly he is going to have to move to another state.  Possibly he may need to move to another country.  Handing out 52 weeks of cash instead of 26 weeks seems likely only to delay the inevitable."  This is one of those "teach a man to fish" things, isn't it?  Someone who's making a living assembling cars is in the wrong line of work, and that is never going to change.

According to CNet, E-commerce sales so far are not a disaster.  That's about the measure of today's economy, anything that's not a disaster is great news.  But it is surprising news, too; online purchases in December are matching those from a year ago.  Probably we have two competing trends, a growth in people purchasing online instead of going into stores counterbalanced by a decrease in overall purchasing.  So be it.

Related: McKinsey considers Pricing in a Downturn.  They write "getting pricing right is always a challenge in an economic downturn"; but really "getting pricing right is always a challenge", period.  Might be harder now, but it is never easy.

Upala the GorillaToday's ZooBorn is Upala the Gorilla.  Man, is he cute.

Here we have Wine64 - a 64-bit version of Wine, the popular Linux-based Windows emulator.  (I know, I know, WINE is an acronym for Wine Is Not an Emulator, but guess what it is anyway; it emulates Windows, not a processor.)  I can remember when this idea of running Windows under Linux was so novel, but now with VMWare and Parallels and so on it is pretty ho hum.  And since everything is Intel-based, it can be pretty fast, too.

I totally related to Josh Newman's Beginner’s Mind… ("...the sort of perseverance it takes to succeed seems to be a learnable skill. All you have to do is be willing to suck. And suck. And suck. And keep going.")  The thing which was like that for me was managing people.  I sucked at it so hard, and so long, but eventually I got better.  And now I’m only somewhat sucky.  But the amazing thing is that I’ve become a great manager of managers.  I know all the pitfalls, and I am great at telling others how to avoid them :)  I bet Josh is a better golf instructor than Tiger.

 

 
 

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