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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:

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 :)