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Approach - Methodologies - The Chasm Model
As early as the mid-1980s, it was clear to NIP's founders (Chris Vallé
and Robert Davis, then at HP) that marketing rules needed to be re-written for
the then emerging high technology sector. "The Regis Touch", a book
by Regis McKenna, introduced word-of-mouth marketing and the segmentation of
high tech markets using what he called "The Market Adaptation Sequence",
and these concepts (from Regis
McKenna Inc. - RMI) were introduced to HP's UK Sales and Marketing operation.
In the early 1990s, Geoffrey Moore - a senior consultant at RMI - wrote "Crossing
the Chasm", which took the outline concept of the market adaptation sequence,
and developed it into a comprehensive marketing and selling methodology for
high technology. In 1992, Geoff Moore founded the Chasm
Group, a strategic consultancy for high-tech companies, and wrote more books:
"Inside the Tornado", "The Gorilla Game" and "Living
on the Fault Line" (see here
for more details).
All of these books have had a profound impact upon how we approach markets
and marketing.
Below are extracts from the books explaining the "Chasm" and the "Tornado", but first, some definitions and a diagram from the Chasm Group website illustrating the process described in the definitions:
Early Market: a time of great excitement when customers are technology enthusiasts and visionaries looking to be first to get on board with the new paradigm.
Chasm: a time of great despair, when the early-market's interest wanes but the mainstream market is still not comfortable with the immaturity of the solutions available.
Bowling Alley: a period of niche-based adoption in advance of the general marketplace, driven by compelling customer needs and the willingness of vendors to craft niche-specific whole products.
Tornado: a period of mass-market adoption, when the general marketplace switches over to the new infrastructure paradigm.
Main Street: a period of after-market development, when the base infrastructure has been deployed and the goal becomes to flesh out its potential.
Assimilation: the technology loses its discrete identity, moves into decline and is supplanted by a new technology paradigm.
The Chasm
There is a deep and dividing chasm that separates the early adopters in the "Early Market" from the early majority in the "Bowling Alley".
What the early adopters are buying is some kind of change agent. By being the first to implement this change in their industry, the early adopters expect to get a jump on the competition, whether from lower product costs, faster time to market, more complete customer service, or some other comparable business advantage. They expect a radical discontinuity between the old ways and the new, and they are prepared to champion this cause against entrenched resistance. Being the first, they are also prepared to bear with the inevitable bugs and glitches that accompany any innovation just coming to market.
By contrast, the early majority want to buy a productivity improvement for existing operations. They are looking to minimise 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.
Because of these incompatibilities, early adopters do not make good references for the early majority's concern not to disrupt their organisations: good references are critical to their buying decisions. So, when promoters of high-tech products try to make the transition from a market base make up of visionary early adopters to penetrate the next adoption segment (the pragmatist early majority), they are effectively operating without a reference base (and without a support base) within a market that is highly reference- and support-oriented.
The Tornado
To understand tornado market dynamics, we must focus on the infrastructure or technical buyers: the people in charge of deploying and maintaining our basic support systems.
IT professionals are expert at networking with each other - across company and industry boundaries if need be - to discuss the ramifications for the latest technology. These groups are united by a need to answer a single question: "Is it time to move yet?"
If the IT community moves too soon, they incur all the trails of early - which is to say, premature - adoption, devoting precious resources to debugging systems that a few years later would come already debugged, committing themselves to write in-house protocols that end up being incompatible with the eventual de facto standards, and stretching themselves running systems in parallel until the new paradigm is reliable and robust enough to shoulder the load alone. If they move too late, on the other hand, they expose their company to competitive disadvantages as others in their industry operate at lower cost and greater speed, by virtue of their more efficient infrastructures.
These tornado signals have their impact on the pragmatists. As a way of coping with this tension, they reach agreement about three principles:
- When it is time to move, let us all move together. Pragmatists want to all move at once to minimise the risk of moving either too early or too late. Whatever protocols get adopted at that time will be the go-forward de facto standards.
- When we pick the vendor to lead us to the new paradigm, let us all pick the same one. Picking a common vendor, which has the side effect of driving that company to becoming the market leader, ensures a clear reference point for the de facto standards. They know that market leaders are always the safe buy, always get the best third-party support, and they know they can always find people who have experience with that technology.
- Once the move starts, the sooner we get it over with the better. The goal in an infrastructure swap-out is to collapse the transition time in order to minimise the disruption for end users and the stress of having to maintain parallel infrastructures, not to mention having to build temporary bridges between them.