Pages 163 – 196; Amazon Locations 2085 – 2540

Humanity plays games to create scenarios where there are clear winners and losers.  Games let us test out what works and what does not without the violence and destruction of true fighting and warfare.  If we are picking the game and defining the battle as we launch Moore’s new technology product, then we owe it to ourselves to pick a battle we will win.

The first market must be won, otherwise we will not cross the chasm.  Pick a winnable battle.  Define the battle so victory is certain.

Best Quote(s)

“The fundamental rule of engagement is that any force can defeat any other force—if it can define the battle.” Chapter 6, Location 2088

Sun Tzu lays this out in Attack by Stratagem – the goal is to know yourself and know the opposition.  Strategy is the use of this knowledge to create victory, tactics are how you create scenarios where you will win and the opposition loses.

“In our experience to date with developing an early market, competition has not come from competitive products so much as from alternative modes of operation.” Chapter 6, Location 2099

Persuading someone to change their work flow is hard, and it is one of the reasons why Moore’s use of The Whole Product model is so valuable.  Imagine the early challenge of selling electric lamps and all the alternative modes of light that required very different skills to use.

“In sum, the pragmatists are loath to buy until they can compare. Competition, therefore, becomes a fundamental condition for purchase.”  Chapter 6, Location 2114

Define your product in comparison to a product that is bought today, then use the Whole Product Model to uncover – and address – the weaknesses.  Use customer feedback to prioritize what gets fixed first.

“Crossing the chasm, in this context, represents a transition from product-based to market-based values.”  Chapter 6, Location 2139

There is a market for these kinds of goods.  These buyers have common needs and have a common way of paying people to fix their needs.  This is a big change from having a product and looking for people that might need it – your knowledge of the customers’ needs is much higher.  Focus is required to know your customers’ needs.

“When most people think of positioning in this way, they are thinking about how to make their products easier to sell. But the correct goal is to make them easier to buy.” Chapter 6, Location 2361

Easier to sell is just marketing speak – and as Moore calls out – it comes across as slimy.  Easier to buy involves anticipating the customers need, doing some of their work for them, and really attending to what is important to them.  As Carnegie would put it – focus on what they care about.

“For (target customers—beachhead segment only) Who are dissatisfied with (the current market alternative) 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).” Chapter 6, Location 2436

This simple, traditional, well-trodden statement of the goal of the product is an established part of MBA and Marketing Speak.  It works.  Use it.

Page by Page

2085

2088

“The fundamental rule of engagement is that any force can defeat any other force—if it can define the battle.” Chapter 6, Location 2088

2093

“Well, in the case of crossing the chasm, one of the key things a pragmatist customer wants to see is strong competition.”

Creating the Competition

2099

“In our experience to date with developing an early market, competition has not come from competitive products so much as from alternative modes of operation.” Chapter 6, Location 2099

2104

“Pragmatists work to educate the company on the risks and costs involved. Visionaries counter with charismatic appeals to taking bold and decisive actions. The competition takes place at the level of corporate agenda, not at the level of competing products.”

2109

“In the pragmatist’s domain, competition is defined by comparative evaluations of products and vendors within a common category.”

“And the conclusions drawn from these matrices will ultimately shape the dimensions and segmentation of the mainstream market.”

SGI for film editing and SUN work stations.

2114

“In sum, the pragmatists are loath to buy until they can compare. Competition, therefore, becomes a fundamental condition for purchase.”  Chapter 6, Location 2114

2119

“Creating the competition is the single most important marketing decision made in the battle to enter the mainstream. It begins with locating your product within a buying category that already has some established credibility with the pragmatist buyers. That category should be populated with other reasonable buying choices, ideally ones with which the pragmatists are already familiar. Within this universe, your goal is to position your product as the indisputably correct buying choice.”

2129

“Moreover, these categories appear specifically designed to exclude from the competitive set the very products the pragmatist is most likely to consider as purchase alternatives. As marketing devices for crossing the chasm, therefore, they are useless.”

2134

“So, how can you avoid selecting a self-servicing or irrelevant competitive set?”

2139

The Competitive Positioning Compass

“There are four domains of value in high-tech marketing: technology, product, market, and company.”

“Crossing the chasm, in this context, represents a transition from product-based to market-based values.”  Chapter 6, Location 2139

2152

“The model also points to the fact that people who are supportive of your value proposition take an interest in your products and in your company. People who are skeptical of you do not.”

2161

“demonstrating a strong technology advantage and converting it to product credibility, and you develop a mainstream market by demonstrating a market leadership advantage and converting it to company credibility.”

2177

“To sum up, it is the market-centric value system—supplemented (but not superseded) by the product-centric one—that must be the basis for the value profile of the target customers when crossing the chasm.”

2182

Creating the Competition – Silicon Graphics

• Market alternative – scene editing – reasons to change.
• Product alternative – Sun desk tops – validation.

2203

“To sum up, 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).”

2208

Example 2 – Quicken

2239

“You choose your competition to help you define the niche market you will dominate. As long as they are well behaved and stay out of your niche, you go out of your way to honor their achievements elsewhere.”

2244

Robert Frost—“ Good fences make good neighbors.”

Creating the Competition – Current Opportunities

“Channelpoint, Diffusion, and VerticalNet.”

2275

“In a bar, when asked what Channelpoint does, I can now say, “Oh, they’re the SABRE System for the insurance industry.””

2299

Customer communication software:

“There is a project alternative—that is, an early market offer—to accomplish the same goals, building out a custom system with a technology vendor like Broadvision or an enterprise systems partner like IBM.”

2315

Verticalnet – micro sites

“Say you are attracted to sludge collection.”

2326

“It is not Dilbert with whom you need to position but rather the people who want to sell to him.”

2331

In closing …

2347

“So, market alternatives call out the budget and thus the market category, and product alternatives call out the differentiation. It sounds a lot like positioning,”

Positioning:

• Noun, not a verb.
• Biggest influence on purchase decision.
• Positioning is in the mind of your customer
• People don’t like changes in positioning.

2361

“When most people think of positioning in this way, they are thinking about how to make their products easier to sell. But the correct goal is to make them easier to buy.” Chapter 6, Location 2361

2366

“Even though the words appear to address the customers’ values and needs, the communication is really focused on the seller’s attempt to manipulate them, a fact that is transparently obvious to the potential consumer.”

2371

“The goal of positioning, therefore, is to create a space inside the target customer’s head called “best buy for this type of situation” and to attain sole, undisputed occupancy of that space. Only then, when the green light is on, and there is no remaining competing alternative, is a product easy to buy.”

4 stages of positioning:

1. Name it and frame it
2. For whom for what – who for and what for
3. Competition and differentiation
4. Financials and futures

2402

The Positioning Process (4 steps):

1. The claim
2. The evidence
3. Communications
4. Feedback and adjustment

2412

The Claim – Passing the Elevator Test

Why VCs need clear claims:

1. Clear communication
2. If bad, comms will be bad
3. R&D bad too
4. Hard to recruit partners, allies
5. No one else will finance it

2436

“For (target customers—beachhead segment only) Who are dissatisfied with (the current market alternative) 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).” Chapter 6, Location 2436

2459

“One final point on claims before moving on to other issues: The statement of position is not the tag line for the ad.”

2465

The Shifting Burden of Proof

2475

“In sum, to the pragmatist buyer, the most powerful evidence of leadership and likelihood of competitive victory is market share.”

2480

Whole Product Launches

2490

“out? The message now is “Look at this hot new market.” The message typically consists of a description of the emerging new market, fed by an emerging set of partners and allies, each supplying a part of the whole product puzzle, to the satisfaction of an increasingly visible and growing set of customers.”

2510

“The great benefit of the business press as a medium of communication is its high degree of credibility across virtually all business buying situations.”

2531

Recap: The Competitive Positioning Checklist

1. Focus – the company must have value prop
2. Create the Competition
3. Focus your communications
4. Demonstrate the validity of the claims.

2540

Pages 105 – 128; Screens and Locations (in Kindle) 1471 – 1726

Moore spends nearly 30 pages hammering home some important points:

1. A beachhead must be identified, and winning it must be the focus.
2. There will not be enough information for everyone to be satisfied.
3. The beachhead – and the markets behind it – are won with The Whole Product concept.

Best Quote(s)

“If you don’t know where you are going, you probably aren’t going to get there.” Chapter 4, Location 1471

If you don’t know what you’re doing – do not do it harder.

“But you cannot expect to transform a low-data situation into a high-data situation quickly.” Chapter 4, Location 1516

Yes, more data can always be found – but will it lead to a better decision?  Is the time spent uncovering better data worth the opportunity cost?

“Since, however, investment and time are two of your scarcest resources, cheaper and sooner are very desirable attributes in a target market scenario.” Chapter 4, Location 1653

If you can prove your product functions fast and cheap then this is always the preferred path.  This is one of Ries’s main points in The Lean Startup.

“This means you can focus all your attention on the whole product, which is where it needs to be. Nail that and you win.” Chapter 4, Location 1683

Moore is being prescriptive – so listen closely – you must win the beachhead and the beachhead is won with the whole product.

“The enemy in the chasm is always time.” Chapter 4, Location 1688

Even the largest, oldest, wealthiest organizations don’t have infinite patience.  “Beyond three years might as well be infinity…” I’d read a study that showed most purchasing / technical / front end engineers at customers were in their roles for an average of three years.  (Typing this out, it feels like it is from Ries.) Which means that if you can’t win in 1.5 years, you should assume you’ll have to start over with a new buyer.

Just because your organization has patience does not mean that your customer will.  And even if your customer does have patience – will the other product competing for their attention be so slow to demonstrate urgency?  Move with speed and purpose.

Page by Page

“If you don’t know where you are going, you probably aren’t going to get there.”

1480

“Rather, they suffer from a built-in hesitancy and lack of confidence related to the paralyzing effects of having to make a high-risk, low data decision.”

1485

“In sum, there’s a lot riding on this kind of decision, and severe punishment for making it badly.”

1490

“The market we will enter, by definition, will not have experienced our type of product before.”

1506

“But it is absolute folly to use such numbers for developing crossing-the-chasm marketing strategies.”

“That’s when you hear them saying things like, “It will be a billion-dollar market in 1995. If we only get 5 percent of that market… When you hear that sort of stuff, exit gracefully, holding on to your wallet.””

1511

“They know the numbers do not provide the answers they need.”

Moore is using more of the Carnegie type persuasion writing – showing why things are good, why the alternatives are bad, and how following his guidance gets the reader what they want.

1516

“But you cannot expect to transform a low-data situation into a high-data situation quickly.”

Informed Intuition

1526

“Only work with memorable images.”

Characterizations – visionary’s, pragmatist, early adopter, etc.

1542

“However, since we do not have real live customers as yet, we are just going to have to make them up.”

1553

Electronic Books – An Example

Reading Chasm on a Kindle this time – it is amazing how often the eBook is brought up and how write his forecasts were.

1569

“In consumer scenarios, the three roles of user, technical buyer, and economic buyer tend to merge into one or two.”

1575

“It is extremely difficult to cross the chasm in consumer market.”

1593

A day in the life – Before and After

1614

“This is not a formal segmentation survey—they take too long, and their output is too dry.”

1620

Market Development Strategy Checklist

1. Target customer
2. Compelling reason to buy
3. Whole product
4. Partners and allies
5. Distribution
6. Pricing
7. Competition
8. Positioning
9. Next target customer

Must pass the first four to be eligible as a beachhead. Then rank along the last 5 to identify #1.

1629

“Can’t we go after more than one target? The simple answer is no.”

1648

“A very low score, relative to the others, in any of these factors almost always is a show-stopper.”

1653

“Since, however, investment and time are two of your scarcest resources, cheaper and sooner are very desirable attributes in a target market scenario.”

1678

“This is a white-water rafting strategy, where hesitating on a split decision is the one behavior guaranteed to capsize the boat.”

Vs the Aircraft Carrier

1683

“This means you can focus all your attention on the whole product, which is where it needs to be. Nail that and you win.”

1688

“The enemy in the chasm is always time.”

1698

“So the rule of thumb in crossing the chasm is simple: Pick on somebody your own size.”

1704

Recap: The Target Market Selection Process

7 step process to make decisions

1726

Pages 33 – 72.  Locations 544 – 1071 in Amazon Kindle.

In Chapter 1 Moore introduced one great topic – his guiding light – his North Star – the Technology Life Cycle Adoption model.  His great bell curve of adoption, with sections denoting the psychographic profiles of each type of buyer, is his prescription for the future of every industrial B2B product.

Best Quote(s)

“…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.” loc 567

Moore’s definition of a market – tucked away as an aside – is one of the best anywhere.  Across 100s of marketing books there are many definitions, but his is clear and consistent.

“Because controlling expectations is so crucial, the only practical way to do business with visionaries is through a small, top-level direct sales force.” Loc 716

Business books have value when they give clear definitions (like above with markets) and when they are prescriptive about specific situations.  New products need a direct sales force to succeed with the most likely group of buyers – early adopters.

“Visionaries are the ones who give high-tech companies their first big break. It is hard to plan for them in marketing programs, but it is even harder to plan without them.” Loc 725

Moore’s comments here echo the persuasion methods of Carnegie.  Yes, the visionary is a hard person to win over – but woe to the company that decides to avoid visionaries.

“Then we must get very practical about focusing on one application, making sure that it is indeed a compelling one for at least one visionary who is already familiar with us, and then committing to that visionary, in return for his or her support, to removing every obstacle to getting that application adopted.” Loc 772

Focus, focus, focus.  Too many modern products launch as the ‘AllTech’ with many applications and uses.  Find one use with one market and validate that it works.  Moore’s comments on focus and validation sets up Ries’s writing in The Lean Startup.

“If high-tech marketers do not take responsibility for seeing that the whole product solution is being delivered, then they are giving the skeptic an opening to block the sale.” 1003

The D-Day invasion is Moore’s metaphor for successful marketing – here he is building off of Sun Tzu’s more ancient counsel from his chapter on Tactical Dispositions, “13… Making no mistakes is what establishes the certainty of victory, for it means conquering an enemy that is already defeated.”  Don’t let the skeptic block the sale, be prepared.  Moore is helping the reader launch a product that can survive the first three waves of buyer – from the early adopters to the pragmatist, and in so doing, cross the chasm.  In Ries’s Lean Startup, we see how this can be done as effectively and with the lowest amount of risk.

Page by Page, Screen by Screen, Swipe by Swipe

553

“If all goes well, and the product and your company pass through the chasm period intact, then a mainstream market does emerge, made up of the early and the late majority. With them comes the real opportunity for wealth and growth.”

“To reap the rewards of the mainstream market, your marketing strategy must successfully respond to all three of these stages.”

557

First Principles

562

“Marketing: It simply means taking actions to create, grow, maintain, or defend markets.”

567

“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.”

571

“If two people buy the same product for the same reason but have no way they could reference each other, they are not part of the same market.”

If they can’t talk to each other – or refer to each other in any way – then those two buyers are not in the same market.

589

Early Markets

594

“High-tech marketing, therefore, begins with the techies.”

599

Moore gives us the name of his four archetypes of the ‘Techie’: Gyro Gearloose from Disney,  Archimedes of “Eureka” fame, Doc Brown from Back to the Future, and ‘The Professor’ from Gilligan’s Island.

From a persuasion standpoint – these lists are great because they show us what the other buyers are not.  If this were Carnegie, he would explicitly say something like, “If your buyer is not Gyro Gearloose, then he is not an early adopter!”  Moore is never that explicit – but he gets closer to such prescriptive statements later in the book.

604

“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.”

And most customers do NOT want to do this!  If your marketing plan involves finding all the customers who love doing your work for you – then your marketing plan is insufficient.

622

“In business, technology enthusiasts are the gatekeepers for any new technology.”

Wants:

• Truth
• Access to source
• First

639

“In sum, technology enthusiasts are easy to do business with, provided you (1) have the latest and greatest technology, and (2) don’t need to make much money.”

“want to try it out just to see if it works.”

653

Early Adopters: The Visionaries

Kennedy w Space, Henry Ford, Jobs at Parc, Laube at PWC for Lotus, Solvik at Cisco – web service, Barksdale at Fedex,

672

“Visionaries are not looking for an improvement; they are looking for a fundamental breakthrough.”

676

“a visionary derives value not from a system’s technology itself but from the strategic leap forward it enables.”

681

“They typically have budgets that let them allocate generous amounts toward the implementation of a strategic initiative.”

685

“The “incarnation” of this dream will require the melding of numerous technologies, many of which will be immature or even nonexistent at the beginning of the project.”

2 aspects:

• 1 Project focused. Forces need to productive.
• 2 In a hurry.

708

Projects –

such that each phase is,

“• accomplishable by mere mortals working in earth time

• provides the vendor with a marketable product

• provides the customer with a concrete return on investment that can be celebrated as a major step forward.”

As Moore discusses in his later book Zone to Win – much of the way that bigger companies can win in new markets is focusing on their ability to properly do project management.

716

“Because controlling expectations is so crucial, the only practical way to do business with visionaries is through a small, top-level direct sales force.”

725

“Visionaries are the ones who give high-tech companies their first big break. It is hard to plan for them in marketing programs, but it is even harder to plan without them.”

730

The Dynamics of Early Markets

Challenges that are common include:

• company cannot market

752

• Sells product too early – vaporware
• Product never finds a compelling large value proposition

772

“Then we must get very practical about focusing on one application, making sure that it is indeed a compelling one for at least one visionary who is already familiar with us, and then committing to that visionary, in return for his or her support, to removing every obstacle to getting that application adopted.”

776

Mainstream Markets

780

Early Majority

795

Pragmatist CEOs:

“Ray Lane of Oracle (as opposed to Larry Ellison), Craig Barrett of Intel (as opposed to Andy Grove), Lew Platt of Hewlett-Packard (as opposed to Scott McNealy at Sun), and Carol Bartz on Autodesk.”

808

“This focus on standardization is, well, pragmatic, in that it simplifies internal service demands. But the secondary effects of this standardization—increasing sales volumes and lowering the cost of sales—is dramatic.”

817

“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.”

825

There is a Catch 22 for companies that are looking for pragmatist buyers:

• Won’t buy unless established
• Can’t get established unless they buy

Tend to be vertical, hard to penetrate. Like to see competition. Keeps costs down. Willing to pay some premium. Cost sensitive.

839

“Market leadership is crucial, therefore, to winning pragmatist customers.”

844

How to market:

• patient
• Conversant in their language
• Industry specific trade shows
• Journals

848

“You need to have earned a reputation for quality and service. In short, you need to make yourself over into the obvious supplier of choice.”

853

Late Majority: The Conservatives

858

“Conservatives, in essence, are against discontinuous innovations. They believe far more in tradition than in progress.”

871

“I did not buy my first CD until 1998.”

Moore is using Carnegie’s writing style – inserting himself into the vignette.

875

“In general, I hate “being connected,” which I associate with being either interrupted or confused, not being in touch.”

885

2 ways to market:

• Whole solution
• Low cost channel

907

The Dynamics of Mainstream Markets

952

Examples of mainstream market failures – Autodesk.

971

“The key lesson is that the longer your product is in the market, the more mature it becomes, and the more important the service element is to the customer.” 971

985

Laggards: The Skeptics

989

“One of the favorite arguments of skeptics is that the billions of dollars invested in office automation have not improved the productivity of the office place one iota. Actually, some fairly good data exist to support this notion.”

1003

“If high-tech marketers do not take responsibility for seeing that the whole product solution is being delivered, then they are giving the skeptic an opening to block the sale.”

“What skeptics are struggling to point out is that new systems, for the most part, don’t deliver on the promises that were made at the time of their purchase.”

1012

“Steamrolling over the skeptics, in other words, may be a great sales tactic, but it is a poor marketing one.”

1017

Back to the Chasm

Psychographics show the development of each position as we work our way left to right across the bell curve.

1034

“As we move from segment to segment in the technology adoption life cycle, we may have any number of references built up, but they may not be of the right sort.”

1039

Ways that visionaries alienate pragmatists:

• don’t respect their experience
• More tech interest than the rest of the industry
• Existing product infrastructure expectations – how much of the whole product is there?
• Overall disruptiveness

1071

“The high-tech vendor wants—indeed, needs—the pragmatist to buy now, and the pragmatist needs—or at least wants—to wait.” 1071