[Read the entire chapter by chapter review of Crossing the Chasm.]

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

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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

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“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

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“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

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“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.

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

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“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.”

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“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.”

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

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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

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“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.”

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“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.”

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“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.”

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Creating the Competition – Silicon Graphics

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

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“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).”

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Example 2 – Quicken

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“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.”

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Robert Frost—“ Good fences make good neighbors.”

Creating the Competition – Current Opportunities

“Channelpoint, Diffusion, and VerticalNet.”

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

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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.”

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Verticalnet – micro sites

“Say you are attracted to sludge collection.”

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

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In closing …

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“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.

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“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

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“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.”

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“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

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The Positioning Process (4 steps):

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

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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

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“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

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

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The Shifting Burden of Proof

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

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Whole Product Launches

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“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.”

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

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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.

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