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Crossing the Chasm: Where Most Businesses Fail

Updated: Jun 19


Technology adoption life cycle

Marketers have traditionally identified different kinds of consumers ranging from Innovators to laggards, with each dominating the market at a certain stage of a product lifespan. Each group of consumers have unique needs and wants that any successful company should identify in order to design their value proposition accordingly.


The kinds of consumers that will buy a product exhibit a range of adaptability to novelty, divided into five categories: Innovators, Early Adopters, Early Majority, Late Majority and Laggards.

  • Innovators seek out novel technology; it’s like a hobby for them. There aren’t many Innovators, and because they’ll try new things, they are important. Other people see them use new things and feel braver themselves about trying them.

  • Early Adopters are quick to understand the benefits of new technology. Unlike the Innovators, they don’t love technology for its own sake. This group relies on its own intuition and vision to make buying decisions.

  • Early Majority are pragmatic consumers. If a product seems useful, this group will try it. The Early Majority are cautious of fads.

  • Late Majority consumers wait for something to become well established. They don’t feel confident in their ability to deal with technology and often buy from big companies.

  • Laggards are those consumers who, for personal and/or economic reasons, are not looking to buy new technology.


Geoffrey Moore pointed out in his best-seller "Crossing the Chasm" that there are gaps between each group of consumers and the other, the biggest of which is the gap between the early innovators and the early majority which he calls "The Chasm". Crossing the chasm is tricky and most businesses fail to do. We see lots of startups failing to carry their product forward from the early market to the mainstream market.



Why is it Hard to Cross the Chasm?


Put simply, different consumer expectations between the early adopters and the early majority. The first group are looking for a change agent. They want to be the first to implement a new technology or use a new product as it may give them an edge over their competitors, whether they are a business consumer, or an individual consumer looking to differentiate themselves over their peers. They understand that by using a new product, they may face glitches in the product or bad customer support. They understand the risk, and they are comfortable with it.


On the other hand, the early majority are the pragmatists. They are looking for productivity improvement. They don't want beta anything. They want a complete solution that is convenient to use.


Most startups fail to recognize that their marketing strategies that worked well to attract the early adopters aren't suitable to attract the early majority. Furthermore, the value proposition of a company needs to be re-examined before crossing the chasm.



Strategies and Tactics to Cross the Chasm


1- Standardize your products and services

As we mentioned, the early majority are pragmatic consumers. Those pragmatists want to standardized products. They don't want to go through a long learning curve to understand your product. They expect your product to match the mainstream standards.


2- Pick a strategic niche with easily identified adjacent markets

If you want to make it in the mainstream market, you need to strategically pick one specific niche to focus on and drive your competitors out of this chosen target. You can build kinks around your product to appeal to this specific niche. Also, it is important to focus your marketing activities on a specific niche. This way you can fully utilize the network effect to generate future sales, and build authority within this target audience. Once you dominate a niche, you should make your way to adjacent markets, one niche at a time.


3- Strengthen your partnerships and distribution channels

The company's goal before the chasm is to grow. After the chasm, you should start thinking about making money, and you cannot do so without proper distribution channels. When you start your business, you might have one distribution channel and limited partnerships. However, if you intend on thriving in the mainstream market, you need to expand your distribution channels and build more strategic partnerships. Digital marketing is key in this stage.


4- Make use of inbound marketing

Inbound marketing is a business methodology that attracts customers by creating valuable content and experiences tailored to them. It is basically a form of pull-strategy marketing instead of pushing your product to your potential audience. It is slow, but sustainable way to generate future sales and build brand awareness. If you want to enter the mainstream market, you need to rely on inbound marketing as part of your strategy.


You can read a full article on inbound marketing here:


5- Reshape your organizational structure

Before the chasm, you are a startup. You think like a startup. you focus on adaptability and innovation. There is a big emphasis on the product and chances are you and your team hate the organization of big enterprises. After crossing the chasm, you will find yourself swimming with sharks. You need to start thinking like a big enterprise. You may need to change your organizational structure to fit the needs of the mainstream market.



Conclusion


In a nutshell, consumer expectations before the chasm are fundamentally different from their expectations after the chasm, and so is your organization needs. To cross the chasm successfully, you need to re-examine your value proposition, rearrange your priorities, and create new marketing strategies that fit the needs of the mainstream market.



GrowaholicLab is a data-driven growth hacking agency that helps you carry your business forward across the different stages of a product life cycle by fully utilizing the secrets and tricks of digital marketing.


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