Crossing the Chasm

Opening

How many of you dream of starting your own company some day? How many of you want to be the CEO of your own firm? I know deep down in our heart everyone of us have the secret desire to do just that.

Today I am going to talk about the book “Crossing the Chasm”. A must
read for all the Startup aspirants. This book was written by Geoffrey A Moore in the year 1990 and sold about a million copies since then.

So what is this book all about? This book outlines a set of problems faced by all the startup and identifies certain well defined
solutions.

Let’s jump in without much ado. I know all of you are dying to hear more about it.

Body

The Bell Curve

To identify the problem w let’s look at this diagram here.  The Bell curve the parabola. The market scope   of a product can be defined by this cure. At the front are the innovators, the folks who invent the product. They are the first user of the products.  Closely following them are the Early Adopters. These are the folks who use the early version of the product and give their views. Then comes the Early and the Late majority of the user. This user base is the major chunk of the user base.  And for a product to be successful the product
managers have to position their products to this section of the curve.

The Chasm

We  often think that all these user groups are connected. And once we start selling a product it will quickly spread across the curve via
word of mouth. But that is not the case. There is a major problem gap between the 2 groups the early adaptors and the majority. The Chasm. The problem is that the majority group uses only those products which are already used and recommended by other folks in the majority curve. They cross reference each other. A classic case of Catch-22. The majority will use only those products which are already used by the majority. So how can we get them to use a new product?  That is the chasm.

Movie Example

Let me give you a real life example. Take the case of the movies.  The director, actors and the producers are probably the first people who see the movie.  They are the innovators.  When a movie is released we have the college students who don’t have anything else to do. They see all the movies.  They are the early adopters.  But for the movie to be a hit the general public has to see the movie. People like you and me.  But I won’t go to see a movie unless my friends tell me it’s a good movie.  And they won’t go to the movie if I don’t tell them that it’s a good movie.

The D-Day Analogy

Now that we have identified the chasm, let’s see how Moore solves them. Moore gives a brilliant analogy to explain the solution. The D-Day analogy.

During World War II, Hitler had captured most of Europe and the allied forces wanted to get a foot hold in Europe to launch there invasion further. So on June 6, 1944, the allied forces launched a massive invasion and landed on the beaches of Normandy. About 2 lacks troops were involved in the war.  Once the allied forces setup their base in Normandy they could go further and capture other parts of Europe and eventually defeat Hitler.  This day June 4th of 1944, is referred to as the D-Day in history books.

In his analogy, Moore refers to Britain as the Early Adopters, The English channel as the Chasm and Europe as the Majority.  Moore suggests that to get to the majority group we should identify  the point of attack (a weak point which is overlooked by the competitor) and put all our force to capture it. Once we have become the market leader in the inch we can go ahead and invade other portions of the market.

Point of attack

Let’s dig deep into the solution. Firstly let’s see how to indentifying the point of attack. Every market can be segmented into smaller groups.  Once we have segmented the market, we can identify the segments which are not well served by the competitors.  See if the segment has certain pressing problems which can be addressed by the product.  Let me give you some examples.

Blog Example

Let take the case of blogs, we want to start a new blog and want to make it very popular. Clearly we can take over the established players, we can write about the same things the established players are writing about.  Lets take the technology space. There are many blogs, Meshable, GigaOM.. etc. which are well established. We can start a blog which writes about a specific technology inch. That is what Cloud Avenue did.  Its concentrated on cloud computing and it’s a popular blog now.

Postit Example

Another example is the case of Yellow Post Its. They were first manufactured by 3M. During the initial days no one used them and the product was not doing well. The product had hit the Chasm and 3M was going to shut it down.  That’s when a dynamic Product manager hit upon the idea. He sent packs of Post It to the secretaries of all the Fortune 500 companies. The secretaries used them to scribble agendas, send memos and note phone calls.  And the rest is history.

Assemble the Force

Once we have identified the point of attach we can assemble our force and start the attack. So what do we mean by Assembling the force. When we are selling a product it does not end with there. It has much more to it.  We have to identify the packaging which will suit our target audience. The product may be complicated so we might have to provide training. The product might need supporting products. Moore calls this the whole product.

Oracle Example

Oracle databases as a whole product. When a company decides to by oracle product it actually buys a whole lot. It also buys after sales support. The company has to buy more software to manage the database. Plus additional software to access the database vie the application layer. Apart from that it might have to provide training to it employees.  Oracle has solved all these problems very efficiently, it delegates the training stuff to third party and the oracle database access is done by open source community and oracle encourages these efforts. Oracle collaborates with its subsidiaries to develop products for managing the database.  And that is the whole product.

Launch the Invasion

Once we have identified the Point of Attack, and Assemble the Force it’s time to launch the invasion.  This is where we think of distribution and pricing. According to Moore, in a battle distribution is the vehicle and pricing is the fuel.  Moore dwells deep into these topics in the book. But they are out of scope at this juncture. You can read more in the book.

Conclusion

Let’s recollect what we learned so far. Every product has a market scope which is represented by the bell curve. At the front of the curve is the innovators and the Early adopters and at the middle of the curve is the early and late majority. For a product to be successful it has to be used by this majority group. But there is a chasm between the two groups.

To cross the chasm we have to identify an inch in the majority market which is not addressed by our competitors and put all our force in capturing it. Once we have that we can target the other portions of the majority market.

For all the startup aspirants, I highly recommended that you read this book before you plunge in. I bought it on eBay for Rs. 230. It is a worthwhile investment.

Hi I am Kumaresan. Today I am playing the role of Grammarian and Word Master of the day. My job today will be to note the good and bad usage of words by each speaker and report them at the end of the meeting when called upon by the General Evaluator. I will also be noticing the no of times the Speaker uses the Word of the day during their speech.

Before going to the word of the day I would like to point out that in toastmasters it a practice, or one could say ritual to clap when some user uses the word of the day.

Now coming to the Theme of the Day and Word of the day. Today’s theme is “Necessity is the mother of all Innovation” and the word of the day is Innovation. The meaning of these words is well understood and I would not spend more time explaining. But I would like to narrate a story. It’s actually not a story but the sequence of thoughts of thought that might be running in the minds of a One Day Old kid.

The Kid opens the eyes for the first time. It’s surrounded by people. “Acho Acho.. ole Ole… Kicku Kichu”

Ah ha.. I see something. Who are these people making funny noises? Are they mad? Don’t you folks have anything to do? I am trying to sleep here?

The baby closes its eyes to avoid the mad people shouting at it and tries. But after some time baby has an Uncomfortable feeling.

What is this feeling am having. It’s not good. I don’t like it. It seems to come from my stomach.

The baby names this feeling Hunger. It tries to tell the mad people that its hungry. But they are still busy doing mad thing. ”Acho Acho.. Ole Ole”. Frustrated the baby gives up.

But then the baby gets an Idea. The baby Cries. The mad people hear it and give it milk. The bad feeling goes away and the baby goes back to sleep. End of Story.

Necessity is the mother of Innovation.