Crossing the Chasm to Find Tech’s ‘Lead Users’ | by Warren Goldie
Texas Instruments’ intranet, TI Tomorrow
Lead users pounce on new technologies out of the starting gate. These people — who may be the worker at the next desk or your CEO — bought the first PCs, application software and cell phones. They did so for many reasons; some for the pure love of technology, others for perceived business advantage.
Why do some of the products they buy in succeed while others fall to the wayside?
There is a crucial do-or-die point in the technology adoption process when a product draws significant mainstream users — or it doesn’t. If it succeeds, such as with Microsoft Windows and Office, for example, it may become a market leader. Other products (remember the NeXT computer?) may be of high quality but lack the momentum to push past the lead users and into the mainstream.
In Crossing the Chasm, author Geoffrey Moore explains why:
“The point of greatest peril in the development of a high-tech market lies in making the transition from an early market dominated by a few visionary customers to a mainstream market dominated by a large block of customers who are predominantly pragmatists in orientation. The gap between these two markets, heretofore ignored, is in fact so significant as to warrant being called a chasm, and crossing this chasm must be the primary focus of any long-term high-tech marketing plan.”
How do we at Texas Instruments “cross the chasm” from the tenuous early market to bountiful mainstream success? Dr. Eric von Hippel of MIT has developed a model that asks us to first clearly identify our product’s potential lead users. In addition to foreshadowing general market trends, they are in fact the source of fully 80% of commercial market innovation.
Next, Moore tells us to focus on a specific market niche. “Trying to cross the chasm without taking a market niche approach,” he writes, “is like trying to light a fire without kindling.”
Forging into a mainstream market with a new product has been called an act of aggression, since new players must fight off entrenched rivals for market share. The goal is to become a market leader in a niche where you have a user base that can be continually referenced.
Moore offers two ways of doing this:
1. The Application Niche Approach captures the mainstream market by offering a specific application (such as desktop publishing or spreadsheet software). Tandem, for example, crossed the chasm using this approach by targeting and winning a new market segment early: ATMs. Apple did it with desktop publishing software.
2. The Thematic Niche Approach is based on identifying and exploiting a theme such as portability in computing or open systems architecture. Oracle used this approach with relational database software by focusing on the theme of portability across different hardware platforms.
To sum up, the way to best cross the chasm is to identify and focus on a particular market niche, then invest all possible resources into building and securing a leadership position in it.