Crossing the Chasm summary

Ideally, as a product moves through the Technology Adoption Life Cycle, each group of customers will provide references for selling to the next, more skeptical group of adopters. Thus, like Tarzan swinging from vine to vine, the product sustains momentum.

The problem is that in the case of discontinuous or disruptive innovations, meaning products which demand substantial behavioral changes from their customers, this process does not unfold smoothly.

Unlike early-market customers, mainstream customers abhor products that require them to hunt for additional products and services.

Hence, they only want what are known as whole products, meaning products that completely satisfy their buying objectives. Pragmatists love Microsoft products, for example, because they know there is a wide infrastructure of supporting products and services available for them already.

Entering the mainstream market is an act of aggression: you are invading the existing players’ territory, hence you should plan your attack as you would a military invasion.

You start by securing a beachhead. This means targeting a specific market niche within the pragmatist group and becoming its undisputed market leader. From this base you can then expand to other segments until eventually you can dominate the entire market. The niche is the kindling with which you light the fire.

Choosing the right target niche to invade first usually means making a risky decision without having reliable information to base it on. Hence, it calls for informed intuition rather than analytical reasoning.

A tool to assist in this decision is a process called target-customer characterization. This means developing a variety of scenarios in which your product might be used by various customers. You consider the buyer, the end-user and how the product would actually improve the customer’s current situation.

The positioning of a product is the single largest influence on a customer’s buying decision. Positioning means the attributes associated with that product in customers’ minds, e.g. “Mercedes is a top-of-the-line car.”

But different groups of customers value different things. For visionaries, the features of a product, like its speed or size, are key, but for pragmatists the main evidence of a product’s value is its position in the market relative to competitors.

Before launching your invasion on the target niche, you must choose the distribution channels you will invade through and the pricing strategy you will attack with. This basically means deciding who will sell your products then slapping a price tag on them.

Pragmatists are very picky about which companies they buy from. Hence, when crossing the chasm, the number-one priority is to secure a distribution channel that pragmatist customers are already comfortable with.

Most successful chasm crossings happen in business markets because it is extremely difficult to do so with a consumer product.

Businesses usually have the economic and technical resources to adopt even immature products, whereas consumers do not. Though technology enthusiasts exist in consumer markets, too, they tend to rapidly move on to “the next cool thing.” At the same time, you are unlikely to find true visionaries to champion your product and underwrite your R&D.

After emerging from the chasm, companies often find they have inherited a number of commitments from the pre-chasm organization. These could, for example, involve the returns promised to investors.

To successfully manage these challenges and leave the chasm behind, difficult and profound financial and organizational choices must be made.