If there’s really a significant gulf, as onetime marketer Geoffrey Moore put it, between selling to early adopters and the majority of technology buyers, what does this mean for companies in cleantech?
The chasm model holds that there’s a big difference between what companies need to do to effectively sell technology products to early adopters and what they need to do to sell to the early and late majority of the technology adoption lifecycle (source: Joe M. Bohlen, George M. Beal and Everett M. Rogers)
In the mid-90s, I was a senior consultant at the venerable Silicon Valley strategy consultancy Regis McKenna Inc. (RMI). The firm is credited with innovative marketing and business insights that helped put Intel, Apple, Electronic Arts, Microsoft, 3COM and many other tech companies on the map. It was an important company recognized for doing important work (valley lore holds that founder and author Regis McKenna’s business cards once bore the title “Himself.” If true, it was before my time).
One of our methodologies, based on the technology adoption lifecycle — itself based on work by Iowa State University, tracking the purchase of seed corn, of all things — became known as the chasm model, which Geoff Moore (then a partner at RMI, now a venture partner at Mohr Davidow) expanded on as the basis of his now-seminal Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers. I didn’t overlap at RMI with Geoff. But my office was down the hall from his.
Twenty years later, I still find myself trotting out the same chasm model we used at RMI to help our cleantech clients today understand the non-intuitive changes that need to take place to most effectively introduce their clean technology products to mainstream markets.
Here’s a summary of what we at Kachan & Co. share with clients and how the chasm applies to cleantech.
Technology Adoption Lifecycle and Chasm Primer
One of the technology adoption lifecycle’s key insights is that the different constituents of the lifecycle adopt innovation for different reasons. Early adopters are technology enthusiasts looking for a radical shift, where the early majority simply seeks productivity improvement.
Early adopters hope to get a jump on competition, lower their costs, get to market faster, have more complete customer service or get some other similar business advantage. Those in the majority of the market, however, want to minimize discontinuity. They want evolution, not revolution. They want technology to enhance, not overthrow, established ways of doing business. And they don’t want to debug someone’s product — they want it to work properly and to integrate with existing technology.
The chasm occurs because the majority of the market wants references from other customers like them, but pre-chasm vendors can only offer references to early adopters. Companies trying to cross the chasm run into trouble because they’re essentially operating without a reference base, trying to sell to a market that’s highly reference oriented.
Bridging this gulf is awkward because if they’re to be successful, companies must adopt new strategies just at the time they’re becoming most comfortable with ones that seem to work.
The only reliable way to exit the chasm is to target a niche market on the other side made up of pragmatists united by a common problem for which there is no known solution. These pragmatists are motivated to help the new technology cross the chasm if it is packaged as a complete solution to their problem.
Moore uses the D Day metaphor for how to do this, and it’s apt. An invasion force, comprised of a company and its allies (the product), must establish an early beachhead niche market (Normandy), from which to take additional market segments (France) with a view to liberating the whole of the market (i.e. Europe).
The metaphor argues that an overwhelmingly superior force concentrated on a highly focused target worked in 1944 for the Allies, and is equally relevant in cleantech. It argues for laser-focused market segmentation, focusing 100% of a company’s sales and marketing budget on one initial, small segment if it’s to be successful in the wide majority market.
Why is this counter-intuitive and hard?
What’s the relevance of all of this to cleantech? Are there chasms to cross? Absolutely. There are plenty of examples of clean technologies and companies that the chasm metaphor applies, and learnings abound… or should:
Chasm Crossing Done Well in Cleantech
Some companies and industries appear to be doing things right.
At Risk in Cleantech Chasm Crossing
There are also companies and sectors in cleantech that would benefit from an understanding of the power of a well-defined target segment as path to the larger market they seek.
In all cases, the companies or sectors below would be best advised to focus more clearly on a specific initial beachhead segment. And then craft a whole product (first introduced by Theodore Levitt in The Marketing Imagination, and co-opted and used ad nauseam by us at RMI and now at Kachan & Co.) to best meet the expectations of that beachhead segment better than any other alternative on the market.
The chasm between early adoption and mainstream uptake is a formidable and unforgiving gulf. It typically goes unrecognized. So companies in cleantech are indeed advised to mind the gap.
Which market segments should cleantech vendors seeking mainstream adoption pick over others? In which single, narrowly-defined basket should they place their eggs? Beachhead segmentation is one of the highest-risk, lowest-data decisions a company will ever make. We at Kachan & Co. have developed methodologies to help cleantech companies make these decisions and minimize their risk.
My alum Geoff Moore, in books subsequent to Crossing the Chasm, introduces other metaphors like “bowling alley,” (co-opting one of RMI’s segmentation methodologies), “tornado,” “main street” and others to help businesspeople understand marketing precepts. But it’s the chasm he’ll be best remembered for.
Cleantech companies and investors that don’t already own a copy of this book should. Those interested in details of more of the methodologies we used at RMI are encouraged to pick up The Regis Touch — one of Regis’ earlier, now-overlooked but surprisingly still relevant books. The examples in both books are so dated they’re distracting, but the methodologies in both are still sound.
Originally published here. Reproduced by permission.
A former managing director of the Cleantech Group, Dallas Kachan is now managing partner of Kachan & Co., a cleantech research and advisory firm that does business worldwide from San Francisco, Toronto and Vancouver. A senior consultant at Regis McKenna Inc., he served as VP marketing for several high tech companies and led worldwide marketing at the Cleantech Group during two of its most successful years. Kachan & Co. staff have been covering, publishing about and helping propel clean technology since 2006. Kachan & Co. offers cleantech research reports, consulting and other services that help accelerate its clients’ success in clean technology. Details at www.kachan.com.
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