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Why the chasm still exists

Posted by Jon @ MaRS, February 6th, 2009

Tags: social media, strategy, technology

Is there a chasm?

In his blog post of January 13, my colleague Charles Plant questioned the existence of a “chasm” in the development of technology markets as originally described Geoffrey Moore in Crossing the Chasm. Charles offered three arguments in support of his position:

That business strategy is now driving technology
That the “roles” of the early adopter and visionaries have changed because they have similar objectives.
That social media is accelerating the speed with which information is distributed and thus eliminating the “pause” in market development which is The Chasm.

My position is that The Chasm is alive and well but, unfortunately, still not well understood by the technology community. Let me explain by addressing the above concerns as they relate to market development.

Business strategy as a driver of technology: While the demand-side for technology may or may not be more disciplined in its behaviour, the supply-side — the technology vendors and entrepreneurs — still work their magic to develop great ideas, get financing and bring new technology solutions to the market place. Some of these technologies will eventually address business processes that the demand-side would not have the imagination to put in their business strategies.
The roles of early adopters and visionaries have changed: The argument suggests that early adopters have roles — a kind of top-down approach where people in a particular organizational role are told to respond in a particular way towards technology. While I agree that you are more likely to find technology enthusiasts in a company’s IT department and that they have responsibilities corresponding with that job, I contend that early adopters and visionaries are to be found throughout organizations and not only in technology-facing jobs. To be an early adopter is not an organizational role, but rather describes an innate behavioral trait which is mainly based on psychological constructs such as people’s ability to trust and their responses to risk — traits that don’t change as quickly. Just as people are individually wired in those areas, they also have other talents and interests that may take them anywhere in an organization (for example: Gartner Inc’s CEO Gene Hall builds his own computers in his spare time). Similarly, you will find pragmatists in technology facing roles. All of this means that you can’t assume that the objectives of a corporation will dictate how people behave towards technology.
Social media is accelerating the distribution of market information and narrowing the chasm: The advent of the internet and the concept of “information at your fingertips” is only part of the story concerning media development. A longer lasting and more complex trend is the ongoing media and audience fragmentation. Simply put, with the internet we have much more information available, but it is spread out across an increasing breadth of media vehicles and brands that cater to narrow sub-cultures and market segments. A consequence of this fragmentation is that an early adopter will have a specific set of channels and media they consume, while a pragmatist will consume a completely different set of media channels.

In sum, the emergence of social media is not of significance in terms of a technology crossing the chasm. However, the global nature of the internet means that more early adopters across the globe are exposed to the same information, thus helping start-ups with interesting technology reach a larger number of early adopters and better their opportunity of crossing the chasm. But, if the start-up then fails to develop a new message and target new segments through a different set of media they still won’t make it to the Main Street.

Geoffrey Moore created the Chasm theory based on his observation of organizational and human behaviour in the same way that Gartner Inc. developed the Technology Hype Cycle, and both are concepts that are valid today. The main reason for this is that people and organizations change slowly. In general, we are a lot more comfortable with many types of technology than we probably were in 1991, but when it comes to disruptive technologies — which is what the chasm is relevant for — not much has changed.

Discussion

Jon E Worren

Thanks for your comments Mark. I really appreciate the ying & yang analogy between the chasm and the hype cycle - that is a very useful way of distinguishing between the two concepts.

I agree that internet and social media may shorten adoption cycles, but in relation to the chasm it is important to understand how disruptive the technology is; is it an evolution or a game changer?

Keep up the great work Mark!

/Jon

Mark Raskino

Very interesting points Jon. The Chasm Crossing work has been very important and influential. I notice that many years after its publication startups are advised, sometimes pressured, into following its advice by investors. While the Chasm work focuses on the vendor / originator's perspective and problems, the hype cycle focuses on the buyer / adopter's point of view and key decisions. The two are like ying and yang.
We think the internet and social media are sometimes shortening hype cycles and tend to make hype peaks sharper. But this effect is moderated by the scope and scale of the innovation. For example unsurprisingly 'podcasting' had a very short and sharp hype cycle but Business Process Management (the third wave) as a management discipline does not seem to be progressing in a materially different way to say, BPR in the early 90's or CRM in the later 90's.
All the best - Mark

Jon E Worren

Thanks for the comment Greg,

I agree with your statement that many tech companies seem to over-invest in the development of their product instead of keeping a laser focus on meeting the customer need (defined by Clayton Christensen as the 'job-to-be-done'). As a consequence start-ups often run out of funds to market their product.

The main reason why this keeps happening is that the first customers of a new tech product tend to be driven by new technology - they like sophisticated products, but do not evaluate products on the basis of the value they deliver to the business. To cross the Chasm, companies need to ignore further product enhancement requests from these initial customers and remaine focused on offering a product which solves the 'job-to-be-done' for mainstream customers and build a value chain and messaging to support that.

However, ignoring requests from your initial customers is almost counter intuitive for most start-ups and this is probably where VCs and organizations such as MaRS need to focus a lot of the mentoring efforts in order to help entrepreneurs make difficult decisions like this.

/Jon

Greg Boutin

Hi Jon,

I agree wholeheartedly that the chasm is still alive and kickin', and you've done a great job at nailing some of its key drivers. I would insist further on one reason you touched upon, as in my experience it trumps most of the others: that the chasm is "still not well understood by the technology community", as you put it.

In a nutshell, a majority of tech ventures tend to design products for early adopters with little thought for the mainstream, and they tend to give too much of a role to technology and too little to other adoption drivers, starting with targeting a prevailing or latent need in the market. Influenced in part by (1) government programs focusing on technology (SR&ED anyone) at the expense of other sources of innovation (market process, design, distribution mechanism etc), (2) ex-CTO VCs too easily swayed over by the "coolness factor" of a technology, and (3) university programs that tend to create great techies with a total ignorance for market dynamics, start-ups are incentivized to overspend on technology and underinvest in matching a market need. In the course of assisting new ventures, I have seen this mistake being made times and times again. Lucky start-ups get funded (by tech-obsessed VCs) or acquired (by market-myopic companies) before the mistake has time to turn into market failure. Others die. I gave that a name, calling it the Customer Deficit Disorder.

Greg

Jon E Worren

Randall,

Thanks for the comment. I agree that Geoffrey Moore's book alone is not enough, but I have found Paul Wiefel's "Chasm Companion" a very practical complement to Moore's book. Having read Wiefel's book AFTER being part of two start-ups, I found it very easy to relate to. The big question at the moment, is whether entreprenuers with little or no marketing experience can make sense of this theory?

As MaRS is building out it's educational program, it has proven a challenge to identify relevant literature for those early stage start-ups. Personally I feel that The Chasm theory is both practical and relevant for today's start-ups, but we'll have to see; Shortly, we will be inviting some of our current clients to have a look at our educational material and tell us if they can make sense of it.

Jon

Randall Howard

Jon,
An excellent discussion. I would agree with you that there is still a Chasm Theory that technology marketers and product managers need to understand.

Part of the problem as to why the whole theory of Crossing the Chasm is so misunderstood is that it is very complex and needs to be finely tuned to each unique situation. To that end, reading the book is rarely enough. That insight became clear to me when I worked on a a launch and engaged Geoffrey Moore and Mark Cavendar back in the mid-1990's. The customization they brought to our engagement really showed the theory (and in particular the book upon which it is based) in another light altogether. For example, how you apply the theory was so different for applications, infrastructure, services and other companies.

I'm sure that's a big part of the reason that this theory is so misunderstood. It's just very complicated to apply fully and almost seems to need a Jedi Master like Geoffrey to bring out all of the subtleties. Likewise, I'm sure that they could do a whole new book with examples from the world of Web 2.0 and social media.

Randall