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11
Aug 2016
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Choosing a Segment? "Pick on Somebody Your Own Size"

Choosing a Segment?

When I do workshops with clients to help them find a way of #CrossingTheChasm, the most common phrase I hear is "but that's too small of a segment."

Let's discuss this. The goal in segmentation is to become so powerful, so dominant, that your solution is the only one that is considered a viable solution. That's why we say "Pick on somebody your own size."

Let's say your company (or your division within a large company) does $5MM in annual business, albeit opportunistically, with no regard to segmentation. You don't yet own anything. So what size segment should we attack?

How about one that has the potential of $5MM in revenue. In a period of 1-2 years, you should dominate that segment. But, you ask, that's too small of a segment. Yes, you could go after a segment where the revenue could be $100MM, but as a $5MM company, how long would it take to dominate that segment? Do the math. Way too long.

So, pick on somebody your own size. If your forecasted revenue is $5MM, choose a segment that has the potential of $5MM in revenue. Plan for $2.5M in revenue from that segment, and get the rest from "opportunistic revenue," that is, revenue outside your targeted segment. Then, leverage your success into adjacent segments.

Before you know it, you will dominate the market. Here's to success in #CrossingTheChasm.

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Chasm Institute LLC helps high-tech teams learn, apply, and implement best practices in market development strategy. These best practices are based on Geoffrey Moore's best-selling books Crossing the Chasm, Inside the Tornado, Living on the Fault Line, Dealing with Darwin, and Escape Velocity plus hundreds of client engagements with high-tech companies. 

Chasm Institute helps companies align their product development, marketing, and sales functions to achieve and maintain market leadership in their categories.

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