Use these tools to drive your strategy from "the big idea" to specific plans for market leadership.
There is no "early", "mid" or "late" designation needed in the Chasm. During the Chasm, the category has now been accepted and deployed by several visionaries in the Early Market -- but pragmatist customers in the Bowling Alley are asking for 2 key deliverables that are not yet available (1) credible customer references from other trusted pragmatists (since Visionary references are "interesting" but not sufficient) and (2) a 100% minimum viable product (MVP) that truly solves the pragmatist's pain point in an important application area. During the Chasm stage, sales cycles are extended, and most that do close are for pilot projects. Sales forecasts are not being achieved, and the initial vendor excitement from Early Market sales success is no longer evident. Vendor sales teams and key managers are under increasing pressure to generate sales -- but even medium-size deals are surprisingly tough to close.
Discontinuity analysis can help you clarify what your strategy should be for a specific product. Once you have placed your product category on the Technology Adoption Life Cycle (TALC), it is helpful to consider how discontinuous the product will be in the marketplace. Discontinuity manifests itself in paradigm shock and application breakthrough.
Paradigm shock describes the amount of disruption likely to be experienced by buyers of any sort—technical buyers, economic buyers, or end users. The major changes in business processes or current behaviors that customers will have to accommodate reflects the amount of paradigm shock they are likely to feel. Paradigm shock is placed on the vertical axis on the discontinuity diagram.
Application breakthrough is the positive aspect of a high-tech innovation. It is the key benefit that results in adoption by customers. This benefit translates directly into significant returns on investment. Application breakthrough is placed on the horizontal axis on the discontinuity diagram.
Where do your products fall on this grid? Assess the benefit to users (the gain) and the cost of obtaining the benefit (the pain) and place an “x” in the appropriate square.
This is an exercise your marketing team should complete together, striving for consensus about each product. Individual perspectives will often vary, and pushing toward a unified position will help your team decide what this product truly offers (and costs) customers.
The innovation life cycle begins in the top left quadrant, where paradigm shock is significant but application breakthrough has not yet been shown. If technology enthusiasts become interested, an Early Market may form if other techies and visionaries can be enlisted to help create useful product applications. Visionaries are willing to accept significant paradigm shock as the application breakthrough emerges (top right quadrant).
To move further into the TALC, pragmatists must be found who will accept a smaller amount of paradigm shock with the promise of significant application breakthrough (bottom right quadrant). If the market category enters Tornado, paradigm shock is reduced further and the effect of application breakthrough is still significant, but may be reduced as well. Late market conservatives will pursue the category as the paradigm shock subsides and the application breakthrough becomes modest at best (bottom left quadrant).
Finally, a category will encounter an impenetrable wall at the end of the TALC. Innovations which attempt to extend an existing application, but which also introduce major paradigm shock, will not be tolerated by the market. This is the end of the TALC for this category.
As your product matures through the life cycle, it's best to move through the outer squares versus in the center. Why? Because the center represents a dangerous area where the ratio of gain received to pain experienced is out of sync. This area is called the "Twilight Zone."
Developing great strategy is not enough. As Geoffrey Moore has so elegantly stated, "Regardless of how brilliant or sophisticated the strategy, it has little value if not adopted and implemented."
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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