Crossing the Chasm Whats New Whats Not Disruptive

Crossing the Chasm What’s New? What’s Not?

Disruptive Innovation What Makes High-Tech Marketing Different? • High Risk • Unproven products and promises • Incompatible and incomplete infrastructure • Social resistance to change • Low Data • No product history • No company track record • No best practices 2

3 rs to va gg La ar ds L (C ate on M se aj rv or at it ive y s) (P rly ra M gm aj at ori ist ty s) Ea isi Ad on o ar pt ie er s) s (V rly Ea no In The Technology Adoption Life Cycle The Challenge Facing Every Disruptive Innovation

Innovators - Technology Enthusiasts 4

Early Adopters - The Visionaries 5

Early Majority - Pragmatists 6

Late Majority - Conservatives 7

Laggards - Skeptics 8

9 r or s at ds ar gg CHASM La a (C te on M se aj rv or at it ive y s) L r (P ly ra M gm aj at ori ist ty s) Ea l (V y A isi d on o ar pt ie er s) s Ea no v In How High-Tech Markets Develop The Technology Adoption Life Cycle MAIN STREET TORNADO EARLY MARKET BOWLING ALLEY

Life-Cycle Metrics that Matter Tracking Performance Relative to the Chasm • Early Market • • In the Chasm • Cannot support yet another big-bet commitment • Pragmatists still holding back from entering the market Taking the Beachhead • Nailed a high-pain segment-specific use case • Getting strong word-of-mouth support within target segment In the Bowling Alley • • 10 Additional use cases coming on board, viral in adjacent segments Inside the Tornado • • One or more flagship customers making big-bet commitments Horizontal “killer app” -- hyper-growth in the category On Main Street • Hyper-growth subsides – pecking order established • Customers seek sustaining innovation going forward

Crossing the Chasm Two Key Principles • • 11 Target a “beachhead” segment • Highly focused approach to “rekindling the flame” • Niche market with an intractable problem, not solvable by conventional means • Process owner is under pressure to find a solution • Pragmatists are willing to consider disruptive approach Commit to provide the “whole product” • Bring all the ingredients with you • Complete solution to the intractable problem • Typically involves products and services from partners and allies • Lead vendor takes responsibility for ensuring customer success

Crossing the Chasm What’s New? End User IT! • Digital Services • • Light to deploy, focus on user experience The Lean Start-Up Minimum viable product, rapid agile learning In consumer use cases, leap to the tornado • Critical Success Factors: The Four Gears • • 12 Acquire Engage Convert Enlist

Tipping Point for B 2 C Markets The Four Gears Model Power Gear + = Virality o = Retention - = Churn Performance Gear ACQUISITION ENLISTMENT Starter Motor CONVERSION Performance Gear 13 ENGAGEMENT Power Gear

Four-Gears Metrics that Matter Tracking Performance Relative to the Tornado • Acquire • Rate of gaining new users • Engage • Average length, depth, and frequency of user engagement • Convert • Percentage of total users that participate in business model • Enlist + Virality (New customers coming from existing customers – high NPS) - Churn (Existing customer defecting – “de-enlisting” –low NPS) 14

Slowest Gear Theory • Thesis • Prior to the tornado • At any given point in time • One of the four gears is slowing the other three down • Actions Required • • • 15 Identify the slowest gear Focus everyone on speeding it up Maintain attention on the other three gears Repeat every quarter until The tornado happens Or you run out of gas

Crossing the Chasm What’s Not New? Enterprise IT! • Taking the Enterprise Digital • • Heavy to deploy, focus on end-to-end systems Crossing the Chasm Minimum viable whole product (add partners and allies) Bowling alley strategy • Critical Success Factors • Pre-chasm ─ Breakthrough projects with top-tier customers • Post-chasm ─ 16 High value use cases with compelling reasons to buy

Target Market Initiative Framework A Checklist for Crossing the Chasm Planning Key sponsor 1. Target Customer 2. Compelling Reason to Buy Key motive Complete solution 3. Whole Product 4. Partners and Allies Manages sales & fulfillment complexity 5. Sales Channel 6. Pricing Legitimate alternatives 17 Maps to all the above 7. Competition 8. Positioning Next growth segment Fill in the gaps 9. Next Target Core differentiation

The New Examples • • • 18 Salesforce VMware Aruba Lithium Rocket Fuel Infusionsoft Mozilla Box Workday Target Market Whole Product Partners & Allies Positioning

New Examples from the Room 19

Key Takeaways 20

Thank You gmoore@geoffreyamoore. com twitter. com/geoffreyamoore http: //linkd. in/Yn. Bwig 21