Geoffrey Moore wrote Crossing the Chasm in 1991. The book is still an important sales reference for technology companies.
Moore says you can rank customers on a technology adoption scale. These customers can be companies, organisations or individuals.
There are five ranks. Moore divides the five into two clear groups and the gap between these groups is large. Or in his words, a chasm.
Moore’s first group are early adopters. They feel they must have the latest technology. This can be about prestige or perceived competitive advantage. They are willing to pay a high price to get hold of technology early.
This high price is important. Technology companies get a big margin which funds further development or marketing.
The next group are visionary customers. They need a product to gain competitive advantage or control costs. They accept immature support and absorb any technology risk.
They’ll pay a premium, often less than the early adopter premium. This allows companies to develop marketing channels and support infrastructures. These are important in the next phase.
Moore’s third phase is the bulk of the market. Moore calls them early majority or pragmatic customers. They look for clear pay-offs from a technology investment. They deliver the profits and locks a technology into the mainstream.
The fourth group are reluctant adopters. They buy mature, proven technologies if there is a sensible business case. They look for commodity products.
The last group are those who may never adopt a technology. There are companies that still don’t use email, mobile phones or computerised book-keeping.
Crossing the chasm
Moore says for any technology to succeed it must cross the chasm from the first two phases and enter the third. It’s an Evil Knievel leap, many technologies can’t make it.
The bridge across the chasm might be technical. It can be about channel organisation or support infrastructure. There are political matters such as establishing a standard or it might come down to old-fashioned marketing.
To pick winners, focus on the product or technology’s ability to cross the chasm between visionary and pragmatic customers.
Besides Moore’s chasm, there are common sense ideas of price and utility.
A product which meets certain key standards can sell. The number sold depends on price and function. A lower price or more functionality means higher sales.
If the first two phases allow a maker to build in enough functionality or reduce price through economies of scale then it’s easier to cross the chasm.
Standards are successful
Standards are a further good indicator of likely success. Yet you need to read the signs.
Many so-called standards are anything but open. Accepted standards aren’t always the ones which prevail. Think of market dominating companies like Intel or Microsoft.
The standards used in a particular product or technology are not always fixed. For example, developers can change a non-standard communications protocol with a software upgrade.
Work, rest and play
Moore started out looking at business technology. The principles also apply to consumer products such as smartphones.1 The rules don’t change much between the suits and the open-neck shirts but their interpretation does.
Building up a head of steam to cross the chasm is harder for makers of consumer hardware. Consumers rarely look for a return on their investment in the business sense. They are less willing to pay top dollar for new products.
Complicating matters further is the way many products now straddle both markets. In some areas the consumer market influences business purchasing strategies. For example, the first customers to adopt the iPhone were consumers.
There’s a clear connection between Moore’s chasm and Gartner’s Hype Cycle. While the two look at adoption from different points of view, both recognise there is a hump to get over before a product or technology can succeed.
In general I prefer not to use the term smartphone, here we need to distinguish modern iPhone-like devices from those that went before. ↩︎
“The tech press has dared to lean away from its core mission of making technology companies more profitable, says tech advocacy house ITIF.”
The ITIF or Information Technology and Innovation Foundation is an industry think-tank. It issued a report looking at “a change of tone in technology reporting” between the 1980s and this decade.
Long story short, it says the media moved from a positive attitude towards the industry to confrontation.
This, according to the ITIF, is because being tough on the industry makes it easier for tech media to turn a profit.
It goes on to talk about the media being ‘biased’ and distorts the public view of technology.
Yes, it’s all stuff and nonsense. There’s a lot to unpack, but here are a couple of ideas to think about.
In the past publishers made money selling advertising to technology companies. They were a great sales conduit. It worked.
The technology industry was the tech media’s most important customer. Rivers of gold poured in.
While there are publishers who publish nice stories in return for advertising dollars, that was never a great business model. Reader are not fooled. They don’t stick around for blatant propaganda.
The advertising money didn’t buy favourable coverage, at least in the better publications. It did foster a favourable attitude towards the industry. The coverage reflected this.
The partnership also meant journalists and publishers spent time in the company of tech industry people. That too is good for creating a positive attitude.
One conclusion of the ITIF report is more advertising would repair media relations.
Readers and journalists
In the old model, advertisers paid for journalism, but journalists serve readers. Few understood this then. They still don’t.
As Nichols says, we’re not industry cheerleaders. We don’t earn cheerleader, public relations or marketing-type salaries.
Our job is to inform readers. If there is more cynicism in technology media (see the next point) then that is what readers want.
Modern reporting tools mean we know what stories rate from the minute they go online. Guess what? Readers are less likely to click on happy-slappy, isn’t everything wonderful darling stories.
In other words, journalists and publishers respond to reader demands.
Don’t shoot the messenger if they now have a darker view of the tech industry. Get your own house in order.
It’s all nonsense anyway
To argue tech media is meaner than it ways, say, thirty years ago is bonkers. The big newspapers and media sites are full of thin press release rewrites. It is common for blatant propaganda to appear as factual news.
Take, for the sake of argument, Computerworld New Zealand. Thirty years ago, even a decade ago, it was breaking news stories. It was quoted in Parliament. Today, it runs nothing that didn’t start life in a public relations office.
That’s not to say all the tech media is soft. It isn’t. But the ratio of soft stories to more hard hitting news is off the scale. You have to wonder if the ITIF is paying attention.
“No-one has the breadth of services and offerings that Microsoft brings to bear in this space”.
— Microsoft New Zealand chief marketing and operations officer Frazer Scott
At Intergen Dynamics Day 2016, Frazer Scott outlined Microsoft’s strategy to help companies with their digital transformation. This is the context for Dynamics 365.
It all boils down to four pillars and three trends.
Scott says we are living through a fourth industrial revolution. Or, as Microsoft describes these things Industrial Revolution 4.0.
He says: “There’s a blurring of the divide between the physical and digital worlds”.
While the trends are big data, analytics and cloud computing, Scott says cloud is the underlying technology. Hence Microsoft’s massive investment in its Azure cloud service.
Microsoft four pillars of digital transformation are:
Engage your customers. Scott says the goal is to have a “market segmentation of one”. This means using analytics tools to mine data for a complete view of each customer. Then gain insight into the customer before giving them a personalised experience.
Empower your employees. Recognise they are mobile and celebrate individual work styles. You need to realise that allowing employees to be more creative will pay off with greater responsiveness. Also use tools to give your staff better insight so they can make better decisions.
Optimise your operations. A modern business needs to be more responsive and agile.
Transform your products. Is about disrupting markets with new products and services, even by introducing new business models. Instead of looking back, you can use data and analytics to anticipate what will happen.
This morning mail from Dick Smith arrived in my in-box.
You may think: “Nothing unusual there”. After all, many people who subscribed to the Dick Smith mailing list will have had the same message.
Yet, I didn’t subscribe to anything from Dick Smith.
Dick Smith’s receivers sent the message to an address I haven’t used since I left Australian in 2004.
While I never signed up to any mailing list, I did give my address to a sales person in a store in Sydney many, many years ago.
At the time, I wanted to buy something that wasn’t in stock. The salesperson asked me to leave an email address and phone number so the store could let me when it had stock.
He assured me the address would not be used for marketing purposes. It was only then that I agreed to hand it over.
This was so long ago I forgot what the product was.
To its credit, the old Dick Smith organisation kept its word through at least two changes of ownership. I just checked that old account. There have been no other communications from Dick Smith.
Yet my address has stayed on the database for at least 12 years. I wasn’t even aware it was there. And the receivers sold it without my consent.
I suspect this is illegal. It may be a breach of contract. It is certainly a breach of trust.
The only conclusion I can reach is that any promise to keep data safe is worthless.
Update: More bad faith from the Dick Smith receivers. The form to opt out asks for my full name, then wants me to confirm my address. That could be just another way of confirming data for the database. There’s no mention of my rights here either.