The Chasm

The Chasm

You can get Crossing the Chasm by Geoffrey Moore here:

I want to talk about Everett Rogers

Everett Rogers was a communications studies professor, and in 1962 he published a book titled Diffusion of Innovations. This book talks about how innovation spreads through a community of people by diffusion.

This work grew out of the work sociologists and anthropologists from the late 19th and early 20th century did around agricultural technology. In particular around how farmers adopted hybrid seed technologies.

Rogers talked about how the innovation itself, communication channels, time, and a social system all join together to influence the spread of innovation.

This was summarized in the famous Rogers Innovation Curve. This charts the rate of adoption among different social groups as marketshare increases over time.

Rogers categorized these groups into Innovators, Early Adopters, Early Majority, Late Majority, and Laggards.

The Innovators are those who want to be first to try out a new innovations, and they make up about 2.5% of people.

  • The Early Adopters are the thought leaders. They are the leaders who embrace change and are eager to use new technology to gain an advantage. They represent about 13.5% of people in a market

  • The Early Majority are willing to adopt new technology, but they want to see evidence of it working in the market. They represent about 34% of people in the market.

  • The Late Majority also represent about 34% of people, but they are more skeptical and will only adopt technology when it has been established in a market.

  • Then there are the laggards. They are very resistant to change, and typically will only adopt new technologies when they are forced to, or they become so ubiquitous that they can no longer avoid it.

So why do these studies from the 19th and 20th century matter in the 21st century? 

In 1991, Geoffrey Moore published a book titled Crossing the Chasm which has been very influential among the technology crowd. In this book, he expands on the Diffusion of Innovation Theory and focus on one particular segment, the gap between the Early Adopters and the Early Majority. He argues that this is the most critical piece for the success of a technology.

He sees the Early adopters as leaders within a company, who are often young, new leaders looking to make a name for themselves. They are eager to leverage new technology to move quickly and differentiate, and are willing to take a risk and pay a premium.

He calls the Early Majority the pragmatists, and sees them as a very different market from the early adopters. Whereas the Early Adopters are not particularly price sensitive, the Pragmatists are. They want to talk to others like them who have used the product and have been successful.

It is bridging this gap that he considers the most important inflection point in the growth of a new technology. And because of this these two different markets need to be addressed with very different strategies.

I have seen this play out in the market place before. I have talked with companies whose price points were higher that what the pragmatists were willing to pay, but the early adopters were OK with. They would tell me, “we have a premium product and people are willing to pay for that premium, we have already sold hundreds.” Well, the reality is you probably need to sell thousands if not millions, and the path to that is aligning yourself with the pragmatist market. Eventually, sales start to stall out, and they eventually align their prices and then things really start to take off, but this is often a difficult journey.

Crossing the chasm also gets into other key areas of product marketing and the importance of market segmentation and positioning, but I will post a link so you can read that yourself.

The point is that when I look at emerging tech, having a strong sales and marketing plan and people is critical to a product’s success. In fact, this is where new companies most often fail. I always look to this when identifying the risk of adopting new technologies, and whether it will continue to thrive.

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