Startup University Hi-Tech Marketing How Markets Develop Market Development Strategy

Hi-Tech Marketing Diffusion of Innovations Market Development Strategy

Hi-Tech Marketing The Technology Adoption Life Cycle: Adapt strategy according to the stage in the life cycle Innovators Early Adopters Early Majority Late Majority Laggards Chasm Source: Geoffrey Moore

The Technology Adoption Lifecycle Selling to mainstream customers Diffusion of Innovations

The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Diffusion of Innovations Source: Carnegie Mellon University

The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Diffusion of Innovations Source: Carnegie Mellon University

The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Diffusion of Innovations Source: Carnegie Mellon University

The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Diffusion of Innovations Source: Carnegie Mellon University

The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Diffusion of Innovations Source: Carnegie Mellon University

The Technology Adoption Lifecycle – Technology Adoption profiles Technology Enthusiasts (Innovators) Visionaries (Early Adopters) Pragmatists (Early majority) Conservatives (Late majority) Skeptics (Laggards) Diffusion of Innovations Source: Geoffrey Moore

The Technology Adoption Lifecycle – Technology Adoption responses Technology Enthusiasts (Innovators) Visionaries (Early Adopters) Pragmatists (Early majority) Conservatives (Late majority) Skeptics (Laggards) Try it! Get ahead of the herd! Stick with the herd! Hold on! No way! Diffusion of Innovations Source: Geoffrey Moore

Selling to mainstream customers – The Chasm Chasm Diffusion of Innovations Source: Geoffrey Moore

Selling to mainstream customers – Crossing the Chasm: Establish a beachhead segment Diffusion of Innovations Source: Geoffrey Moore

Selling to mainstream customers – How Markets Develop Chasm Early Market Bowling Alley Diffusion of Innovations TornadoMain Street Source: Geoffrey Moore

Selling to mainstream customers – Implications for Sales & Marketing Customer goal:Competitive AdvantageSolve problemAdopt the obviousExtend paradigm Chasm Customer need:Complete solutionMake safe choiceBetter valuePotential of technology Vendor goal:Segment shareMarket shareProfitabilityValidate technology Strategy:Show ROISet standardsSegment focusDemo the technology Skills:Customer IntimacyClosing dealsRelationship mgmt.Technology proficiency Diffusion of Innovations Source: The Chasm Institute

Learn more – Everett Rogers, “Diffusion of Innovations” – Geoffrey Moore, “Crossing the Chasm: Marketing and Selling High- Tech Products to Mainstream Customers” – Geoffrey Moore, “Dealing with Darwin: How Great Companies Innovate at Every Phase of their Evolution” – The Chasm Institute, “Chasm Methodology” Diffusion of Innovations

Market Development Strategy Market creation variables Market attractiveness variables Market penetration variables Market Development Strategy

– The Market Development Strategy checklist & stage in the TALC 1. Target customer 2. Compelling Reason to Buy 3. Whole Product 4. Partners & Allies 5. Distribution 6. Pricing 7. Competition 8. Positioning 9. Next Target Source of money To fulfill the compelling reason to buy Function of whole product integration complexity For the customer’s money Next move Source of demand Needed for whole product Function of all other factors Relative to competition Source: The Chasm Companion Market Development Strategy

Market creation variables – Target customer Identified economic buyer, accessible to the sales channel, and sufficiently well-funded to pay the price for the whole product – Compelling reason to buy Economic consequences sufficient to mandate any reasonable economic buyer to fix the problem – Whole product Ability (with the help of partners and allies) to provide a complete solution to the customer’s compelling reason to buy Market Development Strategy Source: The Chasm Companion

Market attractiveness variables – Partners & allies Relationships with the other companies needed to fulfill the whole product – Distribution Sales channel in place that can call on the target customer and fulfill the whole product requirements put on distribution – Pricing Price of the whole product consistent with the target customer’s budget and with the value gained by fixing the broken process Market Development Strategy Source: The Chasm Companion

Market penetration variables – Competition Target a space that has not been occupied by another company – Positioning Establish credibility as a provider of products and services to the target niche – Next target customer Potential to facilitate entry into adjacent niches Market Development Strategy Source: The Chasm Companion

Market Development Strategy Target Customer:Visionary functional executive Pragmatist dept. manager Pragmatist technical buyer End-users Compelling Reason to Buy: Fix a broken business process Adopt new infrastructure Better value with no risk Dramatic competitive advantage Whole Product:Standardized application Standardized product Differentiated product Differentiated application Partners & Allies:Recruited for specific product Rationalize to reduce friction Minimum required, ideally none BPR/SI service providers Distribution:Direct sales/VARsHigher-volume, lower-touch Low-cost, high- touch Direct sales Pricing:Value-based, pain motivated Competition-based, pain motivated Value-based, gain motivated Competition:Application vs. application Company vs. company Product vs. productCategory vs. category Positioning:Niche market leadership Market share- based leadership Better experience for end users Technology-based leadership Next Target:Adjacent niche market New platforms, channels, geographies Next micro-nicheAnother visionary in a different industry Source: The Chasm Companion Market Development Strategy

Learn more – Geoffrey Moore, “Crossing the Chasm: Marketing and Selling High- Tech Products to Mainstream Customers” – Geoffrey Moore, “Inside the Tornado: Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets” – Paul Wiefels, “The Chasm Companion: A Field Guide to Crossing the Chasm and Inside the Tornado ” – The Chasm Institute, “Chasm Methodology” Market Development Strategy