Crossing the Chasm

Geoffrey Moore’s Crossing the Chasm provides another useful framework for thinking about early sales strategy.   Basically, Moore argues that a tech startup’s first customers are early adopters -- customer who buy a product because they want to be the first to have the fancy new technology.

The good news is that early adopters will buy your product early on, even if it has some warts and holes.  That means early revenue, and that's good.

The bad news is that early adopters tend to be a small part of the market.  You need to be prepared to quickly transition to the much larger "early majority".  The early majority are open minded customers,  but they are looking for solutions to business problems, not cool new technology. 

“Early adopters” are not good reference customers for the early majority (the early majority sees early adopters as tech geeks who are not a reliable source of information on the usefulness a product has in solving a business problem).

Early adopters are also very forgiving of product problems, holes, and bugs.  They’ll work with you.  Early majority customers, on the other hand, expect the product to work, and to provide a complete solution to their business problem.

Moore’s proposed solution: focus in on a very specific, small segment of early majority customers (your first “bowling pin”).  Be a “big fish in a little pond”.  Dominate that pond.  Provide that narrow slice of customers with a solid, “complete product” solution.  Something that works perfectly for that type of customer’s narrowly defined problem.  Once you “own” that small segment, enhance the product to address a similar (perhaps a bit larger) adjacent market segment (your second bowling pin).  Provide a solid, complete solution for that new segment, and focus on owning that market.  Then move on to the next bowling pin, and so on.

What that suggests for a startup sales strategy is:

   1. You can get early revenue from early adopters, but...
   2. Keep your focus on choosing that first "bowling pin" market segment
          where you can provide a whole product solution for an early
          majority set of customers

Item 2 requires focus.  It's harder than you think.  It means targeting customers who fit that first bowling pin profile, and not spending much time with customers who do not fit.  A sales force that has commissions as a major part of their compensation will not always have such rifle-shot focus - unless the commission plan is written correctly.