Crossing the Chasm is Scary When You Look Down
I originally wrote this article in April 2022, but have republished it here on Bear. I recently discussed this in more detail on the Commonplace forum.
Summary
Business books put too little focus on the emotional challenges involved in pursuing a business strategy. Crossing the Chasm is a classic example of this.
I recently worked as the head of operations at a startup that failed. We tried really hard to make it work, but couldn’t get our product in the hands of customers quickly enough. No matter what we tried, we couldn’t make the necessary improvements before we ran out of cash.
The company’s mission was to improve quality in factories by detecting defects on parts coming down a production line. Although this sounds simple, it’s actually a super difficult problem — requiring expertise in optics, deep learning, and computer hardware.
I joined about a year before the business went into administration, and one framework I kept coming back to was Crossing the Chasm. In many ways, it felt like it was written for the organisation I found myself in. The book’s subtitle is literally “Marketing and Selling High-Tech Products to Mainstream Customers”, and there is no more mainstream conservative customer base than rural factories in Germany.
Crossing the Chasm’s main message is that your first customers, innovators and early adopters, do not behave like the mainstream market. The early market will buy new technology for technology’s sake and are willing to put up with all the difficulties and frictions your new technology generates. The mainstream market behaves in the opposite way: they only want products that have had the frictions smoothed away and that are designed to fit within their existing processes.[1]
This generates a chasm, which is really a go-to-market gap. The early adopters’ willingness to overlook your product’s shortcomings shields you from the reality of how most customers will view your product. The scary thing is that if you project forward your quick growth in the early market and then run unexpectedly into the chasm... you are going to have a bad time.
The solution in Crossing the Chasm is to pick a single customer segment beachhead in the mainstream market and focus the company on winning that segment.[2] This means aligning all your teams on this beachhead: Product, Sales, Marketing, Operations, Support, Engineering — everyone needs to be on board for this battle.
And you should think of it as a battle. The book explicitly makes the comparison to D-Day, focusing on capturing a few beaches before expanding across France. And it was this comparison to war that highlighted the key weakness of the book and its theory.
If you read a history book about the planning of D-Day that made no mention of the emotional challenge in its planning and execution, then that book is missing something critical. You cannot understand the history of D-Day without understanding the emotions the decision makers had to go through. It’s the same with business strategy books (albeit with much lower stakes). If there is no mention of how to deal with the emotional challenge of executing a proposed strategy, then the book and theory are missing something critical.
This emotional element is particularly important in the case of chasm crossing. To cross the chasm, you are expected to focus all your personal energy — and all the teams in the company — on winning the beachhead segment. You need to run headlong towards the chasm and believe that you are going to sprout wings in time to cross it. Otherwise, you are going over the edge and will crash at the bottom.
The focus on a single goal, and the creation of clear KPIs for winning and losing, generates fear. Before, you could hide behind the complexity of shipping tons of features and products to anyone that would buy them. You could blind yourself to reality by celebrating irrelevant write-ups in newspapers and winning small one-off sales.
Focusing on the singular goal of winning the beachhead segment breeds a realisation that you may fail — and your decisions will be the reason that you fail.
The constant temptation is to find a way to reduce this fear, and sometimes this feeling is so strong you do things that are against your strategy and bad for the company.
You ask your sales and marketing teams to focus on that consulting opportunity that will bring in guaranteed revenue but has little long-term future. You start wondering if you should try a new product feature targeted at a different segment to try and boost growth.
Instead of focusing, you try lots of different things. You give yourself the excuse that by trying many different strategies you are doing everything possible to win. By not focusing on trying to win the beachhead segment, you avoid the possibility of losing.
There are many business solutions to this problem: reduce your burn, do more experiments to reduce the risk, don’t take venture debt that forces you into this position. These all have some truth to them — but sometimes you just need to be brave.
I’ll end with a quote from one of my favourite Tweeters:
Footnotes
- This is talked about as building a “whole product” for the mainstream beachhead market. The whole product means you not only build a product to meet the needs of your market but also build the product so that it works with the market’s existing systems, processes, and products. ↩︎
- The Unicorn’s Shadow by Ethan Mollick makes the better recommendation to aim for two markets, not one. But this doesn’t change the fundamental story. ↩︎