Meet the original creator of the chasm concept
For every innovative product, strategy or idea there are pioneers or originators who aren’t recognized or acknowledged as the true creators of that innovation. For example, laptop and mobile computers are everywhere these days, but very few people remember that Adam Osborne was the original creator of the first portable computer.
The same thing is true for the market-development framework that is widely discussed in Silicon Valley, known as Crossing the Chasm. The Chasm concept was first developed by Lee James, a senior executive in Portland, OR who worked for the high-tech consultancy Regis McKenna Inc.
Technology Adoption Foundation
The Chasm phenomenon itself was first recognized and presented as a market strategy in 1988 by a senior executive at Regis McKenna Inc. named Lee R. James. [Note: Lee James was also the person who created the Right Turn on Red Law while working at the Federal Energy Administration during the 1970s oil crisis, using his innovation-adoption skills to encourage conservation.]
It all started in 1988, when James noticed that high-tech products don’t follow the same pattern of adoption as other non-technical products. He observed that high tech products often struggle to gain mainstream acceptance, and even fail, even though they are initially well received. The products attract great interest and have early success—then they stall out. James identified the point of greatest peril in the development of a high-tech market as a transition from an early market, dominated by early adopters to a mainstream market dominated by a large group of customers who are realistic and practical. James labelled this phenomenon “the marketing chasm,” and the framework was further refined and tested by James’ colleagues at RMI, Bert Desmond in Portland, OR and Warren Schirtzinger in Seattle, WA.
Geoffrey Moore, who also worked for Regis McKenna Inc., had started to write a book called “High Tech Marketing, Changes in the Game.” When Moore learned about the chasm framework developed by Lee James, he co-opted it, made it the central theme of his book, and claimed he was the inventor.
This Crossing the Chasm summary presents internal documents and faxes from Regis McKenna Inc. that show Mr. James and his colleagues were using the chasm framework in client engagements in early 1989…over two years before a book by the same name was first published.
Crossing the Chasm is an adaptation of a market development model called Diffusion of Innovations. Sometimes referred to as the Technology Adoption Lifecycle, it is a model that describes a market’s acceptance of a new product in terms of the types of consumers it attracts throughout its useful life. It is probably the most well established model in “new product marketing” because it provides useful insight at all stages of market development.
The underlying thesis of the Diffusion of Innovations model is that innovations are absorbed into any given user base in stages corresponding to psychological and social profiles of segments within that user community. The process can be represented by a bell curve with definable stages; each associated with a definable group, and each group making up a predictable portion of the whole community.
The prescription for success in introducing a new product or technology into any community is to work the curve from left to right, focusing first on the innovators, growing that market, then moving on to the early adopters, growing that market, and so on. To do this effectively, it is necessary to know and understand the psychological characteristics of each group of buyers.
The psychographics of each group in the adoption process influences the development and dynamics of the market. For example, each group places a different value on product intangibles, and on endorsements or references from other groups. As products move through the adoption process, intangibles and user references assume more importance. Often, pioneering new products lose their initial prominence because a new entrant is more successful in product positioning based on a more effective mix of intangibles. This can be the case even if the second product is not technically superior.
The concept of dynamic change in the perceptions of products is reinforced by the concept of the adoption process. In 1957, researchers at Iowa State College were able to track the diffusion of information and purchase patterns of a new product: hybrid seed corn. They found that purchase and use (or adoption) behavior fell into understandable patterns. They found that five “segments” of an adoption population could be described. They noted the different characteristics of persons in these five groups, and hypothesized about the way word-of-mouth influences purchase behavior.
Five groups were identified as follows:
• Innovators–2.5% of the population
• Early Adopters–13.5%
• Early Majority–34%
• Late Adopters–34%, and
The research demonstrated a number of elements of purchase behavior, including the dynamic nature of how products are purchased. Innovators, for example, are motivated by being first, while late adopters are primarily interested in a bullet-proof product.
The primary value of the research was the development of the idea of a “diffusion process.” New product acceptance could finally be understood and even diagramed.
Crossing the Chasm Summary
Crossing the Chasm is a theory that seeks to explain how, why, and at what rate discontinuous ideas and technologies are adopted. It is fundamentally a study of the psychological characteristics of buyers.
Whereas the technology adoption lifecycle implies a smooth transition from early adopters to the early majority, Lee James discovered that instead of that being a graceful transition, there was actually a gap — because early adopters have very different values than people in the mainstream. And many of the tactics that initially lead to success will work against you in the next phase of market development.
Moving from early adopters to the mainstream early majority requires a complete shift in focus. The key to this shift in focus is moving from visionary to pragmatic. And many of the things that made you successful in the first part of the market will cause failure in the mainstream market. It will be necessary to change your: value proposition, marketing, product focus, distribution, positioning messages, and communications.
Crossing the Chasm Weaknesses
Because adoption rates are based on psychological profiles — personality, values, opinions, attitudes, interests, and lifestyles – the exact point at which a technology penetrates a given group, or crosses the chasm, can be very difficult to measure. And it is important to recognize that Crossing the Chasm does not say that transitions from one group of buyers to the next are smooth or well defined.
Many organizations use a technology adoption curve that indicates early adopters are on BOTH sides of the chasm. This is because exact buyer-transition points are nearly impossible to identify. So be careful when trying to pinpoint the specific date or timeframe in which a market chasm has been crossed.