When a new technology first comes out, people line up to try the novelty before anyone else. The media rush to hail it as an innovation, and early sales grow smoothly. Yet many products that get off to such a brilliant start soon see their sales drop off sharply and disappear from the market. That is because there is an invisible, deep gap on the road from the enthusiastic few to the ordinary majority. This gap is called the chasm.
A chasm originally means a deep ravine formed where ground or rock has split apart; in business studies, it refers to the stretch in which demand for a new technology product stalls or drops sharply before it moves from the early market to the mainstream market. The American management consultant Geoffrey Moore popularized the concept in his 1991 book Crossing the Chasm, and today it is used as a basic concept in strategy for startups and new businesses.
This article explains, in easy-to-understand terms, what the chasm means and the diffusion of innovations theory it is based on, why the gap forms, strategies for crossing the chasm, and real examples along with points to watch out for.
How the Chasm Works and How to Overcome It
What Is the Chasm?
The chasm starts from the observation that people who adopt a new product do not all move at once. Each person adopts new things at a different pace, and those differences divide the market into several groups.
(1) The diffusion of innovations theory
In 1962, the American sociologist Everett Rogers described in Diffusion of Innovations how new technologies and ideas spread through society using a bell-shaped curve. Moore refined this model for high-tech markets and called it the ‘technology adoption life cycle.’ The bulge in the middle of the curve means that most people adopt new things neither too early nor too late.
(2) Five groups of consumers
The technology adoption life cycle divides consumers into five groups according to the order in which they adopt.
- Innovators: People who love technology for its own sake and try it first, making up about 2.5%.
- Early adopters: Visionaries who want to get ahead of others with new technology, about 13.5%.
- Early majority: Pragmatists who buy only once something has been proven, about 34%.
- Late majority: Conservative consumers who move only once something has become the standard and prices have come down, about 34%.
- Laggards: People who resist new things to the very end, about 16%.
Why Does the Chasm Form?
Moore believed there are small gaps between each of the groups, but that the gap between early adopters and the early majority is especially deep and wide. That is because the two groups buy products for completely different reasons.
(1) Those who buy a vision and those who buy proof
Early adopters buy because they see future possibilities, so they willingly put up with inconveniences and flaws. The early majority, on the other hand, dislike risk and open their wallets only when they see proof that people like them are already using the product successfully.
(2) A lack of reference cases
Pragmatists trust recommendations from people in the same industry most of all. But a product entering the mainstream market for the first time has no such cases yet. Because no one buys first, no cases emerge, and because there are no cases, no one buys, leading to a dead end.
(3) The illusion of the early market
Success with early adopters makes a company euphoric. Believing it can keep selling the same way, it adds people and money, but the mainstream market responds in a completely different way. The moment sales suddenly drop, many companies run out of money and close their doors.
How Do You Cross the Chasm?
Moore compared crossing the chasm to the Normandy landings in World War II. Instead of attacking along a broad front all at once, you should concentrate your forces on a single narrow stretch of beach and secure a foothold first.
(1) Targeting a beachhead market
Pick one narrow customer group whose problem is most pressing and focus on it until you are the clear number one in that market. Fully dominating even a small market produces the trustworthy references and word of mouth that pragmatists look for.
(2) Delivering the whole product
Pragmatists want not just the core technology but a package that solves their problem all the way through. This package, complete with installation, training, after-sales support, and compatibility with other products, is called the whole product.
(3) The bowling pin strategy
Once you have won the first market, you extend that experience and reputation to neighboring markets. The recommendations of customers you have already won and the whole product you have built up are used directly to open the next market. The strategy is named after the way the front bowling pin falls and knocks down the pins behind it one after another.
Where Can You See the Chasm?
The chasm appears not only in high-tech markets but almost anywhere a new service spreads.
- Electric vehicles: The slowdown in sales growth after early buyers' enthusiasm cooled, due to charging infrastructure and price burdens, is often explained in terms of the chasm.
- Smart glasses: Products that drew a lot of attention are often cited as examples that failed to find a clear use and so never made it into the general consumer market.
- Enterprise software: Building success stories in one industry and then expanding into similar industries is used as a classic strategy for overcoming the chasm.
However, the chasm model does not fit every product exactly. The proportions of the five groups are approximations modeled on the normal distribution, and some products are readily adopted by the majority from the start. The model is therefore best used as a map for reading the market rather than as an answer key.
The chasm shows that good technology alone cannot win over the majority. For the enthusiasm of the few to turn into the trust of the many, you need a process of building solid proof, starting from a small place.
Securing solid ground on which to plant your foot: that is the first step toward growth that crosses the deep gap.
