Have you crossed the "CHASM" yet?

Crossing the chasm: from early adoption to mainstream market success

What does it mean to "cross the chasm"?

The terms "early adopters", "beachhead" and "crossing the chasm" have been circulating in startup circles, but not many people understand the origins of the terms or realise the meaning behind them.

In short, "crossing the chasm" is a concept popularised by Michael Moore, representing the challenges that startups face when trying to transition from early adopters to mainstream market acceptance in the technology adoption lifecycle curve. The "chasm" refers to the difficult leap between early adopters, who are typically more tech-savvy and willing to take risks, and the early majority, who are more conservative and need more convincing before adopting new technologies.

Many startups are stuck in the chasm without realising it, while many more mistakenly believe they have already overcome this hurdle.

Figure 1: Moore's model for Hi-Tech Adoption Lifecycle Marketing

Common misconceptions about crossing the chasm

Most high-tech driven startups are looking for Early adopters, who are the visionaries, to engage in their pilot projects, and this is where most of the Accelerators are supporting these connections. Some believe that these pilots can get them through to the mainstream market stage, but this is only a stepping stone before the chasm. Pilot projects should serve as opportunities to test, validate, and ultimately determine the key application/use case and beachhead segment. Note that the more use cases present, the more confusing it can be.

To cross the chasm, you need to have a clear and committed beachhead segment and use case. Many startups struggle due to a lack of commitment and the dilemma of waiting for prospects to make decisions, akin to the chicken and egg problem.

Challenges in crossing the chasm: transitioning from Early Adopters to Early Majority

The chasm is the litmus test to determine whether the product will transition into the mainstream market, where the real money is. How long you languish in the chasm is equivalent to how fast you can transition into a full-fledged market-centric vendor while finding clients to help you build out your whole product and pay you money to survive until you are "good enough" in the eyes of a Pragmatist buyer in the Early Majority market.

Figure 2: Shifting from Early Market to Early Majority

The first challenge, where the chasm lies, is in the key shift from the Early market into the Early Majority market. That's when the shock happens. That's when prospects are engaged and educated, but don't buy. An additional challenge occurs when there is an insufficient number of early adopters to meet the total addressable market (TAM) expectations.

The shortfall is that market-centric Early Majority buyers' purchasing decisions are based on a whole different set of criteria. A key difference is that the budget to buy your product at the Early Market stage comes from a capital expenditure (CapEx) budget, whereas in the Early Majority stage, it comes from operational expenditure (OPEX). Furthermore, an indication that you've gained traction in the latter market is to be grouped into a "common category" alongside other vendors. When the category is not yet created, buyers will only end up confused: unless they know what category they're after, they may struggle to locate vendors within it.

Herein lies the opportunity for your startup to design and establish the category which others will be measured against and compete with. But, this is the challenge for the Early Majority stage, which is after you have crossed the chasm.

This article is an excerpt from my newsletter. Subscribe to access the full content and gain early access.

Need help crossing the chasm? Reach out for a chat.