Crossing the Chasm: What’s New, What’s Not?

January 28 is the publication date for the third edition of Crossing the Chasm. As with the second edition, I have worked hard to preserve the original argument largely intact. The big change is all new case examples referencing companies who crossed the chasm sometime in the past ten years. This should make the book a bit more accessible to the current generation of entrepreneurs and perhaps a fun reread for those looking for a refresh.

Of course, this all begs the question, is the book really still relevant? Business books, after all, are not exactly known for their longevity, and Lord knows the tech sector has changed dramatically in this past decade. At the end of the day, of course, this is not for me to say—but that has rarely stopped me in the past. So here is my cut: Seven things new and seven that are not.

What’s new?

1. Consumer IT. To paraphrase Cheech and Chong, “We don’t need no stinkin’ chasms!” Chasms are a function of required commitments perceived risks. For a consumer on the Web, there are no commitments required, and there are no risks. So a Google, a Facebook, a Twitter, an Instagram—all can (and did) go viral in record speed. In this world, it is “Tornado, or bust!”

2. The Four Gears. New dynamics require new models—that’s why I had to add an appendix to the third edition covering this one. For consumer IT, there are four gears that need to spin up in harmony faster and faster to generate tornado winds. They are Acquire, Engage, Convert, and Enlist. People naturally focus on Acquire and Convert because they are the two that are easiest to measure, but real power comes from the ability of a Web property to Engage users and Enlist evangelists.

3. Cloud Computing. I am thinking specifically of enterprise IT here, and there is no question in this context that cloud itself has had to cross the chasm. But now that it has, and brought along with it SaaS applications and more recently mobile clients, the barrier to entry for next-generation B2B software companies is much lower. The chasm is still there, but it is nowhere near as daunting as it was a decade or more ago.

4. Business Models. The new infrastructure has shifted the balance of power in tech from the product model to the as-a-service model. This has ushered in an era of Consumption Economics (see Todd Hewlin and J.B. Woods’s book of the same name) which also works to modulate the commitment and thus the risk of embracing a new technology.

5. Distribution. In a product economy, getting into distribution, and recruiting distribution partners who could provide the right level of service to your target customers, significantly amplified chasm dynamics. In an as-a-service economy, with the Web providing a ubiquitous distribution channel, there are still plenty of challenges around getting above the noise, but it is no longer anywhere near as hard to get into distribution.

6. Marketing. Social networking and digital media have fundamentally changed the game. In the short term, this is actually creating some “chasm turbulence” as marketers and the marketing industry seeks to reorient themselves to the new realities. But for entrepreneurs who feel at home in the new world, it is dramatically empowering—again, a chasm dynamic reducer.

7. New winners! Of course, that is why I had to revise the book. A new generation wants and needs to reference the companies it grew up with, not ones from a prior era. History is great, but only provided it sustains the narrative up to the present.

Overall, the key takeaways are two. First, crossing the chasm is a B2B model. B2C requires its own treatment, hence the four gears. B2B2C combines the two—and we are seeing a lot of that these days, especially when B2C companies seek to monetize their user traction.

And second, chasm dynamics, at least in the developed economies, have been muted by virtue of layer after layer of deployed technology that mitigates the risk and modulates the commitments a new user must undertake to trial the next disruptive innovation. In effect, disruptive innovation, the engine that drives the Technology Adoption Life Cycle, is becoming less disruptive.

That’s what I think. What do you think?

Next Week: What’s not new?

_________________________________________________________________________

Geoffrey Moore | Escape Velocity | Geoffrey Moore Twitter | Geoffrey Moore YouTube

Photo: Phil Pirrello/IGN.com