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by Robert Morris
Business Nugget #49
Geoffrey A. Moore has written two business bestsellers, Crossing the Chasm (1991) and Inside the Tornado (1995), both published by Harper Business. They are most valuable when read in combination. Chasm "is unabashedly about and for marketing within high tech enterprises." It was written for the entire high tech community "to open up the marketing decision making during this [crossing] period so that everyone on the management team can participate in the marketing process." Crossing what?
First, it is important to understand the logic of what Moore calls the Technology Adoption Life Cycle (TALC): "It's underlying thesis is that technology is absorbed into any given community in stages corresponding to the psychological and social profiles of various segments within that community. This process can be thought of as a continuum with definable stages, each associated with a definable group, and each group making up a predictable portion of the whole....[Therefore] whenever truly innovative high-tech products are first brought to market, they will initially enjoy a warm welcome in an early market made up of technology enthusiasts and visionaries but then fall into a chasm, during which sales will falter and often plummet." Moore thus introduces the modern day equivalent of what John Bunyan once described, in The Pilgrim's Progress, as the "slough of despond." Not the place to be.
In his subsequent book, Inside the Tornado, Moore's use of the "tornado" metaphor correctly suggests that turbulence of unprecedented magnitude has occurred within the global marketplace which the WWW and the Internet have created. Moreover, such turbulence is certain to intensify. Several individual Internet "tornados" are identified: one caused by the browser, a second caused by the "explosion" of websites, and a third driven by the demand for web servers and software to create connectivity. Moore suggests that:
Once any infrastructure is substantially deployed, power shifts from the builders -- the professional service firms -- to the operators, or what we have come to call the transaction services firms. The key to the transaction services model is that the requisite infrastructure has already been assimilated (keeping support costs down) and amortized (minimizing ongoing investment). Unfortunately, neither of these conditions is even remotely approximated by the current state of the Internet.
Hence the need to raise enormous amounts of working capital because the most visible, most valuable transaction services companies [eg Yahoo!, America Online, and Amazon.com] continue to operate at extraordinary deficits. Obviously, as in the natural world, turbulence in the business world is disruptive and frequently destructive.
In Crossing the Chasm and Inside the Tornado, Moore helps his reader to understand basic issues such as these:
¥ How effective marketing strategies tactics can help companies to "cross the chasm"
¥ Why company wide involvement and commitment are essential to success
¥ Why the post-chasm enterprise is bound by the commitments made by the pre-chasm enterprise
¥ What the battlefield and the competitive marketplace share in common
¥ How to target the point of attack
¥ How to assemble and allocate resources
¥ Why Main Street is the "sweet spot" for transaction revenues
¥ What the Technology Adoption Life Cycle (TALC) is
¥ What the optimal business model for each is (and why)
¥ How power is distributed by TALC forces such as strategic partnerships, competitive advantage, positioning, and organizational leadership
¥ How to succeed or fail on "Main Street"
¥ How to formulate the most appropriate positioning
¥ What effective organization leadership involves...indeed requires
In Crossing the Chasm, Moore isolates and then corrects what he describes as a "fundamental flaw in the prevailing high-tech marketing model": the notion that rapid mainstream growth could follow continuously on the heels of early market success. Moore enables his reader to understand the interdependence of market focus, consolidation of resources, defining the the terms and conditions of competition, and finally, formulation and implementation of those strategies and tactics which are most likely succeed.
When concluding Inside the Tornado, Moore suggests that "The paradox of trust is that by intelligently relinquishing power, one gains it back many times over. Once you reach your personal limits, this is the only economy of scale that can help. And because hypergrowth markets will push you to your personal limits faster than most other challenges in business, this is the fitting thought on which to close this book." Indeed it is.
Copyright: 2003
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Crossing the Chasm & Inside the Tornado
by Robert Morris
Business Nugget #49
Geoffrey A. Moore has written two business bestsellers, Crossing the Chasm (1991) and Inside the Tornado (1995), both published by Harper Business. They are most valuable when read in combination. Chasm "is unabashedly about and for marketing within high tech enterprises." It was written for the entire high tech community "to open up the marketing decision making during this [crossing] period so that everyone on the management team can participate in the marketing process." Crossing what?
First, it is important to understand the logic of what Moore calls the Technology Adoption Life Cycle (TALC): "It's underlying thesis is that technology is absorbed into any given community in stages corresponding to the psychological and social profiles of various segments within that community. This process can be thought of as a continuum with definable stages, each associated with a definable group, and each group making up a predictable portion of the whole....[Therefore] whenever truly innovative high-tech products are first brought to market, they will initially enjoy a warm welcome in an early market made up of technology enthusiasts and visionaries but then fall into a chasm, during which sales will falter and often plummet." Moore thus introduces the modern day equivalent of what John Bunyan once described, in The Pilgrim's Progress, as the "slough of despond." Not the place to be.
In his subsequent book, Inside the Tornado, Moore's use of the "tornado" metaphor correctly suggests that turbulence of unprecedented magnitude has occurred within the global marketplace which the WWW and the Internet have created. Moreover, such turbulence is certain to intensify. Several individual Internet "tornados" are identified: one caused by the browser, a second caused by the "explosion" of websites, and a third driven by the demand for web servers and software to create connectivity. Moore suggests that:
Once any infrastructure is substantially deployed, power shifts from the builders -- the professional service firms -- to the operators, or what we have come to call the transaction services firms. The key to the transaction services model is that the requisite infrastructure has already been assimilated (keeping support costs down) and amortized (minimizing ongoing investment). Unfortunately, neither of these conditions is even remotely approximated by the current state of the Internet.
Hence the need to raise enormous amounts of working capital because the most visible, most valuable transaction services companies [eg Yahoo!, America Online, and Amazon.com] continue to operate at extraordinary deficits. Obviously, as in the natural world, turbulence in the business world is disruptive and frequently destructive.
In Crossing the Chasm and Inside the Tornado, Moore helps his reader to understand basic issues such as these:
¥ How effective marketing strategies tactics can help companies to "cross the chasm"
¥ Why company wide involvement and commitment are essential to success
¥ Why the post-chasm enterprise is bound by the commitments made by the pre-chasm enterprise
¥ What the battlefield and the competitive marketplace share in common
¥ How to target the point of attack
¥ How to assemble and allocate resources
¥ Why Main Street is the "sweet spot" for transaction revenues
¥ What the Technology Adoption Life Cycle (TALC) is
¥ What the optimal business model for each is (and why)
¥ How power is distributed by TALC forces such as strategic partnerships, competitive advantage, positioning, and organizational leadership
¥ How to succeed or fail on "Main Street"
¥ How to formulate the most appropriate positioning
¥ What effective organization leadership involves...indeed requires
In Crossing the Chasm, Moore isolates and then corrects what he describes as a "fundamental flaw in the prevailing high-tech marketing model": the notion that rapid mainstream growth could follow continuously on the heels of early market success. Moore enables his reader to understand the interdependence of market focus, consolidation of resources, defining the the terms and conditions of competition, and finally, formulation and implementation of those strategies and tactics which are most likely succeed.
When concluding Inside the Tornado, Moore suggests that "The paradox of trust is that by intelligently relinquishing power, one gains it back many times over. Once you reach your personal limits, this is the only economy of scale that can help. And because hypergrowth markets will push you to your personal limits faster than most other challenges in business, this is the fitting thought on which to close this book." Indeed it is.
Copyright: 2003
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