How Lessons from Crossing the Chasm can extend your reign


The Chasm, according to Moore, depicts a difficult-to-cross gulf between early market adopters and main street. According to Moore, marketing behaviors that contribute to success on one side of the gulf will flat out not workon the other. To succeed on the east side of the chasm requires a radical transformation. Companies must slough off their entrepreneurial marketing habitsas they arrive on the eastern shores of the chasm.


But it’s not just marketing habits that need to be sloughed off. The Chasm is a dividing line that also separates monumental changes in founder behavior and capabilities as well. The Chasm crossing identifies steep personal challenges Founders encounter in their own journeys towards their ultimate success of their ventures and may inform their own tenure. As such, the Chasm is a bright line to which every founder should pay close attention.


Most founders are quite comfortable on the western (early stage) side of the chasm. Their deep personal involvement as an individual contributor, subject matter expertise, passion for doing whatever it takes to make a sale, and desire to control all of the details, are what drive early company success. But similar to changes required of marketing upon landing on the eastern shore, radical changes in founder behavior are required of a founder who wants to stick around post her chasm crossing.


Why Founders are the Perfect Leaders pre-Chasm

Most entrepreneurial ventures fail. According to a Harvard Business School study by Shikhar Ghosh, 75% of venture-backed startups fail. Yet, there is no lack of founders lining up to try it out for themselves. Is that because founders don’t understand the risks? More likely it is just their outsized optimism, a trait that oddly contributes to their success.


Surveys of founders’ expectations indicate that founders know full well that most ventures will fail. They just don’t believe it will be theirs. A study in 1988 asked founders what the chances were of their venture succeeding vs the chance of a similar business run by someone else. Founders were confident that ventures they lead would have a better — 81% chance of success vs 59% for ones run by someone else. Founders maintain an abundant and refreshing, but off- base confidence that they are unique, different, and capable of distorting reality in their favor.


The founder’s naïve and fervent (egoist) belief in their own capabilities, may be what compels these entrepreneurs to head-first tackle opportunities that both don’t make any rational sense in which to participate and seem to be gamed against them.

Fewer ventures would be initiated if the founder weighed the actual odds of success. But founders who start ventures are often willing to take on outsized tasks, work long hours, and do whatever it takes to succeed. This innocent view can be just the right tonic to enable them to beat the odds.


Disruption Requires a Change Agent

Founders often talk about starting their ventures to entirely change how a market operates. Their identification of potential disruptions can pave the way for changing the fundamental operating assumptions of a market. This disruption doesn’t happen by doing things in a “business as usual” behavior. Founders are change agents. Early-market-adopter customers crave change as well. They want to be the first to adopt a new way to operate, to jump on new technology, to be on the bleeding edge. Founders are perfect for feeding that customer’s need.


Selling the Vision

Well before the product or service is ready for delivery, founders engage in selling the vision. There is no one more adept at promoting a solution that does not yet exist than an articulate founder. Early stage ventures are often not a whole lot more than a vision in the head of the founder as they hire their first employees and raise their early capital. He or she can paint a detailed picture of the creation about to unfold. Getting buy-in from employees, from venture capitalists and then from early adopters, before a product is even close to release, is the specialty of a successful founder.


Urgency

Founders maintain an urgency that transcends all they do. While often requiring herculean efforts of their teams, producing a solution that beats their entrepreneurial competition and catches the embedded competitors on their heels is what is required for a startup to succeed. Being able to convince and lead a team of loyal followers to accomplish something that may not appear possible, bending reality, is what makes a founder so valuable.


Unusual Degree of Company Unity

In order to cross the Chasm, Moore points to the need for an unusual degree of company unity. As the founder assembles and motivates her team to take on the audacious task of establishing a beach head right in enemy territory, the team must be motivated and unified for a single shared purpose. There is no one better than a founder for leading that charge.


Intimate Customer Relationships

In the earliest stages of a market, selling requires a top-level direct approach. This is no place for line level novices who follow a process or an indirect channel. What is needed to make an early market sale is the ability and willingness to listen closely to the prospect, to make quick adjustments and to offer up bespoke terms and whatever concessions are necessary to land the deal. Founders love this. They love the intimate customer engagement. They love the control. They love the immediate reinforcement. They love the control. There is nothing more fulfilling to a founder than receiving a call on his or her cell phone from a customer who is leaning towards adopting a founder’s disruptive product. They love the control. Quick responses and agility are required to make an early adopter sufficiently happy to take a chance on this still unproven product or service. This is something that only a leader-led team, with full authority to promise whatever it takes to make the sale, can accomplish.


The Chasm Changes Everything

The boundaries of the Chasm are not as clearly defined as we might like. But sensing when a company has reached the other shore is critically important. Mainstreet customers who inhabit this new land and predominate the post-chasm population, have drastically different needs, wants and desires than their pre-chasm counterparts. Knowing how and when to change company behavior is important as the market’s complexion changes and number of customers quickly grows.


The transformation of an organization to sell to the larger and more pragmatic mass market requires the organization morph and molt. Like the lobster who must shed its outer shell in order to grow, organizations need to shed their old habits, change out leadership, and dispel many of their original beliefs, especially if all these worked prior to their crossing. Molting requires the founder and her organization, temporarily without the shield of her hard outer body, to take on a new vulnerability as it goes through this transition. Productive behaviors that have produced positive results are hard to give up. Meanwhile, trying a new unproven approach instead will make most founders quite uncomfortable and as vulnerable as the lobster without its shell. Many founders are unable or unwilling to accept this exposure, instead opting to double down on the same behaviors that generated early success. Unfortunately, more of the same often proves fatal.


Delegating Authority

Letting go is something founders are just not good at. What got them across the chasm was personal involvement, tight control and micromanagement over every detail of the plan. But the new challenges on this eastern shore, require just the opposite approach. Without an expanded capable team of delegated-decision makers, it is not likely that this growth trajectory can continue. There is much to do to set up camp on the other shore; much more than the founder herself is capable.


In order to survive on this side of the chasm, the company must change its focus from early adopters to pragmatists. While growing fast from a small base of revenue was sufficiently fueled by these demanding yet fearless purchasers, now the company has to sell to main street pragmatists, who are much more numerous, yet whose demands are different.


Pragmatists seek complete solutions from companies they expect will be around for some time to come. Pragmatists by definition are not risk takers. They are not comfortable with the swashbuckling style of founders and instead seek comfort from teams of specialists, processes and established brands that can service their needs.


One-off Deals are Not Scalable

Pre-chasm, each deal was special and peculiar to that early-adopter customer. Founders are great at making the promises necessary to serve each customer’s needs while their organization scurries to make good on those outlandish promises. This time-consuming and disruptive behavior only works when there are fewer customers demanding special relationships. On this other side of the chasm, successful selling requires delivering an increasing volume of standardized deals that can be produced quickly and profitably. Specials and one-offs quickly become unwieldy. The weight of supporting a growing number of unique solutions can quickly collapse the newly laid foundation.