The B2B XR Chasm: what it is and how to survive

In this article I am going to address a major issue that all disruptive innovations are likely to encounter (“The Chasm”), I will explain how that relates to B2B #XR, and give you some practical tips on how to use this knowledge to your advantage. 

Anytime we are introduced to products that require us to change our current behavior or force us to rethink the status quo we are in front of disruptive innovation. Experience teaches us that when this happens, people’s response and perception could be clustered in 5 psychographic profiles. Each group has psychology and demographics that makes its purchasing decision different from those of other groups. Understanding each profile and how it differs from the others, provides a critical foundation for crafting a story message that resonates with them.

To explain this concept, I want to take #XR as an example.

  • Innovators pursue new technology aggressively. Developers or enthusiasts who got their hands on the #Oculus DK1 and started playing with it even before a formal marketing program has been started belongs to this group. They are often driven by their passion for innovation and technology regardless of the function it is performing.

  • Early adopters, like innovators, buy into new product concepts very early in their life cycle. They are people who find it easy to imagine, understand and appreciate the benefits of new technologies. People who purchased an HTC Vive, an Oculus Rift (or to some extent a #PlaystationVR) fall into this category.

  • The early majority is driven by a strong sense of practicality. They share some of the early adopter’s ability to relate to technology, but they are willing to “wait and see”. That means that before buying they want to have well-established references to help them make a decision. This is the market Facebook is trying to break into by launching headsets such as the Oculus Go and more recently the Oculus Quest.

  • The late majority shares the same behavior of the early majority with one major difference: they are not confident in their skills in handling technology products. Consequently, they wait until the innovation has turned into an established standard. Looking for an #XR analogy for this group is impossible since we are still too early on the adoption curve.

  • Laggards simply don’t want to do anything with new technologies and are never going to buy for a wide variety of reasons. (Do you see your grandma climbing a ladder to set up lighthouses?)

As you have already noticed in the drawing I made you can see a clear gap. That is what Geoffrey A. Moore calls “The Chasm” and is crucial for two main reasons:

  1. It is a representation of the remarkable differences between the two psychographics that surrounds it (early adopters and early majority)

  2. It is encountered at a stage where for most companies it will determine whether they will manage to scale up (and break into the early majority) or fail (trying to cross the chasm).

The whole “chasm” problem is due to a set of differences that could be summarized in one simple sentence: “early adopters do not make good references for the early majority”. Let me explain.

I am an early adopter. I bought the HTC Vive at launch and I will never forget the number of hours spent trying to set the floor to the right level, testing exponential variations of cables and ports to connect the pc to the linkbox and dismantling my left controller to have the damn trackpad working again. This is what early adopters do: they spend countless hours trying to get products to work that, in all conscience, should have never been shipped in the first place. Early adopters have the skills to match up an emerging technology to a strategic opportunity, translate that insight into a high-visibility high-risk project/purchase, and the charisma to get the rest of their organization to buy into that decision (or in my case convince my wife #VR was going to be amazing). From a professional standpoint, this class of visionaries tend to be recent entrants in the executive ranks (they are often not going to stick around for long) and are motivated by a dream. The value they associate to the purchase is not given by the technological advancement but rather from the strategic leap forward such technology can enable. They will work with vendors who have little or no funding and will believe in products that are not much more than a sketch on a whiteboard. The hard side of this is that early adopters are easy to sell but hard to please. Their “dream” might always remain a dream since it will require the melding of numerous technologies, many of which will be immature or even non-existent. 

Early adopters like to buy pre-assembled packages, with everything bundled at a heavily discounted price. They want high-tech products to work like refrigerators: open the door, light switches on, the food stays cold and you don’t have to think about anything else. Without surprises, this is exactly the direction Oculus has taken with the Go and the Quest. Early adopters see themselves in present-day and value deeply the experiences of their colleagues in other companies. They expect extensive references and many of them have to come from companies in their own industry segment. 

Given the numerous differences, it is not surprising why pragmatists are reluctant to reference visionaries in their buying decisions. Hence the Chasm.

The first thing you have to do is be aware of such phenomenon and qualify every stakeholder involved in the project to understand on which side of the chasm they stand. A zealous young brand manager of an innovative firm is going to pursue aggressively the launch of an AR marketing campaign, while her digital marketing specialist who has been optimizing google ads campaigns for the past decade, will see all sorts of obstacles to make this a success. Both of them will influence the final outcome and addressing exclusively who supports the buying decision is a recipe for disaster. To help you out, I made a set of 30 questions to qualify your prospects on a series of topics among which their familiarity, dream, and budget. Do not be afraid to ask difficult questions and always remember that the better you recognize and address the different psychographic in the meeting room, the higher your chance of closing the deal.

If you realize you are dealing with a crowd of early adopters remember that, due to their (sometimes) unachievable dreams, managing expectations is crucial. First, is important to understand the visionaries’ goals and give them confidence that your company will stand up to the task. In the middle of the #sales cycle, you need to be extremely flexible about commitments as you shape the scope of the project. In the end, is important to negotiate carefully while keeping the spark of the vision alive without committing to features that are unachievable within the time and money agreed. 

Another advice I can give you is to consider splitting the “vision“ into smaller phases that could be repackaged to someone with less ambitious goals.

But I am sure if you are still reading at this point you don’t want to learn only about how to deal with early adopters and want to figure out a way to breach into the early majority. Sadly there is no silver bullet. Geoffrey Moore’s book “Crossing the Chasm”, offers a much more detailed strategy to survive the disruptive innovations’ market. I will summarize some key points below but I want to wholeheartedly recommend you to read his book from cover to cover. Given the previous considerations on a pragmatist’s brain the plan is “simple”: 

"The only goal of a company on the verge of the chasm should be to secure a beachhead in a pragmatist mainstream customer niche that is referenceable."

 That means that, instead of focusing on a unique dream that will lead to unique demands for customization resulting in an overburdened development team, we must ensure the customer completely satisfies his buying objective. This is done by providing the “whole product”. An example could be to bundle your training experience with headsets ready to be shipped and deployed at the customer premises. Provide continuous and automatic updates to the customer online shop for every new product launch (something we pride ourselves at #Binkies3D given the hundreds of new phones released every year). Listen to your clients and understand what are their needs because if you are targeting a very specific niche ( something Geoffrey also STRONGLY recommend) those might be the needs of others as well. 

This is certainly a lot to take in! So let’s make a quick recap:

  1. Early adopters and Early majority’s buying motives and processes are very different and you cannot sell to them in the same way.

  2. Early adopters are easy to sell but very hard to please. Develop a robust selling process that "keeps their dreams alive" but doesn’t drive you mad.

  3. Selling to the early majority will require you to develop the “whole product” AND have numerous peer references in the same niche.

If you need to improve your message and #sales process to cross the chasm do not hesitate to get in touch. I offer both Sales support and Pitch coaching to startups and tech entrepreneurs in the #XR space.

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