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chasm analysis for citydesk

I read Crossing the Chasm as suggested.  Very enlightening book. Unfortunately with enlightment comes the knowledge of ones sins.

I am in much confusion about selecting market segments. As an example, let's use citydesk.

Is citydesk still in the early market category? Or is it trying to cross the chasm into the earl majority. I can't really tell from the site. I am guessing early market because citydesk seems generally targeted. A specific target market doesn't seem to have been selected.

If one was being selected would you want to target something like add agencies that produce web sites, fortune 500 intranets,  software developers who need web sites, or
something different?

Any selection seems frustrating in what is not selected, yet you can't cross the chasm without selecting.  Would the citydesk website change to include specific text about the target segment or would it stay the same?

valraven
Tuesday, September 16, 2003

Early market.

From what I've seen, version 1.0 wasn't marketed really at all. Everything was word of mouth, and driven some off of Joel's personal site. I'm not sure how much advertising they're doing for 2.0, which they more or less bill as a flesh-out and polish job on 1.0 it seems. Joel seemed to indicate some time ago that 3.0 would be their first majorly pushed version of the software, and will include a lot of new functionality over 1.0 and 2.0.

Brad Wilson (dotnetguy.techieswithcats.com)
Tuesday, September 16, 2003

Joel said that the 1.0 wasn't going to be marketed at all (more or less... JoS is free advertising) and that 2.0 would be marketed heavily.

Well 2.0 is really 1.5 and now 3.0 is the one that's going to be marketed heavily... So CityDesk is very very early in it's market segment too...

So what does this teach us about Crossing the Chasm?

Mark T A W .com
Tuesday, September 16, 2003

It's one thing to say it will be marketed and another to know what target market to select.

valraven
Wednesday, September 17, 2003

I read the book - and I am puzzled about early to market regarding the Content Management space.

There are over 2000 content management vendors out there - in all shapes and sizes.

So I am not sure if CityDesk can be considered as entering a new market i.e. crossing the chasm.

Could anyone elaborate if the above is a valid analogy?

Ram Dass
Wednesday, September 17, 2003

The early adopter has a business dream. Early adopter is a change agent. By being the first to implement they expect to get a jump on the competition, lower production costs, faster time to market, more complete customer service, or other business advantage.

Across the chasm is the early market  which are pragmatists. They want to buy a productivity improvement for existing operations. Looking to minimize discontinuity with old ways. Not debug someone elses product.

Assumably citydesk has a feature set that appeals to some set of early adopters. In what segment would it appeal to the early market?

This is a problem for a lot of software because software is
in every segment to some extent.

valraven
Wednesday, September 17, 2003

The "chasm" model is not a good fit for retail/shrinkwrap class software products.

rick

rick chapman
Wednesday, September 17, 2003

Why is that, Rick?

!El gato es muy gordo!
Wednesday, September 17, 2003

+++Why is that, Rick? +++

First, you have to realize there's nothing new about this model.  It was first developed in the 60s and 70s and was known the product life cycle model.  Product managers at Ashton-Tate were trained on it. 

Moore popularized it with a punchy title and made a mint.

(Wish I'd thought of that!)

I don't want to spend too much time on this. but most product life cycle (PLC) models break markets down into four or five stages, ie, early adopter, late early adopters, main stream, etc etc.

Moore's "chasm" postulates that between early adopters and the mainstream market there's a period in which the market must be presuaded to adopt a product en masse.

The only trouble with this model is that in many many retail categories it never made sense.  Take word processing.  In 1978 MicroPro comes out with WordStar, by 1983 the company is worth about $70M.  And that was just one company.  In 1983 there were probably over 100 different word processors on the market or in development.  People's acceptance of word processing was almost instantaneous; you didn't  have to sell them on the concept.  Ditto for spreadsheets.  Ditto for databases (simple ones).  Ditto for presentation packages.  Ditto for lots of other categories.

What did occur, of course, was consolidation, but the reasons companies failed or succeeded had little to do with market acceptance or a "chasm."  MicroPro destroyed itself internally (they get their own chapter in In Search of Stupidity.)  Multimate's product had severe technical limitations (also in ISOS).  WordPerfect mishandled development at a crucial juncture (also in ISOS).  Etc, etc.

The chasm model works better for large mega apps that require a direct sales force and much time and effort justifying a big, expensive sale.

rick

rick chapman
Wednesday, September 17, 2003

In school we were also taught something like the life
cycle adoption model. That in itself is not very useful.
The book is much more detailed about the characteristics of each group. How to cross the chasm was new to me
as well.

Still using city desk as an example, it is not a new product
category that has clear appeal. It enters a market with
a lot of competition. That to me qualifies as a chasm. Or maybe early adopters are sufficient revenues for a small company that has not problem staying small.

valraven
Wednesday, September 17, 2003

+++Still using city desk as an example, it is not a new product
category that has clear appeal. +++

It is not a new category, correct.

The product is selling, so clearly it appeals to some people.

+++It enters a market with a lot of competition.+++

That would be a further indicator of this category's appeal.

It would also indicate that it's not the technology that people are hesitant about, it's the companies.

+++That to me qualifies as a chasm. +++

Not in the classic PLC model.  It indicates that different companies are fighting it out for dominance at different levels of the market.

This further complicates things.  Cdesk is a PC application for small to mid-sized companies.  Vignette is a mega app for big companies.  Then there are hosted solutions.

What is the "chasm" for a retail app? You're not running the proper mix of marketing programs?  Is that why you fail?

Or is because the market decides hosted solutions are the way to go. 

A big monster?  You didn't assemble a good direct sales force?

Or MS eats the category by building it into Windows?

rick

rick chapman
Wednesday, September 17, 2003

The idea is that a market segment is a group that refers to
each other in buying decisions. My focussing on a particular
segment you make use of this network effect. By
arranging your segments like a set of powling pins you
also create a network effect between segments. Without
a beach head that concentrates efforts you will try
to be everything to everyone and not make headway
anywhere.

That's my take on the theory anyway. Wouldn't it make
sense for citydesk to concentrate on a particular segment
rather than diffuse their efforts? I am still not sure why
you think otherwise.

valraven
Wednesday, September 17, 2003

+++That's my take on the theory anyway. Wouldn't it make
sense for citydesk to concentrate on a particular segment+++

I'm not sure I understand how you define "segment."  Could you tell me more?

rick

rick chapman
Wednesday, September 17, 2003

It's not my definition, it's in crossing the chasm.
I think the definition was as i stated, a group that
refers to each other when making buying decisions,
which is not the definition we had it marketing
class, but does make more sense.

valraven
Wednesday, September 17, 2003

+++a group that
refers to each other when making buying decisions,
which is not the definition we had it marketing
class, but does make more sense. +++

It's been a long time since I read the book and I wasn't a huge fan.  Moore got a lot of facts wrong.

Do you mean segmented by verticals?  Industry segments?

By title?

Job function?

rick

rick chapman
Wednesday, September 17, 2003

Rick, i'll let you try to redefine into your own terms.

valraven
Wednesday, September 17, 2003

Well, when selling a retail app, you would have to judge whether its a "broad horizontal," (word processing) or perhaps a narrow one (desktop publishing, Cdesk.)

Then you might decide that within a narrow segment you would target by job title (web designers) or perhaps purchasers of related products.

You could decide to target by vertical industries: newspapers.  Then by type of industry: small regional newspapers.  Then by job title: web designers at small regional newspapers.

Does this mean the technology needs to cross a "chasm" or that you need to get out and market and sell your stuff in the belief that once people see what you can do there won't be much resistance to your product/service?

It depends.

And sometimes, you've built something you thought people would buy and you do everything right and it turns out they just don't really need it.  And you'll never "cross the chasm" no matter what you do.

rick

rick chapman
Wednesday, September 17, 2003

Ah ok, I know what "crossing the chasm" is now.

You make a timeline (axis x) and plot sales (axis y). You'll get something resembling a bell curve. You figure out what 1 standard deviation is and segment everyone off that way.

Then you name each segment.

Innovators - 2.5% outside of 2 standard deviations
Early Adopters - 13.5% outside of 1 standard deviation
Early Majority - 34% - 1 standard deviation
Late Majority - 34% - 1 standard deviation
Late Adopters - 13.5% - ouside of 1 standard deviation
Laggards - 2.5% - outside of two standard deviations

I think we've all been around enough to recognize a fairly typical bell curve & know what all these terms mean without definition. The famous study here involved farmers adopting a new strain of corn in the 20's and 30's.

So this Chasm thing says that it's an uphill battle marketing your product in the early stages (big surprise). How do you get from 16% of your potential customer base to 50% after which it's a smooth downhill ride. How do you get from 2.5% to 16%?

In other words, how do I triple my market share? How do I get twice the people who've already purchased my product to purchase it now?

Great. Now we're all on the same page. People who have been reading this thread going "What's a chasm? Am I stupid?" can now know that they're not stupid, and contribute (hopefully) meaningfully to this thread. We know what these segments are, and we know what they mean.

While I agree that you have to identify your target market, as rick says is it broad or narrow? In either case, you'll probably still encounter this same market segmentation. Whether you're Vanilla Coke or CityDesk, you can pretty much always bell curve your population in a dozen different ways.

I also agree with rick that this is something people use to reassure themselves that their product WILL make it, "only 3 people use our product, we're still in the Innovators stage," even though there is no real need for their product.

My question to you now is: What is a Chasm Analysis? What does one look like? You want us to DO one with CityDesk but I don't think anyone here knows what one looks like except you. Tell us. How do we recognize what segment are buying our products now? How do we "analyze" how to get to the next segment where six times the people who currently own it will want to buy it?

Mark T A W .com
Wednesday, September 17, 2003

+++In other words, how do I triple my market share? How do I get twice the people who've already purchased my product to purchase it now?+++

Can't provide a blanket answer to that.  It depends on your market and your product.

+++What is a Chasm Analysis? What does one look like? You want us to DO one with CityDesk but I don't think anyone here knows what one looks like except you.+++

A Chasm Analysis would identify what aspects of your product  are most likely to be resisted by buyers, why, and develop a sales and marketing program to overcome these resistance points.

+++How do we recognize what segment are buying our products now? +++

For retail?  By developing offers targeted to different audiences and tracking things like registration information.

For software sold via a direct sales force?  The process is self qualifying.

The "Chasm" process is a self sustaining one, in theory.  Identify resistance, overcome it, sell.  Once you sell enough you develop enough visibility in the market that people buy your product because their peers have.

You now enter the "mass" market.

rick

rick chapman
Wednesday, September 17, 2003

rick... thanks for your answer, as always it was very informative.

I'm trying to get the original poster to tell us what a "chasm analysis" is - The market resistance you mentioned isn't "crossing the chasm" whatever that is. As you said, defining and eliminating market resistance is an ongoing process, but crossing the chasm is something, it seems, you only have to do twice.

Mark T A W .com
Wednesday, September 17, 2003

+++The market resistance you mentioned isn't "crossing the chasm" whatever that is. +++

Well, yes it is.  The central theme of "Chasm" is that companies face SPECIAL resistance to technology because, it's, well, technology.  Changes things around, shakes things up.

There really isn't anymore to a "Chasm analysis" than what I told you.  It's basically a sales and marketing analysis.

Nothing new; new wine in old bottles!

You know, like how in the 80s it was "solution selling" and now it's "customercentric" selling?

Marketing!

rick

rick chapman
Wednesday, September 17, 2003

Rick,

I haven't had a chance to read ISOS yet, but I have read "Crossing the Chasm" and your earlier "Product Marketing Handbook for Software" book ( http://www.aegis-resources.com/software_marketing_millennium_edition_pg.htm ).

By your own admission, there are many pitfalls (and suffocating costs) awaiting the uninitiated in selling retail software.  I'm wondering if the success examples you cited above (WordStar, spreadsheets, small databases, and presentation packages) were heavily capitalized in the beginning, or were they organic ( http://www.joelonsoftware.com/articles/fog0000000056.html ) companies?  I honestly don't know - but I was wondering if you thought this distinction might make a difference WRT crossing the chasm?

Dave Smith
Wednesday, September 17, 2003

++I'm wondering if the success examples you cited above (WordStar,)++

MicroPro was lightly capitalized.  VisiCorp basically grew organically but sued themselves to death.

Lotus, for its time, received a nich chunk of VC but by today's standards it was chump change.

SPC was organic.

Harvard Graphics, later SPC, was organic.

MS: Organic.

Borland: Organic

AT: Pretty organic

The first examples I can recall, at the moment, of companies receiving a fairly large amount of money as part of the startup cycle were the integrateds.  Aura, Ability, people like that.

But these programs never "crossed the chasm" because no one wanted them (or not enough).

rick

rick chapman
Wednesday, September 17, 2003

>I'm trying to get the original poster to tell us what >a "chasm analysis" is

I had to fit something in a title :-)
My intent was to discuss application software in the
framework of crossing the chasm. Citydesk was just a
good example of software that has appeal but not
instant mass appeal.

valraven
Wednesday, September 17, 2003

+++I honestly don't know - but I was wondering if you thought this distinction might make a difference WRT crossing the chasm? +++

BTW Dave, I'm not saying you an alway grow organically.  Sometimes you can; sometimes no.  One risk you run with an organic strategy is that you grow nice and steady, you hire step by step, you grow the market and then someone steps in behind you with a big borrowed bankroll and blows you out of what you thought was a comfortable situation.

That's what Lotus did to VisiCorp, BTW.

One of the reasons to borrow money is to build your business to a size where you can prevent that from happening.

But this wasn't a "chasm."  It wasn't a question of whether companies wanted spreadsheets; they did.  No one had to sold on spreadsheets. They just wanted the best spreadsheet and that was Lotus.  At least everyone thought so!

rick

rick chapman
Wednesday, September 17, 2003

+++Nothing new; new wine in old bottles!+++

Uh, make that old wine in new bottles.

rick

rick chapman
Wednesday, September 17, 2003

> Well, yes it is.
>
> There really isn't anymore to a "Chasm analysis" than
> what I told you.  It's basically a sales and marketing
> analysis.

I mis-read you. After I hit send I knew what your next post would look like... correcting me. You seem to like to do this.

rick, something about your tone is mildly off-putting to me... Maybe it's me, maybe it's you, I'm not sure. I get a certain arrogant "smarter than thou" attitude from you. Like I said, you're very informative. I just get a certain feeling from your posts... like I have to be careful what I say because you're ready to pounce on any mis-step, and point out any incorrect statement.

========

> I had to fit something in a title :-)
> My intent was to discuss application software in the
> framework of crossing the chasm. Citydesk was just a
> good example of software that has appeal but not
> instant mass appeal.

LOL. I guess this was a discussion for people who'd read the book, and I'm intruding.

In any case, my take on it is that the Fog Creek guys know who their target market is, and have been fairly successful at going after it without a lot of obvious marketing. I.e. Joel on Software, interviews on TechTV, a generous referral program (50%), etc.

> A specific target market doesn't seem to have been
> selected.

"Until now, only large corporations could afford content management systems, which ran on expensive servers. Small businesses, schools, and individuals were stuck manually coding every page and laboriously transferring them to a web server. But CityDesk is an affordable, full powered content management system (CMS) that you can run on your own computer.

"Whether you're creating a big city newspaper with hundreds of journalists, a club newsletter that comes out once a month, or even a personal weblog, CityDesk lets you add, edit, and remove new content, and it's no harder to use than a simple word processor."

- http://www.fogcreek.com/CityDesk/index.html

1. Small businesses, schools, and individuals
2. big city newspaper with hundreds of journalists, a club newsletter that comes out once a month, or even a personal weblog

========

Sorry guys, I'm in a bad mood right now. It's purely biological... it was something I ate.

Mark T A W .com
Wednesday, September 17, 2003

+++rick, something about your tone is mildly off-putting to me+++

Well, I'll tell you what.  I won't post to you anymore.  People have a right to believe what they believe and I don't want to disabuse them of that.  If you wish to believe that an analysis of the points of sales resistance in a market isn't a "chasm analysis," that is certainly your right and I won't upset you by telling you it is.

rick

rick chapman
Wednesday, September 17, 2003

Joel is, IMO, currently executing a very smart marketing plan for CityDesk.

Version 1 was picked up by the techies that read Joel on Software. They're usually software folks, they're happy to get in early to beta test an interesting new application, and they're knowledgeable enough to provide useful feedback on bugs, features, etc. They're also fairly forgiving of usability problems and bugs in a Version 1 product, because they can see past them to the underlying benefits the software provides. They know it'll get better over the next version or two.

Many of these techies showed CityDesk to friends and colleagues, which resulted in more sales but still to fairly techie people.

Joel looked after these early adopters by providing free patches and upgrades, and even upgraded all the CD 1.0 Home users to CD 2.0 Pro for free. He knows these people are a valuable asset to him, and he works hard to earn their loyalty.

Around the time Version 2 came out, Fog Creek seemed to be stepping up their VAR programme. Some of the early-adopting techies started using CityDesk to set up web sites for charities, community groups, clubs, family businesses, etc that they were involved with. They recognised the ease with which they could set up a site and hand it over to someone less technical for ongoing maintenance.

So Fog Creek released 2.0 Pro for the techies to set up CityDesk sites, and an affordable 2.0 Contributor for people to use to maintain those sites once they were up and running. The VARs are happy - it's quick and easy to set up new sites once you've done a few, which means you can offer low prices. The small businesses and other VAR customers are happy - they get an affordable site, and they can edit and add to it themselves with an easy to use desktop application. They only need to go back to the VAR if they want a site redesign, or want some advanced scripting done.

Of course, some customers don't want to use CityDesk at all. They just want to email web site updates to their web site company. CityDesk makes this sort of arrangement easy to manage too.

Because the VARs are constantly handing over sites to their customers, Fog Creek is constantly selling more copies of CityDesk Contributor edition (and giving the VARs a cut of the action).

CityDesk requires no server-side components; sites built with it can run on any kind of web server. This is very good for customers on a budget, who don't want to pay extra for a host that can give them these features.

So to answer the original question about 'crossing the chasm'...

Fog Creek is targetting a previously-neglected market segment. There are a lot of very small businesses and organisations out there who feel they need a web presence. Until now, they either couldn't afford a commercial CMS, or didn't have the technical skills to set up a cheap/free CMS.

Fog Creek is making inroads into that market segment by doing all they can to help their VARs sell to those organisations at a price level they can afford. Once web designers realise they're being undercut by CityDesk VARs using a better tool, and start seeing 'made with CityDesk' sites all over the place, more and more web consultants will become CityDesk VARs.

And the best part is, Fog Creek doesn't have to spend tons of money on advertising or salespeople. They can just keep doing what they're good at, and let the VARs sell their product.

Fog Creek listens to its users, and I think the release of CD 3.0 is going to mark the 'knee point' in the sales graph, where CityDesk begins to become a mainstream web site building app.

Darren Collins
Wednesday, September 17, 2003

So how do VARs work with CityDesk? Is it just an item
in a catalogue?

BTW, i have ordered rick's book so that may help.

valraven
Thursday, September 18, 2003

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