Latest / Giant Robots Smashing Into Other Giant Robots / 248: Crossing the Chasm (Geoffrey A. Moore)
Transcript
- Chad Pytel: This is the Giant Robot Smashing Other Giant Robots Podcast, I'm your host, Chad Pytel, and today I'm joined my author of Crossing the Chasm, as well as many other business and marketing books, Geoffrey Moore. Geoffrey, thank you for joining me. Geoffrey Moore: Hi. Chad Pytel: I'd love to have a conversation with you about some of the things in Crossing the Chasm, and, I know that you work as a consultant now, as well, right? Geoffrey Moore: Yeah. Chad Pytel: I'm specifically interested in how you originally wrote Crossing the Chasm, specifically about high-tech industries. How does it apply to other industries, if at all, and how might it apply to consulting? Geoffrey Moore: The whole idea behind Crossing the Chasm was based on the technology adoption life cycle, and that model says that when you introduce disruptive innovation into any community, it will self-segregate into different adoption strategies, and you kind of referred to them. What we call the early market has two adoption groups in that cohort; the technology enthusiasts who are in for just the excitement around the technical work, and the visionaries who see the opportunity to re-engineer the world in some way, dramatically different. Mark [Andresan 00:01:36] was more of a technology enthusiast, Jeff Bezos, more of a visionary. Steve Wozniak was the original technology enthusiast at Apple, Steve Jobs was the visionary. Both of them move ahead of the heard. One, because they're technologically confident, one because they're more business confident, but neither of them look to their peers for guidance. They look to themselves for guidance. The mainstream market doesn't work that way. Most people were saying "Look, this isn't my field." The first group, and the early majority, on the other side of the chasm were called the pragmatists, and they were followed by the conservatives, and eventually, the laggards. But all three of those groups look to reference points, to other people for advice when they're adopting things. The pragmatists in particular use peer referencing a lot. You always hear word-of-mouth marketing, the most powerful form of marketing, well, that's because pragmatists need to talk to each other before they make buying decisions that have risk associated with them. Of course, disruptive innovation creates risk. The chasm was that gap between the people that were willing to go ahead of the curve, because they trusted their own judgment, and they kind of identified with you. Simon Sinek's got a wonderful Ted Talk, and one of the lines in that thing is for an early-adopting company, or an innovative company is your goal is not to find a customer who needs what you have. Your goal is to find a customer who believes what you believe. There's a lot of that in the early market. When you move to the mainstream, now you really are looking for a customer who needs what you have, and they're reluctant to buy in until they've seen everybody else do it, so they say things like "Not ready for primetime." You know, "I want to do a pilot." You know, "Can you give me references?" Data, data, data. Of course, at that point, you don't really have a big reference base, et cetera. The idea behind Crossing the Chasm was in order to get the movement started on the other side, you need to get an initial cohort of pragmatists to buy in. The key idea there was pragmatists in pain are willing to take much more risk than a pragmatists with options. The notion of looking for pragmatists who were saying "I am not up against" ... For example, right now, when are people going to adopt machine learning or AI, or any of the collaborative filtering or whatever? Well, different industries at different times, but retail right now is in pain because Amazon's attacking it directly. Chad Pytel: Right. Geoffrey Moore: You would expect the retailers to make more disruptive innovation choices now than they would any time soon. The pragmatists in pain are the ones who say "Look, if this disruptive innovation can solve my problem, can get me out of pain, then I'm willing to take a risk on it, but only if you, technology vendor, will commit to solve the entire problem instead of just shipping me your problem and saying 'Good luck.'" In other words, the key to Crossing the Chasm was to the technology vendor who had never had to do this before, with the early market, the customer met you halfway. Sometimes even more than halfway. With the pragmatist, the pragmatist can't meet you halfway, they don't have the competence, and they don't have the orientation. You have to meet them 100% on their turf, which means you have to bring what we call the whole product. Not just your product. That was the key to winning their success. Once you got it started, once you could get the market started on the other side of the chasm, it would grow organically, because other companies would come in, they'd want to help build the market with you, and eventually, get into other niche markets, and eventually, you could get into mass markets, or whatever, and all of that could happen organically, if you could get that first beach hit on the other side of the chasm. Chad Pytel: Let me give you a specific example that resonates with me from what you've just said, which was I thought about what we do is we typically build the first version of a product. We are a integrated design and development studio that works with founders or people at larger companies who want to get outside their walls and build a new product. We typically go from concept to launch, or we help improve an existing product by using those same strategies. We typically have not had project managers. We, instead, have designers and developers who work directly with clients in a self-managed way. Very small teams, and our customers, we explicitly, sort of how we sold it was "We want you to learn these skills about how to manage your own product, and so we're not going to have a project manager involved in between you and the designers and developers, because we want you to learn how to do that, and to meet us halfway." That really worked for the people who want to be directly involved in what we're doing and on the team with us. As we move into bigger organizations and bigger projects, even though our team size might not be different, their expectations for what we're going to do and where they were going to meet us are no longer that. They want the whole product, as in, project management, as well as design and development services. That really resonates with me. Geoffrey Moore: Yeah, it does, it's true, and by the way, what's interesting about those two models, I'm pretty familiar with a company called IDO; which it's not that different a business. Chad Pytel: Yeah. Geoffrey Moore: There's two ways to play this game: one way is to say "You know what, you should never cross the chasm." You should say "I'm going to limit the growth of my company, our model was really the model" ... By the way, you have kind of an ignition model, Salesforce has a process they call ignite, which is very similar ideas. You're really trying to catalyze the customer, as opposed to outsource innovation from the customers. That second group wants to really outsource their innovation to you. That's what they're saying. Either one's a real business, but I think they're very different businesses. Thinking about just where you came from, and knowing a little bit about the IDO culture, there is a case for saying "You know, you don't have to try to build the world's largest business." You can say "We can do beautiful work and keep ourselves at a certain size." That's what we did at my firm. My firm, we never grew my firm. We had three different firms, each one got about 10 people each. They're still all ongoing concerns, and I've pulled back in the last few years and I'm sort of chairman emeritus, but the point is, we wanted to keep the immediacy, we call our firm Catalytic Consulting. We help people apply frameworks to their problems, like the chasm framework. That's a cool business to be in, but it doesn't scale. It doesn't create these huge projects, and research projects. It's a conscious choice. If you do choose to cross the chasm, then I think you involve project managers, then I would just be careful to say, I would have two very different business templates, and I would ask account managers to say "Which template are we using with this client?" Because I think you'll have different people and different rhythms. By the way, your pricing should be different. Chad Pytel: Yeah, are early adopters typically willing to pay more, or are they not? Geoffrey Moore: Well, it has to do with whether it's your response to the technology enthusiast or the visionary. Chad Pytel: Okay. Geoffrey Moore: The technology enthusiast typically does not want to pay more, they just want to get the knowledge, and actually, they think it all ought to be free. Freemium, by the way, is a way to get technology enthusiasts into the market. Visionaries are actually going to pay more if they get the absolutely best, and more importantly, they get it fast and they get it first. When they're making a big bet and they're going fast and first, they'll actually pay up. The pragmatist is actually thinking of you as a trade-off against their internal capabilities. Part of the problem the pragmatists have in this new world, though, is everything is going digital all at once. They can't get the talent in-house. Chad Pytel: Right. Geoffrey Moore: You're seeing a lot of pragmatists and [inaudible 00:09:34] saying "We're so far behind digital, we just need help to catch up." Chad Pytel: Yeah, and we're seeing that, and that is not ... A lot of the things that you talk about in terms of what the sell cycle, what the message needs to be to those people and everything, really, really resonates. I mean, that is what we're saying. It's like you have a transcript of the phone call. Geoffrey Moore: Well, the thing is, what's going on, and part of the thing that's made it so challenging for folks outside of tech right now, because it used to be that technology was about the business. Now we're realizing, "No, no, it's the fabric of the business." I mean, the whole fabric of society is moving to a new hybrid of digital and physical, where digital has a much, much more central role to play. And because of cloud and mobile and the API structure and the container structure and the microservices structure and all these things coming up, you can build out much faster than you ever could before. You can kind of mash up the enterprise the way we used to mashup on the web. So, as a result, these things, they're taking much longer, and particularly, the traditional companies who have a lot of on-premise legacy software systems, that move where you're trying to integrate a legacy on prem infrastructure with a cloud SAS infrastructure. That's a really painful move. Anybody who started their business post the cloud and post SAS doesn't have to do that, they just have an extraordinary advantage over these other companies. The companies, they have money, they have big IT departments, and they're really in a very tough spot. I think there's a huge demand for people to come in and help them get into this new digital infrastructure as fast as possible. Chad Pytel: Yeah, there definitely is. One of the things that we arrived at in the conversation with Seth, or I arrived at is the realization is that we had, in some ways, I think a lot of ways, actually, put off crossing the chasm and staying working with early adopters by growing geographically, so we stayed small for the first nine years, we were 20 people just in Boston, and we really resisted growing because we didn't know how to be the kind of company offering the kind of things, and having the fulfillment in our work and be bigger. And, then we hit upon "Well, if we actually looked at it, most of our customers, especially the ones we've really enjoyed working with and were most fulfilled by, we were working locally with them." And so, instead of thinking about what a 100-person Thought Bot looked like, and how terrible that might be, we said "Well, we know exactly what a four-person and a 10-person, and a 19-person Thought Bot looks like. It's great, and we can see that most of our business is centered around the Boston area." What if we replicated that and created another great Thought Bot in another market? That was, in essence, sort of our niche was geographic. Geoffrey Moore: Where did you go next? Chad Pytel: Well, we went to San Francisco, and Stockholm, Sweden, because there was someone at Thought Bot who wanted to move there. That, actually, Stockholm didn't work out for us and San Francisco has, but when we first went to Stockholm, early signs were, this is going to sound familiar to you, we got a bunch of people who knew about Thought Bot and were waiting to work with us there, and we thought that those early sales successes meant that we were going to grow. We hired a team so that we could match the size of the work. Geoffrey Moore: Like page 19 in Crossing the Chasm, right? Chad Pytel: Exactly. Yeah. Then, those early customers went away. We finished the work for them, and we didn't have new customers lined up, and we really had no channel where they were coming in to us, we hadn't built the reputation that scaled to people who had never heard of us before, and, there is one thing, the market in Sweden tends to be very pragmatic. We just weren't connecting with them, and ultimately, didn't have the customers and the sales to make it work. Geoffrey Moore: The way in which the book would imply that you ... First of all, you could say "Okay, maybe we picked the wrong city." San Francisco worked, Boston worked, they're obviously tech centers. You say "Well, maybe Austin." Chad Pytel: Now, we're in Austin and New York. Geoffrey Moore: Yeah, New York. Chad Pytel: And actually, Raleigh, North Carolina as well. Geoffrey Moore: Okay, so, you've now figured out "If I'm going to play the early market strategy, I need to be where the technology industry itself is, because they're kind of that point of the spear." The next step, if you wanted to go up, and where I'm spending some of my time now is technology disrupted industries where basically, they've been put on notice the way Uber is putting on the transportation industry, Airbnb and hospitality. Amazon, obviously, and retail, and now the issue is it's a different problem, though, they're not trying to create a highly differentiated offering. What they're trying to do is catch up to a disruptor. We call it seeking differentiation, which is what your company has largely helped support, to-date. You will be selling neutralization. Neutralization says "Just get me to a point where people" ... Be Google Android, you don't have to be IOS. Just be Google Android. You don't have to be the McIntosh, just be Windows. Just be good enough that I can play the game, and I'll play, I'll win with something else. I won't get from you what I win with, I'll get from what you what lets me get back in the game. That's a very different offer. By the way, I liked the same thing you did for my competitor. In other words, pragmatists want to but the same thing, whereas early market customers always want to buy a different thing. Chad Pytel: Yeah, actually, we have a sort of implicit promise to our customers that we won't work with their competitors. Geoffrey Moore: That's the visionary promise. Chad Pytel: Yeah, exactly. Geoffrey Moore: Yeah, it doesn't do very good if you differentiate me, if you then go take my differentiation to my competitor. Chad Pytel: Right. Geoffrey Moore: Which is why I said in some ways, you could say "Look, this is a great model, we are only going to work on differentiation, which means we're largely only going to work with early adopters, which means we're probably going to stay in the tech centers, and then the issue is, and this is where IDO is actually being challenged. IDO, like you, had a marvelous technological sort of source of innovation, and for them, it was called designed thinking. Chad Pytel: Yeah. Geoffrey Moore: Designed thinking now has become, everybody and his mother puts out a sign that says "Designed thinking." Chad Pytel: Yep. Geoffrey Moore: They're having to reinvent themselves in order to stay early market, because otherwise, the other thing that they could do, and I hope they don't, because I think it's fair just to stay early market, would be to say "Well, we could go mass market with the designed thinking, but then, that's going to look a lot like Martha Stewart going to Kmart, you know that kind of stuff." It's interesting. There might be this intermediate one of "Well, we do mostly early market, but we also do Crossing the Chasm rescue missions for industries that are under direct attack." Chad Pytel: Yeah, how do organizations, or maybe even individual founders deal with that tension? You know, I'm certainly feeling it, the episode that went out, I had founders who know me and founders who don't e-mail me and say "This resonated with me so much." I think we are all feeling that tension when your organization might be trying to cross the chasm. How do you get over that? How do you deal with that? Geoffrey Moore: Okay, it's interesting, because I spent a bunch of time in the venture community. There is a couple of things to do it. It is a rare founder that is both the early adopter and the person who wants to take to the scale. Bill Gates was, you know, Larry Ellison was, Steve Jobs was, most aren't. One classic response ... Now, in the venture capital world, there's a kind of complicit commitment when you take the funding that you're going to take this thing across the chasm and scale it. That's kind of what you do. Often what the founder does is say "You know what, I'm not the CEO of the scaled company, that's not what I love, I'm not a manager, I'm a leader, I'm not a scaler, I'm an inventor." You often see them go to CTO, that could be incredibly productive if it works, if it feels good. You also see serial entrepreneurs who say "You know, we're going to take it across the chasm, somebody's going to scale it, I'll own a significant piece of the equity, when we liquidate the company, I'll take that, and I'll go back and I'm going to do it again." They just go back over and over again, and they invent company after company after company by doing that, and that's a second pattern. The third pattern is to say "I want to stay with this thing and we're doing it organically." The consulting company doesn't typically raise venture capital. Chad Pytel: Right. Geoffrey Moore: In that situation, I think you get to a point where you say "Okay, I need to find an organizational structure that supports the goals of not only myself, but, the community that we've pulled together here, because it's not just you." I don't hold everybody back, on the other hand, I still am able to leverage the things that I'm good at, and I thought in the case of IDO, the interesting thing they did is they said "Look, in each of these geos, we want to find a lead designer, who is kind of like a micro-CEO." Let's call him a general manager. You say "You build this thing, and by the way the culture of your city may be different than the culture of our city, but our core values should always be the same." The issue around values versus ... That structure would be loosely coupled. By the way, you wouldn't try, in this model, you want to make sure your margins are always good enough that you don't have to endure an optimization mode. Because in an optimization mode, you're going to go to some more rigorous organizational structure which is going to demand more standardized disciplines, and it's going to kind of get away from that, that sort of boutique-y feel, that I'm sure you still have and probably value. By the way, Marc Benioff, I spent a bunch of time with Salesforce. He wrote a book called Behind the Cloud. In that book, he has a little management method called V-2 mom. Vision, values, methods, obstacles, and metrics. And, actually, they use that at Salesforce to this day. They brought it from eight billion to 10 billion, they used the same five things. The way it works and the way it might apply to a company like yours, or like mine, because I do a V-2 mom now for myself, every year. Chad Pytel: Okay. Geoffrey Moore: The vision is what are we trying to become here, and the values are two or three values that both we think appeal to our customers so they're kind of why they want to work with us, but they're also values that we would not violate no matter what. Even to accomplish our methods. It's kind of like both inspiration and guardrails, that idea. I think getting your values clear, for me, at least, is incredibly important. I make sure I'm always acting in a way that furthers that. Then, the methods are "What are you going to do this year to achieve the vision and the values, and the idea there is if it's not a method, it's not going to happen. Or at least, you're not making any commitment to it happening." Anything you're committing to making happening should be a method, and each method is tied to an obstacle, or one or more obstacles meaning what is the most likely thing to defeat me if I were not to achieve this method, and then metrics, how will I know if I got there? If you scale, what happens as an individual, is, obviously, you own all your methods, you own all of the obstacles, you own all of the metrics. If you are in an organization, that has three or four, or five methods, you may say "Harry, method number one, Harry is the leader for it. Method number two, Sherry. Method number three, Gary, Larry, and Barry, right?" That's what Marc does. Marc will have maybe eight to 10 methods. He'll have eight to 10 executives, then the executives will get that method, they build their V-2 mom around that method, they have a subset of methods, they delegate it to their ... You can see how it kind of cascades down through the organization. What's great about that is if you join Salesforce today, you will have a V-2 mom and you will be part of some, your boss' method, it's part of their boss' method all the way up. It's a cool structure, and what I like about it, in terms of this founder issue you're talking about is I think the choice of values, the vision, the values and the methods, by being very thoughtful about those, you can shape the company without having to manage the company in a highly detailed sort of hands-on way. Give people more freedom. Chad Pytel: You said you do that yourself? Geoffrey Moore: I do that myself. I started writing my own V-2 mom. I actually probably have ... Hold on a minute, I have it right here. Let me read you from the front. This is my V-2 mom for 2017. Vision: A Zone to Win, which is my latest book becomes a go-to management framework for helping enterprises from all sectors meet the challenges and embrace the opportunities of digital disruption. I have two other things: Wildcat Venture Partners, which is a venture firm that's kind of spawned out of a prior firm, will become a top quartile venture fund. I'm a venture partner there, I support them. I continue to serve as a trusted advisor to CEOs for whom I have the highest respect. That's my vision, that's what I want to do. The three values were "Serve the world by enabling tech companies to have their maximum benefit impact. Support and empower the people I work with so, to be their best selves and generate exceptional revenue." Those are my three values. Then I have a bunch of methods, and each method has obstacles, et cetera. Chad Pytel: Yes, thanks for sharing that. That's great. Geoffrey Moore: Oh, cool. Chad Pytel: You mentioned that you've made the conscious choice not to grow and be huge, right? Geoffrey Moore: Yes. Chad Pytel: In all of the businesses and I presume that's still the case now. Geoffrey Moore: Yes. Chad Pytel: Generate exceptional revenue is one of the ... Geoffrey Moore: Yes. Chad Pytel: How do you reconcile those two things? Geoffrey Moore: Raise your bill rate. Chad Pytel: Okay. Geoffrey Moore: No, to be absolutely fair, what I've learned about the kind of work that I do and my colleagues have learned the same thing about their businesses, it's Catalytic Consulting, in the sense that what we're really trying to do is change the effectiveness of the client group by inserting ourselves and our frameworks and not outsourcing work at all, just, I suspect, in some ways, very similar to what you're doing. Chad Pytel: Right. Geoffrey Moore: What you learn about that is that you become powerful as an individual not as a group. It's like an individual singer, you know? The singers don't become more powerful by adding four or five people to their act, that the singer is powerful personally. Because you get more and more experience, it's like playing chess. You get more and more experience with looking at the board, understanding what it is you're seeing, helping people do pattern recognition on what's going on, and so, your ability to advise and also to pressure test their ideas by questioning them at the right points. You've seen this movie so many times, after a while you kind of know where to poke your finger. Then you just ... You're trying to actually minimize the time with the client because it's like going to a doctor's office, you don't want to spend time at the doctor's office, you want to go to the doctor's office to see if you can spend time with your life. Nobody wants to spend time with a consultant, really. It's like come on, let's do whatever we got to do to get out of your way. It's a lot of fun, obviously, as you know as well, the exceptional, right ... What happens also, in tech is particularly because I'm associated with a venture firm, but I've also been associated with a lot of start-ups, you can do things like take stock options, you can get carry and venture firms. I mean, there's ways to generate exceptional revenue without building a large company and selling it. Chad Pytel: That was one of your values, not your methods, and so, by having it a value, then you have to reconcile with all your other values, then your methods might be stock options in the things I'm involved in, so that you're not compromising your values in order to achieve one of those. Geoffrey Moore: Right, in fact, any time you're compromising your values, you've just set yourself backwards. Value is actually the energy that bring you into the world and let the world pull you into their world. If you want to see an example of the opposite at work, you might look to Washington DC at this moment. Because it's just a complete mess and it's a complete mess because the values, they're all over the floor. Yeah. Chad Pytel: Right. Geoffrey Moore: By the way, the thing I saw in the paper today, Wells Fargo has got yet another scandal, and you know, you think "How the hell did we get off the rails that badly?" Well, because somewhere along the line, we really did compromise our values, and, as they did it, Volkswagen/Audi with the admissions. Chad Pytel: Right. Geoffrey Moore: That's just very, very dangerous. Chad Pytel: You mentioned your latest book, Zoned to Win? Geoffrey Moore: Yeah. Chad Pytel: You've written a lot of books since Crossing the Chasm, right? Geoffrey Moore: Yes. Chad Pytel: How do you come up with the ideas? Where does it come from? Geoffrey Moore: Kind of the way I try to think about it is I find a problem that I think is a really tough problem, it's bothering people, they're stuck on it, they're kind of trapped, they're frustrated, the performance isn't working very well, and there is no obvious way to solve it, because obviously will try stuff for a while. You just staple yourself to the problem and say "I'm not going to let go. We're going to take this thing to the end." The latest problem, Zoned to Win, actually Crossing the Chasm, but in the context of being an established enterprise. The reason why that's a different problem is that when you give a startup that challenge, and then you give funding to a startup, they know exactly what they're going to do with that dollar. When you give them money, they know exactly where they're going to put it, they only have one place to put it, and they're either going to win or lose with that thing. When you go into an established enterprise, and they want to take on the next big wave of technology, there's a lot of conflict about what to do with the next dollar. Particularly if you got to go through a J-curve, which is what the book's about. Where you say "Look, if you're going to catch the next wave, you're going to lose a bunch of money before you make money." You don't have venture capitalists anymore. This is now money that's coming out of your operating budget, and at some point, it's going to actually put your existing businesses at risk, because there's not enough money to do both. With most companies, what they've been doing in that situation is they start, on the new wave, they get halfway on to it, it's too painful, they worry, they pull back. Chad Pytel: Yeah. Geoffrey Moore: You've seen it in your clients, I'm sure, all the time. Chad Pytel: Yeah. Geoffrey Moore: This is a thing of saying, that's the worst thing you can do. It'd be much better not to try to catch the wave at all, than to get halfway on and get off. Chad Pytel: Right, right. Geoffrey Moore: We're talking about how to actually work. The subtitle is organize to compete in an age of disruption is how did you actually organize a large company to successfully catch the next wave. Chad Pytel: Not that everything builds upon Crossing the Chasm, right, but are some of the techniques similar, about figuring out how to apply them to the context of the larger enterprise? Geoffrey Moore: It's interesting, the techniques are identical, the problem is not the technique, the problem is the resource allocation. It's actually it's an organizational and budgeting problem and what happens in large enterprises is that the next generation incubations get started, they actually get nurtured, but if they try to scale, they then end up competing with the existing businesses for resources, and that's where they get lost. Chad Pytel: That ties directly into what I was going to ask about, because, not exactly resources, but attention as a resource, and also marketing, a lot of what Crossing the Chasm focuses on is customizing your marketing message to be very specific to your positioning, and, we even feel this, and we're not that big. It's like "Well, what about this? What about this aspect of the company? What about this?" You know, it's hard to focus your marketing, when you want to be all-encompassing, I imagine that's hard for bigger companies to really focus on "No, this is the new thing we're doing and the marketing needs to be very focused towards this." Geoffrey Moore: There are two kind of very sort of fun topics here, this sort of, let me mention each one. The first one is you want marketing to be about you, the thing you have to remember is nobody ever cares about you, ever. I mean, your mom does. Your mom, maybe, you'll hopefully have a spouse, maybe have some kids, but in the world, if you make your marketing about you, you're going to lose. Chad Pytel: Right. Geoffrey Moore: You have to make your marketing about your customer, and it's got to be a narrative about their life, and then how do you fit into their life, and what do you bring into their life? You do get to talk about yourself, but only in the context of the customer dialog, and so, I don't know if you ever saw it, but 10 years ago, Microsoft did a hysterical self-parody video about if they had designed the iPod box, to market the iPod, and the box gets more and more complicated, it has offers on it, it's got all, it's got the complete specs of the product. It has a fold-out piece, it goes on, and on, and on, because it's taking about themselves, right? One thing about marketing is you just have to realize, we have this speech about yourself, but it has to end up on the editing floor, by the time you're done. You could say it, but get it out of your face, and remove it. The other thing then, is, when you look at the more challenging thing, we do "Okay, I got over that." There is still an issue of saying "You know, well, hang on, though, should we be marketing the new thing? We've got a lot of these successful consulting lines that we should continue to sustain. How do we do that?" That's where the zones came in. What we wanted to say is "Look, there are two clear zones of performance in the company, one around sustaining the existing lines of business, and one about incubating the new lines of business, and they need to be managed separately, because the new lines of business need to have their own voice, and that voice will not be the voice of the established lines of business, because this is the next generation. No kid wants to sound like his dad, right? You know, I want to be different, and, I need to be different, and so having that ability to have that second voice, and that's fine by the way companies handle that fine as long as that second voice is little and kind of at the peripheral. When you try to scale that second voice, and now, all of a sudden, it wants to join hands with the existing business and become part of the establishment, as it were, that's when you have the challenges. That's where the CEO's leadership becomes ... The CEO has to say "Look, we want this thing to happen, we know we're all going to have to change our tone of voice in some way. We're not going to do this, we're not going to let the established business suppress the new business, which is the default option." Chad Pytel: This is all great, I really, really appreciate your thoughts. Not only do I think this is valuable to listeners, it's very personally valuable to Thought Bot, and I really appreciate that. Geoffrey Moore: Well, what about your vision and your values? As you're thinking about these, do they come to mind quickly? What does the world want Thought Bot to be? Chad Pytel: Yes, I think that our vision and values have been very clear, I think that it has been not clear to us whether we can maintain the values that we have, and cross the chasm. So, to the extent that we had those early mistakes in places like Sweden that then caused us to have to take a step back from what we thought we were doing, and to the extent that we've been facing a lot of tension as we've grown, to serve early majority, that has caused a lack of clarity and vision, because to some extent, we had one, and we've been bumping up against that wall. Or falling off the chasm, so to speak, and it's caused us to say "Well, what is the vision?" Why are we even doing this? I think that these conversations have been very healthy in reaffirming the idea that we don't need to cross the chasm, we can continue to stay small, continue to stay exciting and excited in our work, and working the way that we always have, but what that probably means we need to do is realize that that's what we're doing, so that we don't, then, latch on to a specific technology that may have been attractive to early adopters, and, we're early adopters ourselves, and then try to take that across the chasm. Instead, we should always be seeking out new and exciting work and opportunities and strategies. We did designed thinking as well very early on, and that's one of the things that has happened to us, as it's gone mainstream very quickly. If what we're doing is not crossing the chasm with it, then we need to find the next new thing that's going to make our work even better, and early adopters will come along with us for that ride, and we need to do a better job of building a channel to those early adopters to what we have going and will either continue to buy from us, or spread the word about what we're doing. Geoffrey Moore: I want to reinforce that in a couple of ways that I think are important. First of all, if you look at the technology adoption life cycle, and you say "What business models are optimal for what places?" If you work form back to front, at the very back, anything that's like a managed service, or an OEM technology that's sort of built into the product is great for conservative. They get the benefit of it, they don't actually have to confront it at all. The business model for pragmatists tends to be some combination of ... It used to be a product to systems model, increasingly now, it's as a service model, if it's a little bit challenging, it's more of a managed service, and it's a little bit more commoditized, I just want to get it, and be kind of integrated in the service, but prior to ... in Crossing the Chasm, when we're talking those pragmatists and pain, that's a solution business model. It's about 50% consulting, 50% product. It's very vertically specific, you know, one for retail, a different one for healthcare, a different thing for education. Then the early market, it's almost always projects. We do one-off projects for visionary people. Just to reinforce what you say, if you like that kind of work, it's designed specifically to support what we call the early market situation. Obviously, it appeals to you emotionally, and also, there is real value. Then what happens is, then you get ... Let's suppose that block chain is your next big thing. Block chain is early market right now. There will be a bunch of very exciting things to do it, but we all know, at some point, block chain is going to cross the chasm. At that point, you may have a team in your company that wants to follow block chain. Chad Pytel: Right. Geoffrey Moore: You should let it go. Chad Pytel: Right. Geoffrey Moore: What you don't want to do is try to hold it captive, because now you're going to force your company to be a hybrid model and I think that's going to be too challenging. I think you could let it go and even encourage people to ... By the way, there will be people in your company that you'll realize they're not that great a fit for the early market, but your customers love them, they should probably go to your customers. In other words, you let people kind of go to the place in the life cycle where their talents get the most reward, but I think your personal vision and I think the image and the positioning of your company, I feel, is very much like we'd like to take on the next technology challenge and figure out how to make that available to the rest of the world. With [inaudible 00:36:57] it doesn't scale, but, it keeps you coming to work for a long time. Chad Pytel: Yeah, yeah. I think you're right, that doing a hybrid model would be very challenging. I think there's a possibility that we could have two branches or two templates or even a separate organization that took those technologies that had crossed the chasm and helped people execute on them. It's a little bit more staff augmentation kind of thing, there is something there, but I think you're absolutely right, that it's more challenging to serve two segments at once. Geoffrey Moore: There is no question, the world wants both. If you could find a way to do that that didn't break your company, there's a big market for the thing you're not doing right now, or you're doing reluctantly. You say "Well, look, if we're going to get dragged into this over and over again, we can't be reluctant about it because all we're doing is dragging our own feet and slowing down the customer, that can't be the right answer." Either we have to say no, or we have to figure out some second outpost where we do that business out of a different structure. It might be interesting to experiment with that and see how far you could get with it, because the world would love for you to do both. If it didn't break your company. Chad Pytel: Yeah, well, Geoffrey, I really appreciate it, again, thank you so much. Geoffrey Moore: Cool. Chad Pytel: Where can people follow you or learn more about ... Geoffrey Moore: Well, I'm on Linked In, I think probably, I have a blog in Linked In, which is kind of where I try to stay current with things, and then there's a website, Geoffreyamoore.com, so you can kind of go there and sort of get materials and I try to ... If there is YouTube stuff or whatever. The latest book, Zoned to Win is for the Crossing the Chasm problem inside the large enterprise for entrepreneurs like yourself. The third edition of Crossing the Chasm. I updated it about three or four years ago so that I could put in companies that people had actually heard of. The new case studies, they put in Salesforce, and Workday and Box. You know, Aruba, some of the companies that are a little bit more familiar to readers of this coming generation. Anyway, that's what's going on and I continue to stay current with that. My vision and my values say as long as I can be catalytic, I would like to continue to be so. Chad Pytel: Wonderful, thanks so much. Geoffrey Moore: Take care. Chad Pytel: That about does it for today's episode of the Giant Robots Smashing Other Giant Robots Podcast. You can find show notes for this episode at Giantrobots.fm/248. This episode was produced by Tom Obarski. Thank you so much for listening.