Here’s one reason to have a sales voice at the table
According to industry research, the main reason startups fail is because of “no market need”. In other words, founders decided to focus on an “interesting”problem to solve rather than a problem the market needed solved. There’s more to it than that. Borrowing the words of Ronald Coase – “If you torture data long enough, it will confess to anything”
Founders of startups are visionaries, they see a gap in the market that is worth fixing. They launch their startup, to tackle this specific market gap.. Yet, yes not all make it but is it really a case of no market need ? Or, the market just doesn’t know yet ? The answer to this could lie in the technology adoption lifecycle. Which is a sociological model that describes the adoption or acceptance of a new product or innovation
Here’s how the Technology Adoption Lifecycle can contribute towards creating a “no market need” perception:
- Innovative startups offer new ways to solve problems which in turn creates new challenges to how it gains market acceptance. At the very start, their product or service will be well received by Innovators who are generally enthusiastic about new technology in the market. In fact they might even have Innovation money that can finance expensive trials and POC’s. On the flip side, Innovators represent only about 5% of the entire market potential. They are not a sustainable customer base.
- Where it gets really hard for startups is, to move from the Innovators to Early Adopters. Early Adopters are not technology focused. But they are willing to take a “risk” on the technology because they feel that it can help them reach their strategic objectives and jump their competition. But to effectively communicate and make the transition to Early Adopters, startups need to demonstrate exceptional industry acumen to this group
Most startups struggle to transition to Early Adopters because they can’t pivot the conversation from the technology to industry acumen. Startups have to employ a craft like sales approach that can educate Early Adopters yet move the conversation forward to ask for that sale. The problem of getting stuck between Innovators and Early Adopters is best captured by Geoffrey Moore’s book, “Crossing the Chasm”.
In summary, Technical Founders are smart people that have a vision that many others may not have. They genuinely see a problem worth solving. Unfortunately, the majority run out of time and can’t cross between the various segments of the Technology Adoption Lifecycle and get to the early majority segment of their market
7 Responses
Interesting Article, the adoption cycle is something good to know. Where can I get more information about this?
Hi Melvin, Geoffrey Moore’s book, “Crossing the Chasm” is a great place to start. I appreciated this insight when working in the AV sector
Hi Melvin,
I was extremely lucky and was part of the original team that developed the “chasm” concept in 1988-89. Then in 1990 we gave our concept to Geoff Moore (our colleague) and he wrote the book called “Crossing the Chasm” (in late 1991).
Because there are so many details and nuances associated with the Technology Adoption Lifecycle, I have created a free teaching tool that is an interactive infographic. It will show you all of the things you need to pay attention to as you move through the adoption lifecycle. Here is the link: https://www.hightechstrategies.com/alignment-lifecycle-infographic/
I would be happy to answer any questions you might have.
Best regards,
Warren
Good post. I have worked for 3 startups and this has been true. I find getting from innovators to early adopters is the most challenging in scaling a startup.
Geoffrey Moore was one of my partners at my venture firm – Wildcat Venture Partners. Largely due to his encouragement, I wrote a prescriptive guide for B2B entrepreneurs titled, “Traversing the Traction Gap”. (Www.tractiongap.com) It is complementary to Crossing the Chasm and goes into some processes to address the issue of ‘no market need’ that I call ‘market engineering’ – category creation, thought leadership, storytelling, messaging and positioning. Based upon the reviews, people have found it useful.
Thanks for sharing Bruce, will check it out !