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Startup University

Startup University. Hi-Tech Marketing How Markets Develop Market Development Strategy. Hi-Tech Marketing. Diffusion of Innovations Market Development Strategy. Hi-Tech Marketing. Laggards. Late Majority. Early Majority. Chasm. Early Adopters. Innovators.

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Startup University

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  1. Startup University • Hi-Tech Marketing • How Markets Develop • Market Development Strategy

  2. Hi-Tech Marketing Diffusion of Innovations Market Development Strategy

  3. Hi-Tech Marketing Laggards LateMajority Early Majority Chasm EarlyAdopters Innovators • The Technology Adoption Life Cycle: • Adapt strategy according to the stage in the life cycle • Source: Geoffrey Moore

  4. Diffusion of Innovations • The Technology Adoption Lifecycle • Selling to mainstream customers

  5. The Technology Adoption Lifecycle The Diffusion of Innovations is a social process Diffusion of Innovations • Source: Carnegie Mellon University

  6. The Technology Adoption Lifecycle The Diffusion of Innovations is a social process Diffusion of Innovations • Source: Carnegie Mellon University

  7. The Technology Adoption Lifecycle The Diffusion of Innovations is a social process Diffusion of Innovations • Source: Carnegie Mellon University

  8. The Technology Adoption Lifecycle The Diffusion of Innovations is a social process Diffusion of Innovations • Source: Carnegie Mellon University

  9. The Technology Adoption Lifecycle The Diffusion of Innovations is a social process Diffusion of Innovations • Source: Carnegie Mellon University

  10. The Technology Adoption Lifecycle Technology Adoption profiles Diffusion of Innovations Technology Enthusiasts (Innovators) Visionaries (Early Adopters) Pragmatists (Early majority) Conservatives (Late majority) Skeptics (Laggards) • Source: Geoffrey Moore

  11. The Technology Adoption Lifecycle Technology Adoption responses Diffusion of Innovations Stick with the herd! Hold on! Get ahead of the herd! No way! Try it! Technology Enthusiasts (Innovators) Visionaries (Early Adopters) Pragmatists (Early majority) Conservatives (Late majority) Skeptics (Laggards) • Source: Geoffrey Moore

  12. Selling to mainstream customers The Chasm Diffusion of Innovations Chasm • Source: Geoffrey Moore

  13. Selling to mainstream customers Crossing the Chasm: Establish a beachhead segment Diffusion of Innovations • Source: Geoffrey Moore

  14. Selling to mainstream customers How Markets Develop Diffusion of Innovations Tornado Main Street Chasm Early Market Bowling Alley • Source: Geoffrey Moore

  15. Selling to mainstream customers Implications for Sales & Marketing Diffusion of Innovations Chasm Customer goal: Competitive Advantage Solve problem Adopt the obvious Extend paradigm Customer need: Potential of technology Complete solution Make safe choice Better value Vendor goal: Validate technology Segment share Market share Profitability • Source: The Chasm Institute Strategy: Demo the technology Show ROI Set standards Segment focus Skills: Technology proficiency Customer Intimacy Closing deals Relationship mgmt.

  16. Learn more Everett Rogers, “Diffusion of Innovations” Geoffrey Moore, “Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers” Geoffrey Moore, “Dealing with Darwin: How Great Companies Innovate at Every Phase of their Evolution” The Chasm Institute, “Chasm Methodology” Diffusion of Innovations

  17. Market Development Strategy • Market Development Strategy • Market creation variables • Market attractiveness variables • Market penetration variables

  18. Market Development Strategy The Market Development Strategy checklist & stage in the TALC Market Development Strategy Source of money 1. Target customer 2. Compelling Reason to Buy Source of demand To fulfill the compelling reason to buy 3. Whole Product 4. Partners & Allies Needed for whole product Function of whole product integration complexity 5. Distribution 6. Pricing Function of all other factors For the customer’s money 7. Competition 8. Positioning Relative to competition Next move 9. Next Target • Source: The Chasm Companion

  19. Market creation variables Target customer Identified economic buyer, accessible to the sales channel, and sufficiently well-funded to pay the price for the whole product Compelling reason to buy Economic consequences sufficient to mandate any reasonable economic buyer to fix the problem Whole product Ability (with the help of partners and allies) to provide a complete solution to the customer’s compelling reason to buy Market Development Strategy • Source: The Chasm Companion

  20. Market attractiveness variables Partners & allies Relationships with the other companies needed to fulfill the whole product Distribution Sales channel in place that can call on the target customer and fulfill the whole product requirements put on distribution Pricing Price of the whole product consistent with the target customer’s budget and with the value gained by fixing the broken process Market Development Strategy • Source: The Chasm Companion

  21. Market Development Strategy • Market penetration variables • Competition • Target a space that has not been occupied by another company • Positioning • Establish credibility as a provider of products and services to the target niche • Next target customer • Potential to facilitate entry into adjacent niches • Source: The Chasm Companion

  22. Market Development Strategy Market Development Strategy Target Customer: Visionary functional executive Pragmatist dept. manager Pragmatist technical buyer End-users Compelling Reason to Buy: Dramatic competitive advantage Fix a broken business process Adopt new infrastructure Better value with no risk Whole Product: Differentiated application Standardized application Standardized product Differentiated product Partners & Allies: BPR/SI service providers Recruited for specific product Rationalize to reduce friction Minimum required, ideally none Distribution: Direct sales Direct sales/VARs Higher-volume, lower-touch Low-cost, high-touch Pricing: Value-based, gain motivated Value-based, pain motivated Competition-based, pain motivated Competition-based, pain motivated Competition: Category vs. category Application vs. application Company vs. company Product vs. product Positioning: Technology-based leadership Niche market leadership Market share- based leadership Better experience for end users Next Target: Another visionary in a different industry Adjacent niche market New platforms, channels, geographies Next micro-niche • Source: The Chasm Companion

  23. Learn more Geoffrey Moore, “Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers” Geoffrey Moore, “Inside the Tornado: Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets” Paul Wiefels, “The Chasm Companion: A Field Guide to Crossing the Chasm and Inside the Tornado ” The Chasm Institute, “Chasm Methodology” Market Development Strategy

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