Geoffrey Moore Shares Advice From Crossing the Chasm to Zone to Win
“If you want to go fast, go alone.If you want to go far, go with others. It’s just knowing which of those games to be playing at the right time. That is one of the keys to entrepreneurship.”- African Proverb
Geoffrey Moore’s latest book Zone to Win offers a remedy for companies that are struggling to find growth: “zone management. Everyone wants to win, but in today’s age of technology disruption companies are finding it harder to launch new product lines successfully while keeping existing ones running at a profit. His four-zone model guides you through the ups and downs of tough decision making, with the aim of “catching the next wave” — and you don’t need to be a surfer for that.
Geoffrey Moore is an author, speaker and advisor. he splits his time consulting between startup companies.as well as large corporations like Salesforce, Microsoft, Autodesk, Google Splunk and others. He is also a partner at Wildcat Ventures. Geoffrey Moore’s work has focused on the market dynamics surrounding disruptive innovations. In his first book “Crossing the Chasm” provides insights for startups transitioning from early adoption to mainstream customers. The also provides the technology adoption lifecycle framework for B2B enterprises.
Excerpts from my interview with Geoffrey Moore:
Shobhana: I’d love to talk about your journey in Silicon Valley. You started out as a literature major, you went to Stanford university and then you did a Master’s at the University of Washington. Can you talk about some of those early influences and how you moved into technology.
Geoffrey: Okay, thank you. My mission was to be an English professor. And so, I was an English major in undergraduate, got a Master’s, and a PhD in English literature.
I specialized in medieval and Renaissance literature. So yeah. Not particularly relevant on the high-tech sector at the surface. Anyway, and I did teach for four years in a small liberal arts college in Michigan. My wife is from Palo Alto. we’re an interracial couple she’s Filipino.
And so, Michigan was not a good fit for us in the seventies. But there were no jobs in academics. So, I just had to get a job someplace else and I was lucky enough to get a job at a software company as a training director.
I got more interested in the sales and marketing side. I didn’t think I was going to be a coderAnd I spent 10 years with three different companies, and I learned a ton.
I was never a very successful salesperson. I was terrific at opening. I wasn’t very good at closing. And so somewhere along the line, I thought that sounded more like marketing than sales. And when I got into marketing, I joined a company called Regis McKenna, which was the premier high-tech PR agency of that era.
And that was just an invaluable experience for me. And, that’s where I was able to work with enough companies to see the patterns. That led to writing “Crossing the Chasm” which was my first book. And it was all about those challenges and we were living them at Regis McKenna every day with our clients.
Shobhana: That’s very helpful. “Crossing the Chasm” was written 30 years ago and actually sold over a million copies over the years. How has the framework held up?
Geoffrey: I think that the framework has just really held up. It’s particularly strong at helping B2B and B2B2C companies. It’s not really a consumer marketing book. It’s much more of a business to business marketing book, but the frameworks had held up very well. And I’ve had to re I’ve had to revise it twice because the examples didn’t hold up because the company’s changed so fast and high-tech, but about every 10 years you got to go, okay, I’ve got to have a whole new cast of characters, but I didn’t actually rewrite any of the logic of te book. I just wrote rewrote the examples.
We were talking to many startups and many had disruptive innovations. And they kept on having this situation where they have these early successes and these great customers and they go, wow, this is it. And they pour on the gas on big marketing programs, hire a bunch of salespeople and then boom. And they fall on their face. And so what’s going on here? This is the pattern of the chasm and this whole notion of early adopters, vs early majority and how different they really are.
What it takes to win with one is so different from what it takes to win with the other. So that change in culture and focus that’s required across the chasm. it was easy for me to see it because I was going from company to company. Before that, in those three companies that I was in before I became a marketing consultant, I actually took products into the chasm and none out of the chasm.because I thought it was my fault.
In fact, we all thought it was our fault. And so part of the chasm I think was about just getting redeemed. It was like, okay, we probably could have done better, but there’s something structural going on here. It’s just not that it’s not that we’re all bozos. So it was, it felt good.
Shobhana: Is Crossing the Chasm targeted at startups?
Geoffrey: The idea behind Crossing the Chasm is that nobody’s heard of you. You have a really exciting, your venture capitalists, maybe they’ve heard of your venture capitals, but they haven’t heard of you. And you have something incredibly exciting.
The early market that are technology enthusiasts and visionaries who make up what we call the early market — hey both get you. They are excited by you and gravitate towards you. They believe what you believe. They think this is the next big thing, or at least could be, and they want in on it.
As you go outside of that little bubble and wander out into the pragmatic real world, you have a series of lessons to learn.
Shobhana: And then you talk about the tornado, which is when you hit the mass majority.
Geoffrey: Yeah. So, the people who are not in the early market, the people who they call the early majority, we call them the pragmatists. The way they make buying decisions is they say,
“Look, I’m not an expert at this.”
The PowerPoint looks good. The demo looks fabulous, we know that’s not always the whole story. So, what I’m going to do is I’m going to talk to my peers and I’m going to ask them, have you tried this? And they say “Not yet”, I’ll say “Okay, I’ll wait too.”
And that’s what creates the chasm. I have a career and I want to protect the career. So that’s the chasm. The tornado is the app.
Now, all of a sudden you have the fear of moving out the FOMO thing, right? Fear of missing out., Oh my gosh, I got to do it too. And at that point, everybody rushes into the market and there’s all of a sudden, everybody has budget for the new category and everybody’s talking about, who are you going to buy?
And so that we call that the tornado because all of a sudden, the category inflates so fast that anybody in the category gets a huge lift.
Shobhana: What are your thoughts on how the pandemic has impacted innovation? I
Geoffrey: I hear this a lot from the companies I consult with as well as the CEOs I spend time with. What the pandemic has done more than anything else is it has accelerated digital transformation in the customer base because everybody has to work from home.
A lot of these things, which they had a five-year plan for became a five-month plan. And so, anybody in the Valley who’s part of the digital transformation solution set has their business accelerated dramatically. Now, if you’re part of clean energy or you’re part of biotech or you’re part of something else, it may be the other way.
Shobhana: You’ve done work with both startups and large companies and a most common misunderstanding of disruptive innovation is to overestimate that impact in the short term and underestimate it in the long term.
Another misunderstanding is to associate disruptive with good. So maybe you could talk about innovation and the frameworks people should use while looking at disruptive and sustaining innovation.
Geoffrey: Yes. Over and over again. We overestimate disruptive innovation in the short term, which creates bubbles, but we underestimate it in the long-term, which creates revolutions. Silicon Valley in particular does this because we tend to be technological enthusiasts. We tend to be early adopters.
We tend to think that the disruptive innovations are always good and it’s the good stuff and people who are pragmatists must lack IQ.
So disruptive innovation is particularly important when the current status quo. Is holding us back. So in other words, for a lot of places to status quo, it’s a huge asset. the fact that we have highways, they’re not holding us back. we can drive to where we want to go, but occasionally you get to a situation where you need toll roads.
In Silicon Valley because we like disruptive innovation, we have put a premium on leadership which is what you need when you’re disrupting. And we tend to not put enough a premium on management, which is what you need when you’re sustaining.
When you’re disrupting, you want Steve jobs, but Steve jobs would not do Tim Cook’s job very well. And in other words, it’s important to respect both jobs, so disruptive innovation can happen in large companies, too.
The most destructive thing for a company to do is start a disruption, get halfway and quit. You’re much better off never starting The book Zone to Win starts with 56 companies, iconic companies in tech. that crushed it the first time but do not exist today. Because every time they tried to catch that second wave, they couldn’t.
How do we crack this code? And it talks about the understanding that there are various zones of interest inside the corporation. There are three that are permanent and one that’s temporary and each has its own management model.
And so the two zones that all public companies have all the time are the performance zone, which is their sales and product revenues and the productivity zone, which has all their costs. Sales, Finance, HR, Legal — it’s 95% of the people at any large company are either in the performance zone.
Now the incubation zone is where you work with the next generation disruptive stuff. In the 20th century, big companies had a laboratory model for that Bell labs. IBM labs, Xerox Parc. That didn’t work.
They could not get to market because of the distance between the lab and the performance zone. It’s too big. What we have learnt in the 21st century is you got to run the incubation zone. the way a venture capital fund runs their businesses. Not, you’re not a venture capitalist, and you’re not trying to make venture capital return, but you fund these things like their startups.
You give them an entire team, not just engineers. They have salespeople, they have code, but you keep it small. None of their products can be sold in the performance zone.
This is next generation stuff. So you’re working with the next generation here and you can do that. And just putting that zone in place is a big step up.
And then the other thing is the transformation zone. That’s the one that’s temporary. Microsoft didn’t voluntarily go to the cloud.
Microsoft was crushing it with Microsoft had no reason to change at all. But what happened was Amazon showed up and all of a sudden the back office software business, which is what Satya Nadella was running was not going to be a business., The world goes to the cloud because people won’t buy our stuff.
Shobhana: You’ve advised a lot of startup founders. You are a CEO whisperer and a CMO whisperer. What are some good stories you can tell
Geoffrey: Many companies do not have product market fit to start with. You sit down with a team and you put out this chasm framework, you say, where do we think the category is?
And, everybody says, in the chasm and the founders think it is in the tornado. It’s not. When you’re a believer and when you want it to be there and when you can see it in your mind, and then it’s so hard to listen to the universe.
Where are we really? And what happens in large companies is they acquire these incredibly cool assets. And the CEO typically sponsors the acquisition and then he immediately puts it in the performance zone because he wants it to scale. No. You just put my six year old grandson behind a Mac truck wheel.
Shobhana: If you were to characterize your superpower, what would it be?
Geoffrey: I think there’s two things. I think I rely on a great deal of what is outward sense of direction. Being in service to something. The second thing I think I really do think I’m good at coming up with metaphors and I do it all the time.
Shobhana: What are your views on diversity in Silicon Valley?
Geoffrey: I do a ton of work with Salesforce.
I think Marc Benioff has been a good leader there. If you look at the leadership team at Salesforce, it’s more gender balanced than any other site I’ve ever worked with. And it’s not just the gender balance, it’s powerful voices, and in fact, I would argue right now it’s probably.
stronger voice from women than men
Marc is a big supporter of mindfulness as a personal technique. The reason I bring that up is I think we have to all have personal practices, whatever they are.
What are your views on the future of work?
Any time there is a transition there are a lot of jobs that are going to be decimated. A lot of people are going to be dislocated. People think that some Terminator future that’s going to take away all of the creativity of human beings.
In the short term, there will be job dislocation and it is painful and we should do everything we can as a society to mitigate those problems. But long-term, think of all the problems that need to get solved. That’s a large body of work.
So you ask yourself, the question is “ Is work going to diminish, how are we doing with the body of problems? Do we feel like the body of problems is getting smaller or larger? “
My experience is it’s getting larger. And in fact, I just feel like there’s an infinite set of problems in front of us. So there’s an infinite amount of work.
So I don’t think we’re going to run out of work, we, but the product market fit between the
I think the thing is that we need to realign ourselves to reform the future of work, which is different maybe than the past of work.
