Startup city event in Bangalore

Yesterday I attended ‘Startup city’ event organized by SmartTechie magazine. More than 40 companies showcased their products and services in the event. There were many interesting keynote addresses and panel discussions held as a part for the event.

The event was kick started with inaugural keynote by Ashish Gupta from Helion Venture partners. He spoke about various stages/milestones of a startup and challenges at each phase. His venture capital firm has invested in many of the early stage entrepreneurial ventures. I have heard Ashish’s pod cast some time back, but it was a good experience listening to him live. Followed by that there were some panel discussions with participants from companies like Microsoft, Sun, Amazon etc. I was not that interested in listening to them, primarily because they perspective changes (or rather looks out of phase) when big company’s senior executives start talking about entrepreneurship.

The real cool thing was the product demos from many startup companies, who have built great technology products. Almost all of them have good product, have already raised capital (self/angel/VC funded) and gained initial traction with customers. I personally know the promoters of companies like Sloka Telecom and NGPay and it was nice meeting them, with their products in deployment stage.

It was 11:45 and I got back into the auditorium for the concluding keynote address by Rajendra K Mishra. He is an entrepreneur, turned activitist (by winning the Lead India campaign organized by Times of India). He is currently working on various private-public-partnerships and leading ‘change India’ campaign. He shared his entrepreneurial experiences in his keynote address, which was really scintillating. He started his first venture of selling imported American trailer houses to Japan. He came across crazy issues but successfully pulled it off. Followed by that venture, he built three ventures and made successful exits.

Then he started discussions about politics and the role of educated, urban Indians in that. He re-iterated that middle class Indians are the major culprits for the current state of affairs as majority of them won’t vote. Added to that he explained some of the initiatives he has taken with politicians, bureaucrats, and corporates to make things better. If not for anything, he has got a great communication and convincing skills. With his clear headed thoughts, he will make a difference for sure.

Compared to other entrepreneurial/startup events, this was by-far a mature one I have seen. Loads of importance and discussions happened around raising capital, marketing strategies and acquiring initial set of customers rather than talking about “that great cool idea”. I was also able to see and connect with folks from Open-coffee-club and Startup Saturday.

Last but not the least! The growth of event organizers (SmartTechie magazine) is been amazing. I have been associated with some of them from the time they launched their Bangalore edition in 2005. Initially started off with career workshops and tech career advising, the magazine has grown well over the years by covering various other aspects like entrepreneurship and professional networking. I had written couple of articles for them some time back. Hope will write some more in the near future.

It was a nice event packed with loads of energy, enthusiasm and passion. The first half of this Saturday was really worth spending out there.

BOOK REVIEW: Word of mouth marketing

Author: Andy Sernovitz

Price : 24.95 USD

How smart companies get people talking?

As an engineer it’s quite possible to think everything from a technological perspective. Most of technologists think what if they have some ‘cool’ product they can build a business around it. In reality only 15% of overall product cost is spent towards engineering the product. Remaining amount goes for marketing, sales and support functions. No matter how much ever better the product is (in terms of technology, cool features, price and performance), if it is not marketed properly it will be a failure. Most of the technology startups fail not because of their technical expertise, but mainly because of their inability to market and sell the product. In fact, marketing determines the success or failure of these ventures.

Coming to marketing, quite some numbers of methods were invented over the years. For a startup/entrepreneurial venture (which is of my interest), its hard to invest heavily on some of the methods (like advertisements, campaigns, celebrity endorsements etc…) as it will cost them dearly. So what is the cost effective, yet most powerful marketing strategy startups can afford? The answer is ‘word-of-mouth marketing’ (WOMMA). Especially if you are trying to sell a consumer product/service to retail customers, WOMMA is the way to go.

In his book author Andy Sernovitz, introduces to some of the easy, yet very powerful WOMMA techniques. To start with, he defines WOMMA as ‘Giving people a reason to talk about your stuff and making it easier for that conversation to take place’. It’s all about making Consumer to Consumer (C-to-C) marketing happen. There is nothing more powerful than an existing consumer getting another customer. Added to that, it comes for FREE. In core WOMMA is all about building trust with existing consumers and getting more business with help of that.

To start with, it’s critical to understand the power of the end consumer of this era. Thanks to the invention of internet and mobile phones information flow has become seamless. More than a sales pitch, consumers will take their decision based on what their friends, family or some review site says. Just think of examples in your real life about how many times you have taken certain decision (like buying a mobile phone, car, laptop or even real estate) just because it was recommended by someone.

So, how to make the WOMMA happen? The author introduces to four basic rules of WOMMA which are: Be interesting, Make people happy, Earn trust and respect and Make it easy. Then he goes on explaining how to create each of the above mentioned things. Basically any consumer talks about a product/service to his friend/family members mainly because of three reasons:

  • They really like the product/service
  • They want to feel good
  • Feeling connected with that product/service.

At the same time not every consumer will feel the same way. The challenge lies in identifying and helping the consumers to spread the word. The author goes on saying that WOMMA has had a far greater impact on businesses than what we really think. In the next few chapters the author introduces some of the ideas to generate word of mouth. With a good product, great customer experience and consistently making them happy WOMMA can be multiplied in no time. But the end results are really stunning.

Then the author introduces five Ts of word of mouth marketing (Talkers, Topics, Tools, Taking part and Tracking) and goes on explaining about how to go about executing each of these Ts. In each chapters he gives some tips like maintaining a simple website, saying thank you to the consumer, writing blogs, participating in forums, consistent present in the internet, making the recommendation process easier, free samples, leveraging social networking sites, giving cost effective goodies etc. He also emphasizes how important not to do any sales pitch, which will bring down the impression of the company.

I heard from my MBA friends that marketing is a theory subject and people find it very dry. In this book author Andy has made all my perceptions wrong by providing easy step-by-step practical approach to WOMMA. In fact after reading this book, I have become a big fan of WOMMA and Andy. I am following his blogs regularly, where he provides very easy but powerful real life examples.

If you are involved in marketing job this book is a must read. For entrepreneurs, who are bootstrapping their business, this book is a real treasure.

Related links:

BOOK REVIEW : Marketing Mayajalam

BOOK REVIEW : Crossing the Chasm

My experiences with the chasm

New Horizon Media raises second round of funding

Chennai based New Horizon Media (NHM) has raised the second round of funding from Beacon India Private Equity Fund. I have been following NHM company for the past three years. They are mainly into regional language publishing. To start with they published few non-fiction books in Tamil and went on publishing in English, Children books and Malayalam. Check out more details from their website.

Coming to their books, I have read about 6 books published by NHM. Check out the book reviews of Marketing Mayajalam, Charlie Chaplin which are published them. Almost all the books are priced less then 100 rupees, which very much affordable for an average Indian consumer. Added to that paper quality, cover design and bigger fonts makes the reading as a pleasant experience. I have also listed to one of their audio books about ‘Emotional Intelligence’ and found it useful. Stay tuned for reviews of remaining 4 books.

Areas like book publishing is one of the fragmented areas in India today. By bringing in professional approach, NHM folks are able to attract venture capital for the first time in publishing. They have already built a great brand in Tamil publishing industry and I am sure they will go places.

I wish Mr.Badri and his team all the very best for touching ‘New Horizons’.

My previous post about NHM: New Horizon Media – A ‘positive’ media company

Education and Entrepreneurship

Last week Star Vijay (Tamil TV channel) organized a debate about the role of Education in Entrepreneurship. It was organized as a part of ‘Neeya? Naana?’ (You? or Me?) program. They have called for two groups for the debate. The first set was un-educated (hardly passed 10th class) and successful entrepreneurs. They have accumulated more than a crore wealth thro’ their business, starting from scratch. The second set was the educated, working, middle class people. Following are some of the interesting points from the discussion.

First, the un-educated folks have more appetite to take risk and start on their own. This is mainly because they start doing business as a survival, so there is less to loose. The educated folks get into the comfort zone quickly. This has made them risk-averse. In fact most of the successful entrepreneurs like Dhirubai Ambani, Steve Jobs, Bill Gates, Azim Premji don’t even have college degree but were able to build business emphires. The combination of passion, vision and strategy has made them successful more than what formal could have thought them.

Having said that can we completely rule out the role of education for entrepreneur’s success? No. On the other hand educated, professional people are very necessary to scale up the business. They bring in unique skills for business execution, which is very critical for the success of the venture. Many of the un-educated entrepreneurs in India fail here because they lack to see the importance of education. They remain small and medium size entrepreneurs (or even self employed status) rather than building next generation professional companies.

Second, the educated community gets into the ‘comfort zone’ very quickly due to the job they do. Big company, stable salary and 9-5 job schedule makes them averse to taking risks. As the time progresses, the notion of entrepreneurship diminishes. They end up working for a person or a firm almost all their work life. Also many of them end up doing a job which is totally not related to the education they had. In the debate, many of them accepted that they are not satisfied/fulfilled with the job they are doing.

Third, the un-educated entrepreneurs still have agony of not getting proper education. Most of them agreed that they have heavily invested in their children’s education by sending them to good school and foreign universities. Also they expressed that they still feel that they might be cheated by the educated people in the business life.

Finally the debate concluded that each set (un-educated and educated) brought their own strengths. The former has passion, whereas the later had the skill to execute the passion. In a globalized world both are very important to build a successful venture. I am not able to get the complete video of the debate. For people who can understand Tamil, please check out the promo of the debate below.

It’s nice to see such mature debates happening in regional TV news channels. In a way Star Vijay has set a new trend among Tamil channels. Recently they have started a first ever talk-show named ‘ippadikku rose’, which is anchored by a transgender.

Related blog post:
Abundance mentality and Entrepreneurship

Interview with Ram Shriram

So many things has happened in the last three months, when I was not blogging!

Last month, Ram Shriram (One of the early investors in Google) was in India and I had a chance to watch his interview in CNBC. It is probably one of the best TV interviews (in the similar lines of Dalai Lama, Azim Premji) I have ever seen. I was completely hooked up with each and every word Ram was speaking in rhythmic, soothing voice with clear thoughts. The text version of the interview is available here in the CNBC website.

Here is my favorite portion (especially the highlighted one) from the interview. Very simple statements but very realistic.

Q: How important is it for you to have an Aha moment every time you put your money into something?
A: It is important to realize not every investment will be a Google.

Q: It would be great if it turned out to be that way.
A: Yes. So, every ten years or so, you will see a Google size company emerge. But in general, it takes committed entrepreneurs, great teams that they build around themselves and then great execution with good monetization or business model around it. But the business model can come last. So, the first part of building that virtuous cycle is having happy users. From happy users come happy advertisers and from happy advertisers come revenue streams. Then, if you have good execution, there comes profit.

Q: And a happy investor?
A: Yes, that is Nirvana.

Barcamp Bangalore 6 : Summer edition

Last weekend I attended the summer edition of Barcamp Bangalore. This is my first Barcamp and I found it very interesting!

To start with, its amazing to see the energy level of attendees. They were all highly pumped up and it was showing up with almost everyone I have met. Compared with a hierarchial corporate setup, it was organized as a completely an informal, flat and free-flowing setup. Every session was packed with very interesting questions, debates, critisicms and smart answers in eight different tracks.

I was mainly interested in the ‘startups and demo’ track and spend almost the whole day (saturday) there. I was able to see pretty good web 2.0 applications (Example: demonstrated for roping in the technology enthusiasts. There was an interesting session (according to me) hosted by Prof.Suresh from NSRCEL at IIM-B on the topic ‘Startup pains’. He was asking the campers about the list of problems faced by aspiring Entrepreneurs and what bodies like NSRCEL can do about solving those issues more at the ecosystem level.

Thats it! People started throwing up statements like ‘Not enough angels available’, ‘Inadequate support services (legal, financial etc..)’, ‘Coming up with operational agreement between co-founders’ etc. I was silently sitting and listening to the discussions happening out there and wondering the maturity level of these entrepreneurs. In my opinion, these folks are still in the ‘self-employed’ mindset and not thinking about doing business in scale. All the points they put forward was from the same tone and nobody spoke about important aspects like: Difficulty in finding prospective customers (especially in the technology space), Developing cost effective marketing strategies, Limitations of domestic market, Hiring new employees in the overheated Indian job market, Lack of incubation centres. Also many of the folks were thinking from the bootstrapping perspective.Even though the number of entrepreneurs attended the camp was quite high, their understanding about the startup from the business perspective was very low.

Apart from that, there were many geeks roaming around with latest gadgets (like iPhone) wearing all viered t-shirts. Most any of them had Linux on their laptops and doing some or the other things during the sessions. I haven’t got any opportunity to interact with any of the organizers/volunteers during the camp. I would extend thanks for all the effort they have put to make this happen. I would love to connect with some of these enthusiasts in the near future.

If not for anything, barcamps are worth attending for boosting the personal energy level.

Abundance mentality and Entrepreneurship

Its time for a blog post on Entrepreneurship!

I was brought up in the north-west part of Tamilnadu, which happens to be the ‘textile-hub’ of south India. Most of the businesses are Small-And-Medium scale and are into producing textile products like cotton sarees, lungis, hankies and shirts. Also, there are numerous businesses in various aspects of the textile value chain — dyeing, calendaring, bleaching, tailoring and printing. There are 24189 registered SSI units as on 31.12.2000 in the district besides 59 Large Scale Units. I have vivid memories of this business hub – dusty, vibrant and narrow streets, bullock carts carrying textile materials, chai and bhajji shops serving snacks, businessmen from the north and western part of India, daily wagers leaving their kids to nearby schools etc.

Most of these businesses are run by people who hardly have a university degree. Right from my school days I have always been spellbound by the entrepreneurial passion and hardworking nature of these people. These folks learn business from the streets and come up in a hard way. Compared to the high-tech entrepreneurial ventures, these businesses are extremely fragmented and commoditized. Due to high pressure and cut throat competition many of the firms have shutdown their business in the recent past. I personally know of friends, who have taken to a job as their family business is in vain. On the other side, the surviving businesses are operating on the same scale over decades. For quite sometime I was mulling over the reason for their ‘non-scalability’ and came up with some interesting observation:.

Most of these businesses are family owned businesses operating on ‘proprietorship’ model, where there is no concept of ‘equity shares’. All other people are hired as employees by paying salary and exploited to the maximum extent. Some of the high-performing smart employees are given more responsibility -– dealing with channel partners, getting new business, having a team built around them etc. These smart employees will slowly get contacts and open up their own shop in a matter of two to three years. The lower entry barriers added with strong channel relation built on the previous business helps these ‘recent-entrepreneurs’ to open up their shop in no time. They start competing with the ex-proprietor and the chain continues forever. Instead of increasing the pie, they cannibalize each others businesses.

The example I have mentioned above is a classic example for ‘conservative’ thinking instead of ‘abundant’ mentality. Any Entrepreneurial venture can scale up provided it has a core team working on a common vision with complementary skills. As the initial folks have totally different strengths, the business will start growing in multiple dimensions with each one of them leading in their area of expertise. When such people come together it is important to have properly defined profit sharing mechanism in terms of equity shares. This is one of the key factors to keep the core group as a ‘nuclear’ team and sow the seeds for long-term scalability. However this trait will not come easily to ‘normal’ people — who want to have more power rather than profitability of the company. This is where the abundant mentality plays a major role as it has got to do with having a bigger heart. For example, having 80% stake in an Rs 10,000 profit is any day better than 2% stake in Rs 10,000 crore profits.

Most of the SMBs are not able to scale, mainly due to the ‘old-school’ conservative thinking. It is very critical to understand that the world is becoming more interdependent and knowledge oriented where looking for synergistic opportunities plays a vital role. Unless an Entrepreneur has the ‘new-school’ of thinking by shedding ego and craving for the power to control, the firm will not scale to a larger extent.

After all everybody understands the difference between water-gun and Niagara falls!

BOOK REVIEW: Silicon Valley Greats

Author: SS Kshatriy

Price: 180 INR

ISBN: 81-259-1459-5

When I visited Silicon Valley in the year 2002, I was amused to see so many Indians out there. Not only Indians are one of the major immigrant communities in the San Francisco bay area (which consist of counties like San Jose, Santa Clara, Fremont, Sunnyvale etc.) they are also one of the most successful group when it comes to Entrepreneurship. I remember reading one of the WSJ articles where as much as 30% successful Entrepreneurs in Silicon Valley are from Indian origin.

Thanks to Nehru’s socialistic democracy, bulk of highly educated (mainly from IITs) engineers migrated to the US and made fortunes there. Right from 1970s these folks built tons of high-tech organizations and generated abundance of wealth, which built a very strong brand for India. Two decades later when Indian opened up the economy in 1991, it was ‘homecoming’ experience for these wealthy entrepreneurs as they acted as a bridge between India and USA.

In his book ‘Silicon Valley Greats’, author Kshatriy met some of these ‘rags–to-riches’ Entrepreneurs, compiled their profiles in a good way. Starting with K.B.Chandrasekhar (co-founder of Exodus communications), the author presents the profiles of B.V. Jagdeesh (co-founder of Exodus), Kanwal Reiki (founder of TiE), Sabeer Bhatia (hotmail) and also domestic Entrepreneurs like Pradeep Kar (founder of Microland), Narayana Murthy (Infosys). All these people come from a middle-class background and migrated to USA with some hundred dollars in their pocket. From there these folks rose to one of the world’s successful tech-entrepreneurs.

At an outset the author compiled their profiles to answer questions like: What made them successful Entrepreneurs? How did they build their companies? How did they raise money for their venture? What drives them to contribute back to India? What sort of donations they have made to Indian universities? How do they lead their personal lives? What sort of ‘Indianness’ do they have inside them? How did they create a global brand for themselves? While compiling their profiles, author included some of the small but interesting incidents in their lives which had a profound impact later. For example, Sabeer Bhatia has always had ‘another method’ for solving mathematical problems during his school days. This lateral thinking helped him to think the web based e-mail, which lead to the birth of hotmail.

However at some of the chapters I found pretty lengthy as it was getting too much into their family and background information. It could have been more concise and brief. Also the shape of the book was bit odd and bulky. The publisher (Vikas publishing) could have taken more care while designing. Especially for bedroom readers (like me) it’s pretty hard to hold it and read.

In conclusion, I found this book is a good read technology professionals who are aspiring Entrepreneurs. I very much plants ‘positive’ and ‘progressive’ thought process in that direction.

Reflections on ‘The Guru’

I like only two type of movies: serious and comedy. Since Mani Rathnam’s ‘THE GURU’ belongs to the first category watched it on the theater (after a long long time). Overall the movie was pretty good at the same time raises lots of questions about building businesses in India. Before getting the business, let me quickly run thro’ the movie.
The hero Gurukant Desai, who hails from a small village in Gujarat moves to Turkey for employment and make some quick bucks. Because of his hard work and commitment (and of course his shrewdness)he raises very fast, but comes back to India and starts his own company. The first set of scenes itself says that ‘Guru’ is the story of Dhirubai Ambani and Reliance. If not for anything I would appreciate Mani’s attempt to make movie based on real life heroes. Long time back he made an excellent Tamil movie called ‘iruvar’, which was a neat sketch of lives of MGR and Karunanidhi. Unfortunately it was a commercial failure but I liked the movie. Unlike the typical ‘pyar mohabbath’ time-pass movies this movie conveys a message to aspirational, middle-class, hardworking people.

When the hero Guru starts his ‘Sakthi trading corporation’ in 1950s ‘license raj’ environment he faces lots of problems from the government and nethas. In order to race ahead in this adverse conditions Guru ‘bhai’ gets dowry, tilts the government, irks the authorities and finally emerges as India’s biggest business powerhouse. Now what is the message conveyed? In order to become successful and wealthy do an individual needs to take Guru’s path? Do we need to consider his strategy as a formula for success? Before coming to the conclusion let us analyze the ‘license raj’ a bit more.

In his book ‘India unbound’, author Gurucharan Das explains very clearly about the license raj and how it ended up as a zero sum game for India’s economy. After independence, ‘India’ (read ‘India’ as Nehru) embraced ‘socialistic-democracy’ as the main ideology inspired by the erstwhile USSR. Unlike USSR, in India it worked in reverse way by as it ultimately ended ‘capitalism for rich and socialism for poor’. The big, rich, fatty businesses were growing leaps and bounds whereas the poor suffered big time. The impact on corporate sector is even worse. Every corporation was owned by the government and in order to open a private business house, one has to go through all sorts of pain by applying for licenses. The word ‘competition’ was literally wiped off and the Entrepreneurial spirit was burnt in the infancy stage itself. Except for family owned businesses (which was more inherited from forefathers) new ventures were totally out of the scene.

What does it lead to? One end it lead to incompetent, lazy, red-tape public sector organizations and in another end small businesses were killed. Today all public sectors (except a few) have become ‘sick units’ and government is trying to slowly get rid of them by ‘disinvesting’ its stakes. Even some of the very few successful PSUs failed miserably and made no difference to people’s lives. I don’t see any device made in BHEL or BEL or NTPC is ever been useful to any average middle class Indian. They might have built boilers, electronic voting machines, power grids or transformers but where do they stand today? Did these organizations built any products at low cost? Did they invent any device which made life easier for a farmer? Did they create any product which is competing at the world level and stand for any unique values? Did they create any healthy competition? The answer is BIG NO.

In this kind of environment if an aspiring individual starts his business how can he think of making it big? That too going by the rules of ‘sahibs’ of ‘license raj’? And anybody (like Guru ‘bhai’ in this movie) tried to ‘work around’ this system we call them ‘un-ethical’. There was only one way out and where is un-ethical comes into picture here? If we call that as un-ethical what about today’s knowledge industry? Can we call all companies in the world are 100% ethical? What about ENRONs of this new world? What about insider trading that happens in the services industry? How many of us are aware of one engineer billed under two different projects? How many of us know about companies cook up their employee’s resumes to get a new project? Is it not un-ethical?

In my opinion the ‘idealistic’ environment never exists and ethics is totally subjective. Why do I say that? Let me take one example from from Ramanaya and Mahabharath as well. How did Rama kill Vaali, brother of shughreeva? Is it the correct way according to the war principles? Didn’t lord Krishna shout ‘Ashwathama hata’ (to confuse dronacharya), which eventually killed drona? We accept them because it was done to protect ‘dharma’. I would augment my opinion to that and say whatever Guru ‘bhai’ has done is to protect ‘business dharma’ which created a lot of wealth, generated lots of employment which has a significant positive impact in the society. In fact this is what Mani Ratnam clearly conveys thro’ Guru’s final dialogs in the court.

Overall it was a nice movie with a lot of messages!

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BOOK REVIEW: Crossing the chasm

Author: Geoffrey A Moore

Price: 17.95 USD

ISBN: 0-06-051712-3

This book is one of the all time classics in the high tech product marketing and Innovation. Its been in my ‘reading list’ for years together and one of my colleagues literally forced me to read this book in order to have interesting ‘coffee-table’ discussions. As a matter of fact we had multiple discussions and I got ample amount of insights into technology product marketing. This book provides a basic frame-work, where any technology and its growth can be fitted in.

To start with, what does it take to build great technology product and how to measure the success of any technology? The author introduces two key terms ‘fad’ and ‘trend’ to understand the consumer behavior, which is very key in innovating and marketing any technology product. The former (fad) is seen only among the small segment of people who are technology enthusiasts or special interest groups. These are the people who hook themselves to the latest gadget and start admiring its technology. They try out all the features and options given in the product. The later(trend) is when any particular product or technology is widely accepted by large pool of customers and it creates sustainable business around it. The success of any high tech product venture depends on how quickly and successfully it is able to change the ‘fad’ to a ‘trend’ and sustain it. In order to achieve this transformation, one should understand how the new technology is adopted by the customers. In order to do that, the author introduces the terminology ‘Technology adaptation life cycle’. This is all about understanding how the technology would be adapted by various types of customers. This categorization is based on the psychological nature of various customers.

Before getting into the categorization, the author classifies the high tech innovation into continuous and discontinuous innovation. The continuous are the ones which bring incremental changes to the existing product or service. Whereas the discontinuous innovations brings in big leap changes, which totally change the way we do things. For example the Google’s gmail is a continuous innovation, which brought excellent new features like unlimited storage, excellent user interface, labeling the email etc. Whereas hotmail is a discontinuous innovation, by bringing in mail access to via the Internet. The challenge in high tech marketing brings in huge amount as marketing these discontinuous innovations require change in the customer behavior. So the main objective of the marketing is to bring in a ‘compelling reason’ to buy the product. In order to bring in that compelling reason it is important to understand the various customers.

To start with, the ‘technology enthusiasts’ are the first set of folks who deal with any new technology or product who create the ‘fad’. As I said in the beginning of this blog, these people are ‘geeks’ who always shop for the latest equipment or software and try it out. They build the product with the technical expertise and the are only interested in ‘how’ the new technology works. But these enthusiasts contribute only to very thin portion of the total customer base. Followed by them are the ‘visionaries’ who foresee the the advantage of the product by bringing in huge order of improvement. They are good at the ‘productizing’ a technology idea by intuitively predicting the future. For any entrepreneurial venture these two are generally achieved pretty easily as they have got visibility up to this point. But the real challenge is to move to the next phase by selling the product to ‘pragmatists’ who belong to the major portion of the customer base. They are also called as ‘early majorities’ and they are pretty skeptical in adapting to the new product as they are low-risk takers. Majority of the technology firms fail in this phase because they fail to convince the pragmatists. When the organization in transitioning between the visionaries and pragmatists it is in the ‘chasm’ phase. Crossing the chasm successfully determine the success of the organization and the focus of this book. Followed by the pragmatists are ‘late majority’ conservatives who are the volume players. They enter in when the market is matured but take advantage of their existing vast customer base. Followed by them are the ‘laggards’ who are very conservatives. All these types are shown in the diagram below.

Now let us come to crossing the chasm. How can the firm convince the ‘pragmatists’ and make them adapt to the new product? This is similar to capturing a new land with the help of the army. In order to do that the niche market (or the beachhead) needs to be captured. This starts with addressing the pain points of the niche market customers. Creating a competition and showing a value proposition is the key for making the pragmatists to buy. This gives them the signal that the product is matured. Now what about winning the competition? This is where the positioning of the product comes into picture. The positioning needs to be done depending on what phase of the technology adaptation cycle the product is in and the author suggests the following approach:

  1. Technology-enthusiasts: Name-it-frame-it
  2. Visionaries: Who-for-what-for
  3. Pragmatists: Competition and differentiation
  4. Conservatives: Brand and trust

After the positioning the product properly, distribution and pricing comes into picture. In this phase we can say the product has successfully crossed the chasm. After that the organization moves into altogether a different phase. In this time the financial and people aspects needs are totally different and the author gives some more details in these areas. In the end the author describes about product management and product marketing management roles which emerges after crossing the chasm. The author has given multiple examples while explaining the concept. Unfortunately these examples belong to the 1990s time-frame and I found pretty hard to co-relate with today’s world.

More than anything, this book has given a ‘structured framework’ for individuals to think about high-tech innovation and product marketing. Working in the ‘engineering’ world we tend to believe coding and bug fixing are the only part of the product. In reality they are just the tip of the iceberg and there is much more things happen after the engineering releases the product. As a matter of fact no organization fails because of its technical competence as most of them become victims of the ‘chasm’ as they fail to market to product by showing a ‘compelling’ reason to buy.

Overall this book is one of the all time classics, which is a must read for technology professionals. After reading this book I am able to think why my previous organization (a technology startup) failed. I will write a separate blog about my ‘chasm’ experiences.

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