Yesterday I picked up Geoffrey Moore’s Inside the Tornado; a sequel to his best-selling book Crossing the Chasm.  First off – wow.  What an amazing book.  Both Tornado and Chasm describe the challenges of marketing technology products through each stage of their lifecycles, but I found the latter to be particularly impressive.  I read nearly the entire book this weekend and emailed several relevant excerpts to coworkers.  This one really had me hooked.

A very quick summary of the content

In this book Moore uses catchy nicknames to describe the different phases of the technology adoption lifecycle (Note: all of the capitalized terms below may seem excessive, but I promise they are all well-defined in Moore’s book):

  • First there is the “Early Market,” which is dominated by Technology Enthusiasts and Visionaries.  These customers are willing to bet on new companies and will accept a product that is less than complete in exchange for the opportunity to try it first.
  • Then there is the “Chasm” – the gap between the Early Market and the Mainstream Market where many products languish and die.  The trick to crossing the Chasm (which was the subject of Moore’s prior book) is to focus on one specific market niche, put all of your eggs in one basket, and find a way to construct a “Whole Product” that is acceptable to a more risk-averse audience (the “Pragmatists”) on the other side of the Chasm.
  • Then there is the “Bowling Alley” where high tech companies must focus on individual market niches in succession, first focusing on the front “pin” (the niche that helped them cross the chasm), then expanding to adjacent niches until you have a product acceptable to the entire market.
  • Following the Bowling Alley is the “Tornado” where your product goes mainstream and demand far outpaces supply.  This is a hectic time, but historically the most profitable for companies who are lucky enough to make it there.  The Tornado is where fortunes are made.
  • Then there is “Main Street” where your mature product must continue to innovate to defend against low-cost alternatives.

The Bowling Alley.

Among Moore’s metaphors, I found the Bowling Alley to be the most interesting.  There’s something about looking at a technology market as a series of bowling pins, lined up in formation that is particularly compelling.  For each of the bowling pins, a technology company must develop a product that is good enough for the skeptical technology Pragmatists that inhabit the front part of the Mainstream Market.

The key difference between the Visionaries (who dominate the Early Market) and the Pragmatists (who populate the Mainstream Market) is that Visionaries will accept an incomplete product, while Pragmatists will only accept a complete product.  To hammer this metaphor home, Moore states that Visionaries “see” with their eyes closed, while Pragmatists see with their eyes open (i.e. they want to see a working product).

There are a few secrets to success in the bowling alley, but the one that I found most powerful is actually quite simple, but at first, counter-intuitive.

Moore states that in the Bowling Alley, a technology company must shift their sales efforts from the Technology User to the Economic Buyer.  At first I found this confusing.  Wouldn’t the Technology User be in the best position to appreciate the new solution you’ve developed?  They are the people you’ve studied and who’s use cases you’ve mastered.  You’ve gotten into their heads and built them the product that will allow them to be more efficient and effective.  Why do you have to sell around these people in the Bowling Alley stage?

The problem is that corporate Technology Users are inherently risk-averse.  They’re responsible for maintaining uptime on mission critical systems and it’s always more work for them to change what they’re doing than to stick with the existing tech.  From the point of view of a Technology User, the ideal path is to continue using your current technology and test the new technology safely offline.  This produces the best of both worlds for the user: they get to try the new solution, but they don’t jeopardize stability and they don’t have to work too hard to make a new solution work before they’ve fully tested it.

The problem with this approach from a vendor perspective is that it slows down technology adoption and could lead to a Technology User blocking the sale if they decide the effort required to switch is too great.

In order to get around this issue, vendors entering the Bowling Alley have to undermine the decision-making ability of the Technology User and focus sales efforts primarily on the Economic Buyer.  Showing the efficiency, cost savings and other economic gains of your solution over the incumbent technology will get the Economic Buyer interested.  After all, they’re the ones who will ultimately be getting more economic value.  With the right sales pressure, the Economic Buyer will be able to force the Technology Users to adopt the new technology before they’d otherwise be ready to.  As with any enterprise sale, this operation is tricky and involves building up the organizational power of the Economic Buyer, but it is the only way to get the big deal signed and allow you to reinvest revenue gained against securing your hold on that bowling pin and moving to adjacent pins.

At first it may seem wrong to undermine the decision making ability of the very people you want to help, but this is necessary to push change-averse organizations to adopt new solutions.  In the end, after your clients have reaped the rewards of adopting your new technology, they’ll thank you for pushing them.

The Bowling Alley
Tagged on:         
  • > At first it may seem wrong to undermine the decision making ability of the very people you want to help, but this is necessary to push change-averse organizations to adopt new solutions.

    Now, that’s a moral slippery slope!

    Interesting conundrum, too. If people can’t be trusted to make the best decisions, for them, then who should be trusted with that?

    >In order to get around this issue, vendors entering the Bowling Alley have to undermine the decision-making ability of the Technology User and focus sales efforts primarily on the Economic Buyer. Showing the efficiency, cost savings and other economic gains of your solution over the incumbent technology will get the Economic Buyer interested. After all, they’re the ones who will ultimately be getting more economic value. With the right sales pressure, the Economic Buyer will be able to force the Technology Users to adopt the new technology before they’d otherwise be ready to

    This sounds like mismatched incentives inside the corporation to me. One group gets all the downside (blamed for downtime), the other group gets the upside (lower costs, higher profit margin).

    So, what does a right-thinking organization looking to buy technology do? How should they be structured? What insight do you have into that question after the book?

  • Interesting questions Michael. When it comes to organizations buying technology, I suppose my recommendation would be to defend against bowling alley tactics by preventing tech vendors from cutting the technology user out of the loop. Every decision to adopt new tech should be a joint decision between the economic buyer and the tech user. But- not all organizations are that organized and disciplined.

  • No, they aren’t – but I also think that doesn’t solve the real issue (broken incentives).
    The cost benefit should be just as attractive to the “technology user” (if they’re a decision maker). If the benefit accrues to a different part of the company, corporate accounting should attribute that gain to (say) the IT department.
    I have yet to see a corporate accounting system that attributes cost/performance improvement consistently to the right location. In many cases, (a) you have a business application installed by marketing – say, a CRM – to be more efficient; (b) IT’s annual budget is increased by the predicted amount to maintain and service the system; (c) any improvement in sales/rep, reduced order latency, increased accuracy, etc gets attributes to the marketing department. So the marketing budget gets, basically, increased; while the IT budget is relatively decreased. IT’s only concern is to minimize cost (so they can achieve other goals that might have a higher net benefit), but marketing wants to continue to see improvements in the tech – better documentation/support, remove some pain points in data management, export, formatting, whatever.
    IT departments – rationally – react to this by turning into an internal “vendor.” That is, they start to charge business units for items of work, ensuring that the business unit that accrues the benefit incurs the cost.
    This frequently has other consequences. Not being a real company, customer service is frequently not top of mind – they have a near-captive market – and so they begin to resemble a government agency more than a private company. This is most noticeable in “draconian” regulations imposed by corporate, legal, the chief risk officer, or some other group in an attempt to set a quality floor. But over time, that quality floor … changes, and you get a lot of work being done with not enough benefit.
    A second consequence is that technology decisions become driven by the business user, with internal IT acting as support and vendor management. This isn’t necessarily the best thing, since business users may not (a) fully understand the landscape, (b) be easily swayed by incomplete reports like Forrester Wave, (c) actually trail the market in preferred solutions. So you end up with proposals to buy mediocre equipment (all the features are there, and it’s cheaper!) and IT has zero reason to push back against that (no upside to making the better acquisition).
    Hm. The more I write about this, the worse it sounds. It doesn’t seem like an easily soluble issue.
    Well. It’s no surprise to me, in closing, that tech companies tend to be some of the biggest adopters of technology – buying technology from other companies (e.g. SaaS). A real understanding of the costs of development, plus the ability to realize benefits from a product, tends to re-frame the evaluation.
    I’m a little entertained, for instance, that IPG just upgraded to PeopleSoft HRMS 9.2 (nominally released in 2013), up from PepleSoft 8.x, released in 2006. I was almost prepared to be impressed, but the functionality is identical, many of the same problems are there, and the interface is only marginally better. It certainly doesn’t look like the screenshots and videos Oracle pushes out.
    I can’t imagine how much time and money actually rolling out a proper self-service HR system would save. Doing basic paperwork and answering questions is not something HR staff should ever need to do.
    But it seems like IPG would prefer people to ask their local “talent partner” to do something than to add it to the HR management system so people can do it themselves. This may not be true – there are a lot of issues with regional laws, so a self-service system might be nigh-impossible to create without a lot of errors, and local HR reps are likely better informed – but still. Not upgrading for 8 years, and then not taking advantage of any of the substantive improvements that the vendor has made smacks more of upgrading because the support contract doesn’t cover that version than upgrading to improve HR efficiency.