7. Technology-Enabled Business Models
Sources of Disruption for this Decade
• Eating other people’s lunch
• Software eats hardware
• Op ex eats cap ex
• Services eat products
7
8. Technology-Enabled Business Models
Sources of Disruption for this Decade
• Eating other people’s lunch
• Software eats hardware
• Op ex eats cap ex
• Services eat products
• Leveraging next-generation technology
• Social
• Mobile
• Analytics
• Cloud
8
9. Marketing Disruptive Innovation
What Makes High-Tech Marketing Different?
• High Risk
• Unproven products and promises
• Incompatible and incomplete infrastructure
• Social resistance to change
9
10. Marketing Disruptive Innovation
What Makes High-Tech Marketing Different?
• High Risk
• Unproven products and promises
• Incompatible and incomplete infrastructure
• Social resistance to change
• Low Data
• No product history
• No company track record
• No best practices
10
18. Innovators - Technology Enthusiasts
• Primary Motivation:
• Learn about new technologies for their own sake
• Key Characteristics:
• Strong aptitude for technical information
• Like to alpha test new products
• Can ignore the missing elements
• Do whatever they can to help
• Challenges:
• Want unrestricted access to top technical people
• Want no-profit pricing (preferably free)
20. Early Adopters - The Visionaries
• Primary Motivation:
• Gain dramatic competitive advantage via revolutionary breakthrough
• Key Characteristics:
• Great imaginations for strategic applications
• Attracted by high-risk, high-reward propositions
• Will commit to supply the missing elements
• Perceive order-of-magnitude gains — so not price-sensitive
• Challenges:
• Want rapid time-to-market
• Demand high degree of customization and support
22. Early Majority - Pragmatists
• Primary Motivation:
• Gain productivity improvements via evolutionary change
• Key Characteristics:
• Astute managers of mission-critical applications
• Understand real-world issues and tradeoffs
• Focus on proven applications
• Like to go with the market leader
• Challenges:
• Insist on good references from trusted colleagues
• Want to see the solution in production at the reference site
24. Late Majority - Conservatives
• Primary Motivation:
• Just stay even with the competition.
• Key Characteristics:
• Better with people than technology
• Risk averse
• Price-sensitive
• Highly reliant on a single, trusted advisor
• Challenges:
• Need completely pre-assembled solutions
• Would benefit from value-added services but do not want to pay for them
26. Laggards - Skeptics
• Primary Motivation:
• Maintain status quo.
• Key Characteristics:
• Good at debunking marketing hype
• Disbelieve productivity-improvement arguments
• Believe in the law of unintended consequences
• Seek to block purchases of new technology
• Challenges:
• Not a customer
• Can be formidable opposition to early adoption
35. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
36. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
37. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
Dramatic competitive advantage
38. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
Dramatic competitive advantage
Project focus
39. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
Dramatic competitive advantage
Project focus
Consultants (picked by customer)
40. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
Dramatic competitive advantage
Project focus
Consultants (picked by customer)
Direct sales, opportunistic
41. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
Dramatic competitive advantage
Project focus
Consultants (picked by customer)
Direct sales, opportunistic
Value-based, measured by gain
42. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
Dramatic competitive advantage
Project focus
Consultants (picked by customer)
Direct sales, opportunistic
Value-based, measured by gain
Other categories
43. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
Dramatic competitive advantage
Project focus
Consultants (picked by customer)
Direct sales, opportunistic
Value-based, measured by gain
Other categories
Break-through technology
44. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
Dramatic competitive advantage
Project focus
Consultants (picked by customer)
Direct sales, opportunistic
Value-based, measured by gain
Other categories
Break-through technology
Another visionary in a different industry
45. Market Dynamics
The Early Market
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Visionary business executive
Dramatic competitive advantage
Project focus
Consultants (picked by customer)
Direct sales, opportunistic
Value-based, measured by gain
Other categories
Break-through technology
Another visionary in a different industry
Target market is not under pressure to change
46. The Bowling Alley
Retail Analytics Advanced Threat Detection
Health Care Diagnostics Digital Media Buying
47. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
48. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
49. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
Fix a broken business process
50. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
Fix a broken business process
Solution focus
51. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
Fix a broken business process
Solution focus
Solution completers (picked by vendor)
52. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
Fix a broken business process
Solution focus
Solution completers (picked by vendor)
Direct sales, focused on niche market
53. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
Fix a broken business process
Solution focus
Solution completers (picked by vendor)
Direct sales, focused on niche market
Value-based, calibrated by pain
54. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
Fix a broken business process
Solution focus
Solution completers (picked by vendor)
Direct sales, focused on niche market
Value-based, calibrated by pain
Traditional approaches to problem
55. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
Fix a broken business process
Solution focus
Solution completers (picked by vendor)
Direct sales, focused on niche market
Value-based, calibrated by pain
Traditional approaches to problem
Niche market leader
56. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
Fix a broken business process
Solution focus
Solution completers (picked by vendor)
Direct sales, focused on niche market
Value-based, calibrated by pain
Traditional approaches to problem
Niche market leader
Adjacent niche market
57. Market Dynamics
The Bowling Alley
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist business manager
Fix a broken business process
Solution focus
Solution completers (picked by vendor)
Direct sales, focused on niche market
Value-based, calibrated by pain
Traditional approaches to problem
Niche market leader
Adjacent niche market
Target market is under pressure to change
59. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
60. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
61. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
Keep up with market norms
62. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
Keep up with market norms
Product focus
63. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
Keep up with market norms
Product focus
Compatible products & services
64. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
Keep up with market norms
Product focus
Compatible products & services
Direct & indirect, sales coverage focus
65. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
Keep up with market norms
Product focus
Compatible products & services
Direct & indirect, sales coverage focus
Set by market leader
66. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
Keep up with market norms
Product focus
Compatible products & services
Direct & indirect, sales coverage focus
Set by market leader
Directly comparable products/services
67. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
Keep up with market norms
Product focus
Compatible products & services
Direct & indirect, sales coverage focus
Set by market leader
Directly comparable products/services
Market status: Gorilla, Chimp, Monkey
68. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
Keep up with market norms
Product focus
Compatible products & services
Direct & indirect, sales coverage focus
Set by market leader
Directly comparable products/services
Market status: Gorilla, Chimp, Monkey
Adjacent mass market (geographic)
69. Market Dynamics
The Tornado
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Pragmatist IT manager
Keep up with market norms
Product focus
Compatible products & services
Direct & indirect, sales coverage focus
Set by market leader
Directly comparable products/services
Market status: Gorilla, Chimp, Monkey
Adjacent mass market (geographic)
Target market is under pressure to change
71. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
72. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
73. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
Lower costs, better value
74. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
Lower costs, better value
Systems focus
75. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
Lower costs, better value
Systems focus
Outsourcers (picked by customer)
76. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
Lower costs, better value
Systems focus
Outsourcers (picked by customer)
Indirect sales, maintenance focus
77. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
Lower costs, better value
Systems focus
Outsourcers (picked by customer)
Indirect sales, maintenance focus
Set by lowest cost vendor
78. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
Lower costs, better value
Systems focus
Outsourcers (picked by customer)
Indirect sales, maintenance focus
Set by lowest cost vendor
Commodity suppliers
79. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
Lower costs, better value
Systems focus
Outsourcers (picked by customer)
Indirect sales, maintenance focus
Set by lowest cost vendor
Commodity suppliers
Established customer relationships
80. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
Lower costs, better value
Systems focus
Outsourcers (picked by customer)
Indirect sales, maintenance focus
Set by lowest cost vendor
Commodity suppliers
Established customer relationships
Other members of your installed base
81. Market Dynamics
Main Street
Target Customer
Compelling Reason to Buy
Whole Product
Partners and Allies
Distribution Channel
Pricing Strategy
Competition
Positioning
Next Target Customer
Conservative IT manager
Lower costs, better value
Systems focus
Outsourcers (picked by customer)
Indirect sales, maintenance focus
Set by lowest cost vendor
Commodity suppliers
Established customer relationships
Other members of your installed base
Target market is not under pressure to change
82. Key Takeaways
• Each stage is distinctly different
• What causes success in one causes failure in the next
• Different playbooks required at different times
• Often need to change roles to get the right leader in place
• Multiple products at multiple stages
• Enterprises must segregate their efforts by life cycle stage
• End-to-end alignment is key to success
• Must get all players rowing in the same direction
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83. Q & A
• How do you deal with the chasm on a limited budget?
• How do you recruit an ecosystem to a niche market?
• How do social networks affect crossing the chasm?
• How do you use this model to do root cause analysis on slow sales?
• Other questions?
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