Businesses are using technology and data to reinvent themselves. They know speed matters. Their customers expect these new digital experiences and they are being challenged by new players born in this digital age. This message comes through loud and clear when I recently read Zone to Win for the second time. When I had the chance to sit down with Geoffrey Moore, author of that book and Crossing the Chasm in a recent LeadingEdge webcast, I had the opportunity to address the topics of technology, growing businesses, and Moore’s thinking around the ideas of disruptive innovation and its impact on the way in which companies bring their products to market and sell. Here a few highlights of that conversation.
Geoffrey Moore: Pick one big bet, not to disrupt existing revenue as you make investments and innovate for the future. It's a very different challenge depending on whether you are doing it the first time, or you already have an existing business that you're optimizing. When you're going through a J-curve the first time, the venture capitalist is on your side. Everybody that's joined the company joined it because this is a very exciting journey. The second time around, you have a lot of internal conflicts because now, if you go through another J-curve, you've got to put at risk the results of the first J-curve.
Geoffrey Moore: You cannot share the same go-to-market envelope (sales, marketing, professional services and partner development) with an existing business, and multiple new businesses. That's just too much. There's not enough elasticity in your go-to-market to do that, or in anybody's go-to-market.
Geoffrey Moore: In other words, are you trying to use the same sales force, the same professional services and support force, and the same marketing organization? If you're trying to get synergy out of those three organizations across both the old and the new. If you really want focus, one is the max.
Geoffrey Moore: Oftentimes the question is: How do you know if you're picking the right one? And the truth is, you don't. You can't. But the thing that we have learned is picking one. We learned this from Crossing the Chasm. Picking one is the most important success factor as opposed to picking the perfect one. As soon as you pick two, you're dead.
Geoffrey Moore: Somewhere along the line — and I use 10 percent as roughly the right spot — people do start making budget for it. Your sales force does want to sell it. Even your existing customers are interested in it. And your investors get excited about it because now you're in a new category that's growing faster than your legacy business.
All of a sudden, all those risks are forgotten and forgiven. Then it is time to get to that 10 percent level, and it takes at least 10 percent of your go-to-market envelope to get there because it's so inefficient to sell a new thing. People don't have budget for it. Your sales force doesn't know how to sell it. It's not what you're known for. It's a really tough problem.
Geoffrey Moore: Yes. You have to use venture metrics for the new initiative, which is all about growth, acceleration, building the new ecosystem, and getting dominant share in the new category.
Geoffrey Moore: If you have an established book of business, and if your core investors are saying, "Don't lose this," then you have the conflict that a large company has, too. It's the same conflict. In other words, it’s not about size.
Geoffrey Moore: I think B-to-B and B-to-C are still extremely distinct. But what's blurring the lines is that B-to-B-to-C is becoming the hot ticket. This is: Company A is helping Company B deal with their C more digitally. And that's the big deal. That's why I think the lines feel like they're blurring.
Geoffrey Moore: Artificial Intelligence is probably the single most disruptive thing I've ever seen. It's allowing us to work at a volume and at an efficiency that transcends human consciousness. It's machine learning first, and AI second. Machine learning is what starts to scale. As you learn, you can transform it into human-understandable strategies.
Geoffrey Moore: Although I've updated it two more times, I have not changed a single word of the prescription. All I've changed is the examples. I would say: In 10 years, something called B-to-C (business to computing) is going to change the world in ways that's going to not involve Crossing the Chasm. One thing that I learned about Crossing the Chasm 10 years, 15 years later is it's a B-to-B model. It's not a B-to-C model. You can jam it into B-to-C, but that's not the right thing to do.
To watch the full interview, check out the Leading Edge webcast replay.