Crossing the Chasm Between Markets and Meaning with Geoffrey Moore (Part Two)

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Forbes Books presents the Startup Science Podcast
with Gregory Shepherd, brought to you by
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Startupscience dot Io. Greg is an
entrepreneur who has built and sold twelve businesses.
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He's a recipient of four Private Equity
Awards and is a featured ten X
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speaker and Forbes author. Here's Gregory
Shepherd. Welcome back to my talk with
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Jeffrey Moore, the author of my
all time favorite book, Crossing the Chasm.
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Now, Jeff, in part one, you walked us through the concept
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of the chasm and crossing the Chasm. But now I want to talk to
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you a little bit about storytelling.
I've read a lot about storytelling and your
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content, and when it comes to
Crossing the Chasm, perhaps you could enlighten
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everybody and the listeners here on the
concepts of storytelling. Well, you know,
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so, I don't know if you
know, Gregory, but I was
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originally an English professor. I didn't
know that I was going to ask you.
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I'm so curious, like where you
what your background is, because you're
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so you have like an instinct for
this, and I'm like, how did
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this happen? I don't think.
I don't think you get to have the
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only claim to neurodivergence. I think
I can be neurodivergent too, rift on
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stories. But the point is I
think so. I think stories is kind
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of a universal problem solving laboratory,
where basically you can experiment with a strategy
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by essentially putting it into a story
and telling a story. But in said,
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I would argue that every entrepreneurial pitch
to a venture capitalist is a story.
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There's no there's you. You don't
have me. You might have a
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prototype product or a demo, but
but you'll have much else. So that
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what the venture capitalis listening to is
will tell me it, tell me,
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tell me it didn't say this,
but tell me a story about how this
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would change the world or why this
would change the world. And venture capitalis
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turns have to be very good literary
critics because they're listening to this story very
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skeptically. They're trying to say,
what, you know, what, how
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would this a just a real good
whatever. But the point about narratives is,
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first of all, they allow you
to experiment with possible futures. Science
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fiction is wonderful doing this of course
as well. But then secondly they inspire
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people. So in other words,
you tell a story that says, you
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know, like Steve Jobs when he
was John Scully, he said, do
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you want to make sugar water for
the rest of your life or do you
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want to change the world? You
know, And so there's a story.
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And Steve was an incredibly If you
ever listened to his graduation speech to the
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Palo Alto High School, I mean, it's just super inspiring and the stories
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that they tell and so so between
between the ability to use storytelling to explore
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alternative futures and you know what you
now. At business schools they will call
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storytelling scenario planning. So what they'll
say to you is, look, you
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should try several scenarios. Okay,
to me, those are just stories.
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Right by the way, if you're
a salesperson, when you're essentially engaging with
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a customer, there's two stories.
You want to know what you want to
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tell your story, but you really
should listen and get the customer to tell
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as much of their story first as
you can so that your story connects with
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their story. And we all have
this, Well, I have a story
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about my career. You do have
a story about my job, or I
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have a story about my company,
or have a story about my customers problems
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and so all those stories are ways
that we carry around. But what do
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you do for lesblie or And if
you ever have a kid, he wants
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to figure out, Like I mean, my kids were figuring out if I
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I was just unemployed for most of
my life, what does he do?
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But eventually, eventually I was able
to graft a story that made sense to
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them. But it was like,
well but dad, dad, you have
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the job anyway, So not anymore
nowadays everybody, Oh yeah, right,
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at some point, it's no point
that the story caught up. Yeah,
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it was good. So I'm going
to move backwards to go forward because I'm
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dying because you brought it up,
and I'm just really dying to know.
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How did you get to the point
from where you're an English professor to the
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point where you're writing one of the
most impactful books in the whole startup industry?
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How did that happen? Right?
So, I was an English professor.
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I was teaching at a small college
in Michigan. But Marie and I'm
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from Oregon. I went to Stanford, MA Reice from Palo Alto It Living
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in Michigan wasn't the right fit for
us in our family. So we just
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help picked up stakes and we said, okay, we're going to move back
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to the Bay. And when we
did that, there was no chance I
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was gonna be able to stay in
academics. So jobs and academics were very,
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very very scarce. But I thought, well, you know, I
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can do something. So anyway,
I ended up joining a software for as
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a training director. And you know, I said, I don't know anything
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about software, but I think I
know something about training. And the guy
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that hired me, I think was
just wanted to mentor somebody who was young
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and brighton, you know, enthusiastic
or whatever. So he said, well
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you'll learn, and I'm going I
don't know about that. No, no,
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you'll look, you'll look. And
so what it was. So I
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joined the software company after I've been
there for a few years in kind of
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a staff role. I'm thinking,
I don't know if I could be a
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staff guy all my life. I
think in tech you either have to make
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it or you have to sell it. And I didn't think I was going
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to be able to make it,
so I thought, okay, I'll sell
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it. Well, it turns out, so I just wangled my way to
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the salesforce and I got a couple
of sales positions and other companies going forward.
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But it turns out with selling,
I was really good at opening,
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but I was not very good at
clothing. That's not a good quality in
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a salesperson. Basically, Basically I
had halfway through somebody because I said,
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well, what about marketing? No
marketing, you know, what's that?
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Just storytelling? Right? So anyway, I go, well, this is
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fun, and I end up joining
a company called Regis mccount. So Regis
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mckeller was the guy who kind of
embedded high tech pr. Prior to Regis,
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people thought marketing just was Procter and
Gamble and was just you know,
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brand marketing and catchy logos and jingles
and whatever. And Regis was the first
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guy said no, for technology companies, marketing is education. It's it's it's
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it's an ecosystem development, infrastructure development. So that was and I went there.
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It was like, wow, this
is really cool. Well that was
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where and it's all it's the keyword
was positioning. So you went to Regis
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mccanna to help you position your company, which was really really good idea well,
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positioning a story. I became kind
of the storytell I mean I didn't.
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I didn't actually run a group.
I just kind of went from project
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to project project. Well, if
you see enough projects after a while,
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it's like, hey, wait a
minute, something, something's going on here.
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And what was going on was we
would have these great repositioning programs.
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The company would come out of the
gates. They'd be on a they'd be
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a business week, they'd be at
the Wall Street Journal, they'd be in
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the New York Times. They'd like
whoa, and then a couple of years
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later going whoa, whatever happened to
them? What happened? And they just
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they kept on cut, going off
the radar, which is so that's where
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the chasm Idea kind of experienced it. Oh cool, that's that's where that's
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what you are. This is like, you know, I'm like, uh,
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talking to a hero of mine and
I'm like sitting here getting all this
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backsack. It's like, you know, you have those people to say,
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if you can meet one person and
spend time with them, what would you
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say. I'm having one of these
conversations. I know I'm fangirling a little
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bit, but I don't care.
So another question, going back on the
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going back on the rails here.
Sorry about that. I'm just having a
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great time talking to you. To
be honest with these When you look at
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how the digital transformation landscape has changed
since you wrote Crossing the Chasm. What
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do you see the different now than
what you saw when you wrote that book.
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Oh, it's hugely different. When
I wrote the book, if you
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were going to take a startup software
company, you probably had to raise about
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a million bucks. You had to
because you got it. You had to
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get computing, and you had to
get the databases, and you had to
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get you had to get offices,
and you had to do all this stuff.
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And today, because of cloud computing
and because of the whole remote infrastructure,
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because of the you know, the
kind of video conferencing stuff that you
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and I are on right now,
and zoom and teams and you know and
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webbegs all these incredible things, you
can get into this game much much quicker.
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And and so that that I think
is there's so much technology out there
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now that you can make, you
can actually be you can have an impact
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a lot sooner. So so I
think the technology adoption life cycle many things
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has become the chasm has either become
shorter or in some cases non existent.
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You actually could just start your company
on the other side of the chasm because
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there isn't that much risk in trying
a new thinning. There's some there's always
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some because in particularly if you're a
new company, you know customer business customers
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very worry about that. But that's
why I said, consumer is a little
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bit different. If you're just a
consumer and you want to hear, you
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download it and try it. If
you don't, I could don't don't do
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it. So that I think that
was never possible. Well, when we
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were starting, it was all business. First of all, there was no
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consumer computing at all. Yeah,
and then for a decade it was really
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business computing brought home. So it
was like the IBM PC at home.
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It wasn't really until the beginning of
this century where Facebook and the well facebook
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nets, get Navigator, Facebook,
you know, Google, Yahoo, eBay,
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a handful of these companies, and
all of a sudden it was like
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whoa. I mean, we had
a decade where as a consumer you had
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a better I experience than you didn't
work. It's like, yeah, you
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remember that, you go, hey, how come it works? And they
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were using Maine Fransuf eating. Oh
so terrible. Wait a minute, and
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so so consumer computing kind of took
Oh. Now I think we've actually that
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wave is now receding, and I
actually think now business the businesses getting its
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resurgence. We released a ton of
trap value in the consumer world. But
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boy, if you look at education, if you look at healthcare, if
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you look at law enforcement, if
you look at trying to onshore or manufacturing
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again call centers. I mean,
there's a ton of trap value to be
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released in the coming deck. Yeah, I love it. I always think
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when you say trap value, I
think about this is a terrible analogy,
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but I think about like gas trapped
in rock. No, that's exactly that's
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where it come from. That's the
oil industry, right o way. Really,
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it's exactly where it came from.
I thought it was a terrible Now
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you're doing it's great. You get
like a gusher and then yeah, no,
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it's exactly it. So if there's
no oil, do you ever what
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they call it? Dry well?
And by the way, part of being
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an entrepreneur is understanding when you've done
a good dry well and and get out.
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Yeah. Yeah, By the way, you might take the same technology,
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but take it to a different place, or you might buy a different
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technology, or you might do both. So let's do If you don't mind,
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I'm going to come off script a
little bit. I want to do
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a little test with you a little
bit. I want to I want to
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tell you what what I've been up
to and then give you the opportunity to
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criticize it. Okay, yep.
So I spent five years studying why,
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when, and how founders fail,
and then in that process I found that
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the founders were failing for for the
reasons that they thought they were failing for
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weren't the real reasons. As usually
you have to ask the five whys,
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and you dig down and you find
out what the real reasons were. So
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then I built a platform that takes
everything that's in the founder ecosystem into one
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place, right, so it allows
them to take classes, and then it
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gives them tools like you could do
your market sizing, find investors, do
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grants, all that kind of stuff. Because the concept that I had was
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the trap value, was that founders
were failing because everything was fragmented all over
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the place and there was no consistent
way of talking about things. There was
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no consistent life cycle everybody was thinking
that a life cycle was around, which
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is just something that happens in a
life cycle if you look at that model.
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When I think about it, the
trap value for me was the fact
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that founders are failing at ninety percent
for like the last twenty years, and
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that just seems outrageous. So is
that Can you criticize that and talk about
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it in a little By the way, can I go back to your oil
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industry, because it's so fragmented,
it's like sacking, It's like like shale
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oil totally exactly. There's oil everywhere, But how the heck do you get
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it up? So and you know, earlier on I think one of the
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earlier successes are green shoots for this
problem was the Y Combinator. You know,
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yes, yeah, yeah, the
hold. But what what you're saying
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is, look, there's too many
people in two any directions. We need
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to create a community. It's not
unlike a religion really, you know,
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we need to come together a congregation
or whatever you want to call it.
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Yeah, and say this is how
this works. Does everybody agree? Yeah?
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And by the way, we can
have we can even have disagreements.
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But the boys were having discussion we're
all focused on the same stuff, and
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we're all wanted to help each other, right. I think that that helping
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each other piece is really important too, because nobody makes it beout themselves.
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Yeah. Yeah, I mean my
whole concept is and recently, you know,
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we're working with Fulbright on this,
which is this concept of trying to
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use marginalize people, you know,
people that have been otherwise you know,
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brushed off to the people like me, right, who were just brushed off
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to the side religion, income,
all that that's our wealth, and then
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use them to solve the problems that
they experience because they are the subject matter
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experts that only experience that. So
is this like does this work in your
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well, I'll tell you this one
wonderful example. So one of my clients
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that's been a client a relationship I've
not had for over a decade, is
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with Salesforce and it has been Mark
Bennios and his team. You know,
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his team's turned over a bunch of
about quite a lot over the last ten
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years, but the Mark's always been
the center of things. And one of
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the things that's that they invented very
early on are about ten years ago,
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was something called Trailhead. Yeah,
Trailhead was where you could learn how to
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do and where you could learn to
be a salesforce administrator. We'll talk about
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a marginalized community. So salesforce,
a lot of the salesforce administrators had been
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administrative assistance, or they'd been you
know, delivery, they whatever they've been
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doing. It wasn't it wasn't a
white collar, you know job right,
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and but the trailblazers thing let them
come in. And and of course,
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now first of all, they're having
a lot of success, but there's a
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salesforce economy. I mean, it's
like a huge worldwide. They've created their
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entire own world exact amazing. Yeah, salesforce dos have any magic. Salesforce
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just has will and intention and values. But there's no reason why anybody can't
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do that. And so I think
that notion of coming together, and I
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think there's to me, there's a
there's a key component. I call it
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being in service too. If you
come together with the idea that we all
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want to get rich, the problem
is God bless you, but I don't
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care if you're rich. But if
you say we're coming together to help so
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and so or to achieve something or
other. Either I might say, well
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I don't care about that either,
But there are a bunch of people who
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say, really, you want to
make the climate, you want to attack
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climate D, you want to help. I want to help. And so
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all of a sudden you can pull
people together. And so that in service
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to thing is important as well.
So when you think about this whole idea
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of innovation crossing the chasm and moving
forward, then it sounds like almost there's
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a component of bringing a something that's
bigger than you and something that requires a
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community to participate to overcome whatever this
fundamental problem is that's stuck in the chasm,
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this unreleased value. Yeah, and
by the I just was reading the
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press today. The Nobel Prize was
a Nobel Prize given yesterday. I think
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in medicine for the people who invented
the messenger RNA technique that allows the vaccines
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to be created so rapidly. So
the people at Pfizer and the Moderna they're
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both relying on this technology. Well
that's a technology that basically was in the
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chasm. I mean, first of
all, it was incredibly hard to get
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the messenger or and they not destroyed
by the cell, so that The big
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discovery these people did was how do
you get through that? But then how
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do you how do you do all
the engineering uh to make you know,
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the carry the back seat. And
then somebody had to create another company had
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to create a kind of a container, like a fat cell. It's like
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a little bubble, a fat bubble
to put the thing inside so it could
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get inside the cell. All this
stuff is going on, But the point
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was they were in service too too, right, Yeah, And they it
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started actually with HIV they were trying
to solve that. But then when the
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COVID team, then when the flu
guys saw they thought, well, you
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know, we got we got We
always have to start a flu vac seat
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over and over and over again,
takes four or five years to get it
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going. Got to be a better
way, and so there was a real
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use case and now it's it's changed
menacements. Yeah, it's just very exciting.
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So when you think about the chasm, what are the most common trips
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that founders make when they're trying to
get a craw like where do they fumble
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and fall? Founders tend to be
envisioning global domination, a huge horizontal infrastructural
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change, right because they're so excited
because they look at it and they go,
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let's think of the possibilities. Yeah. And secondly, they're also looking
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for business. So between the fact
that they're looking everywhere and they want they'll
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take kind of almost any deal they
can get, they end up taking deals
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all over the place, kind of
like chicken box. And the problem with
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that is you never build a reputation
with a community. You have a deal
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here, you have a deal there, you have a product here, you
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have a pro there's no ecosystem,
there's nothing nothing. The number one failure
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point is not picking a single target, and then the second thing is not
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staying on target until you get until
you essentially we call it knock over the
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first bowling pen. Once you knock
over the first bowling pen, the second
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start forth or they'll come. But
if you don't knock over the first one,
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you're going to be in the chasm
until you brun out of money.
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So they basically do a spray and
pray and fragment their own and destroy their
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own ability to get to go drill
into something and create that that community exactly.
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And if if you get a fact
you I never use the phrase create
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community until just used to use the
right now, and I think it's I
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think that actually is I've said ecosystem, which is great. Ecosystem is part
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of it, but I think community
is a better word because the customers at
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the center, they the customer's need
is the thing that pulls that community to
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gather. And then and then if
you're in service to that need and genuinely
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in service that need, meaning I'm
not leaving until this problems fixed, and
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then then you will succeed. I
mean, the world will pull you in.
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Mm hmm. I'm curious now as
we close out the podcast, I
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don't want to take too much of
your time because I could just hang out
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with you. I mean, you
are so and I'm just like in awe.
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I mean you have to realize that
as a you know, I've done
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twelve startups and twelve exits and when
I started, you know, your book,
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when I came across your book,
it was one of the books that
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I was like, that changed my
life, right, it was one of
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the books that changed how I thought
about these things and how I worked through
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them. And I all my portfolio
companies, I always tell them, you
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have to read this book. It's
just a real honor. And if anybody's
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listening that hasn't read Crossing the Chasm, I mean, this thing is like,
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this is like a must read if
you're a founder. I'm telling you
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it's it's incredible and nothing has been
written quite like it since then. So
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if you're looking forward right you yourself, what are you doing now? I
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mean you know you you went out
there and you laid this foundation, and
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it's it's just changed people's lives like
mine. What are you doing now?
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Like what are you up to these
days? Well, it's so interesting.
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So for most of the the the
book of the written, I had to,
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by the way, rewrite the book
a couple of times. I didn't
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change the the the any of the
models, but I had to change the
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examples because it's yeah, so I've
done that twice. But I would say,
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given that the book came out in
nineteen ninety one, and I would
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say for most of the nineties,
all the way up till maybe the when
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the tech bubble popped in like two
thousand and one, I always focused on
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the startup. I was focused on
on the community that the use serves.
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What happened when the bubble pop was
I ended up shifting my focus to established
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enterprises a because they could they could
employ me. Yeah, the startups are
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kind of in trouble for right there. But but what I realized when I
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started working with the established enterprises is
they have to cross the chasm too.
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Yeah, they had a different problem. If you're a startup and and you're
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you have to cross the chasm and
you get you get some money, you
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only have one place and a ploy
it. I mean, you're going to
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put it right where you need it
now. But if you're if you're a
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Kodak where your business with, or
you are general motors, you have a
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lot of places to put that dollar. You can put it in your established
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business and try to eke out a
little bit more money from it, even
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though you know you're being disrupted.
It's just and and by the way,
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you have shareholders who are expecting a
profit every quarter. And I got to
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tell you at the beginning of these
new life cycles, there's no profit.
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That's this loss our profit. The
venture capitalists understand that, but the public
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markets don't. They understand it,
but they don't like it. Yes,
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I've been spending the last ten years. In particular, I mentioned was with
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Salesforce, actually started with Salesforce and
Microsoft. So the last book. I've
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written seven business books, but the
first and the last are the only ones
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that really really matter. The last
one's called Zone to Win, and Zone
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to Win says, if you're going
to be in an established enterprise, you
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have to be able to zone off
your core business, your core you know,
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back off the stuff, all the
stuff that makes you big today from
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your next generation stuff what we call
the incubation zone and the transformation zone.
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And you have to run those zones
very very differently, and you have to
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honor the zone. In other words, you can't say one zone is better
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than the other. They're not better, they're just different. But what you
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can't do is have one size fits
all, which is kind of what people
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were doing. So I've spent the
last ten years helping companies who are established
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enterprises put that framework in place so
that in fact, I'm going to give
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a talk to some banking people this
month. But the subtitle was crossing the
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Chasm inside the belly of a Whale, which is kind of the problem statement.
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Right, Yeah, you're trying to
do and you're giving the whale indigestion.
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I think it's funny because when I
sold one of the companies, I
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sold to eBay Enterprise Marketing Solutions,
and they told me they wanted the minnow
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to swallow the whale. They wanted
my little company to swallow the whale.
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I was just I remember sitting there
going I'm sorry, what so they do
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big companies do acquire companies like like
your company? And then and then the
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question is do they kill it?
Can they assimilate it, or can they
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allow it to do to do change? And so those are and then the
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track record, as you know,
it's not happy. Uh, it's not
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good. And so a lot of
folks on this podcast, if your company
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gets acquired by a big company,
you need to you need to get the
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zone to win book. Just yes, for sure, just just a playbook
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for how would you play this game
inside the bellyble whale. Yeah, it's
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it's absolutely true. I mean I
read it and it helped me with my
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scenario, you know, because I
was dealing with you know, you walk
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in with your few hundred employees and
they have thousands and thousands and you're and
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you're sitting there going, how do
I work with this monstrous beast of moving
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parts and well, and and the
thing is so important is most of that
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beast is when what we call the
productivity zone. So it's it's finance,
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it's HR, it's it, it's
cybersecurity, it's par marketing, it's customer
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support, it's facilities, it's all
those things. Yeah, and God bless
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them. They are there to make
the existing business work more efficiently, ineffect
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and then they're good at it.
But what they think there's also supposed to
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do is bring you into their fold. And the answer is no, that's
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what kills it. That's exactly the
productivity zone and the incubation zone. You
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know, they're both are populated with
very nice people, but they just should
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not They should not around. Yeah. I found it was like I felt
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like I was a a boat with
a really sharp tip, just cruising through
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the water, and then they turned
me into a tanker, you know,
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and now I got the bunch of
headwind and a bunch of weight and I'm
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moving really slow. And you know, one are the things that makes the
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entrepreneur different from the from the more
traditional person in that group is how you
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value time. So the large,
more bureaucratic organizational things say, look,
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well, you need to take your
time. You need you need to think
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more slowly, analytically, you need
to study problems, you need to you
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know, socialize them. And then
because you don't want to make big mistakes.
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And by the way, that's true
big you don't want to make big
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mistakes. But an doesn't make big
mistakes. The entreneur specializes in making little
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mistakes. But you make it very
very and very and you learn. And
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those two, those two zones just
they can they barely can understand each man.
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I really really appreciate your time and
being able to talk to you and
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meet you in person. I hope
that we get to talk again. I
380
00:26:41.599 --> 00:26:45.680
know that I've been fang early so
much, but you have to realize the
381
00:26:45.799 --> 00:26:49.079
impact that you made on my life
at such an early age, you know.
382
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And I was just getting started and
I was like, oh, and
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I was carrying the book around with
me all the time, you know,
384
00:26:56.160 --> 00:27:00.960
and it was just like a it's
a real tree to have you on here.
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And I'm very very appreciative. Thank
you so much for your time.
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00:27:04.279 --> 00:27:07.400
Well, Greg, thank you for
having me on the show. I really
387
00:27:07.440 --> 00:27:11.160
appreciate it as well. And that's
it for another episode of the Startup Science
388
00:27:11.200 --> 00:27:15.519
podcasts founders. As a thank you
for leading the changes in our world,
389
00:27:15.559 --> 00:27:21.680
I'm offering free access to the startup
science platform Visionaries by Gregory Shepherd at one
390
00:27:21.680 --> 00:27:26.200
stop top for founders. It has
everything from a startup academy and free classes
391
00:27:26.720 --> 00:27:30.400
to investor match grant finders, finding
pitch events. Everything you need, all
392
00:27:30.519 --> 00:27:36.000
in one place. Go to Gregory
Shepherd dot com. Click on Visionaries to
393
00:27:36.039 --> 00:27:41.680
access, use code Founders all capitals
for free access to the platform and check
394
00:27:41.720 --> 00:27:44.759
it out for yourself until I see
you next time. No, I'm a
395
00:27:44.839 --> 00:27:49.200
stay my friends. This startup Science
podcast with Gregory Shepherd is brought to you
396
00:27:49.279 --> 00:27:56.200
by startupscience dot io. Founders can
log on to startupscience dot io and use
397
00:27:56.279 --> 00:28:02.359
code thorbes to get free access.
To connect and find out more about greg
398
00:28:02.799 --> 00:28:07.960
Go to Gregory Sheeppard dot com.
The Startup Science Podcast is a production of
399
00:28:08.079 --> 00:28:08.920
Forbes Books.