Inside The Tornado - Gatton College of Business and Economics

Inside The Tornado by Geoffrey
A. Moore
• From standard diffusion theory (Everrett Rogers),
the types of customers over the life cycle of
diffusion are:
• Innovators or Technology enthusiasts
• Early adopters or Visionaries
• Early majority or Pragmatists
• Late Majority or Conservatives
• Laggards or Skeptics
The Chasm: v-p gap or the
growth phase
• Visionaries
support revolution
break away from the pack
follow their own dictates
take risks
motivated by future
– seek what is possible
• Pragmatists
support evolution
stay with herd
consult with their
– manage risks
– motivated by present
– pursue what is probable
Success factors for crossing the
• Pragmatists want 100% solution to their
problem or the whole product
– the minimum set of products and services
necessary to ensure that the target customer will
achieve his or her compelling reasons to buy
• Segment the market
– do put all your eggs in one segment’s basket
Choosing a segment
• Is the segment well funded and accessible to sales
• do they have a compelling reason to buy?
• can we deliver (albeit with partners) deliver a
whole product to fulfill that reason to buy?
• Is there entrenched competition that will make it
impossible for us?
• will a win in this segment allow us to leverage to
sample bowling alley
• regulatory submissions
• pharmaceuticals
– medical equipment regulatory submissions
• food processing regulatory submissions
– manufacturing pharmaceuticals
– manufacturing medical equipment
• pharmaceutical R&D
Success principles in the bowling
• Pick on someone your own size
• Focus on end user or economic buyer
Getting buy-in
• Solve an important problem for end user
• demonstrate that the problem is because of
current technology
• show how you solution is a technology fix
to their systemic problem
• exhibit mastery of their application
• ask for business, having overcome
The tornado : signals
• what pragmatists do
– when it is time to move, let us all move
– let us all pick the same vendor for the new
– once we start, let us move fast and get it over
with to minimize end user nuisance
Lessons from Oracle
• Attack the competitor ruthlessly
• expand your distribution as fast as possible
• ignore the customer
Lessons from HP in the PC
printer market’s tornado
• Just ship
• Extend distribution channels
• Drive to the next lower price point
If you refuse or neglect to supply any
channel with your product, you leave that
flank unprotected
Intel and Microsoft lessons
• Only the paranoid survive
• recruit partners to create a powerful whole
• Institutionalize this whole product as market
• commoditize the whole product by
designing out your partners
• Tornado forces are bigger than any one
company’s ability to control, so don’t try.
• Don’t introduce discontinuity during a
• Tornadoes design service out, not in
• Don’t bet on preventing a tornado