After 30 Years, Crossing The Chasm Is Due for a Refresh: Why Markets Are Larger Than They Appear

This post is by Jeff Bussgang from SEEING BOTH SIDES

When I was at Open Market in the 1990s, our CEO gave out the recently published book, Crossing the Chasm, to the executive team and told us to read it to gain insight into why we had hit a speed bump in our scaling. We had gone from 0 to $60m in revenue in four years, went public at a billion-dollar market cap, and then stalled. We found ourselves stuck in what author Geoffrey Moore called “The Chasm” where there is a difficult transition from visionary, early adopter customers who are willing to put up with an incomplete product and mainstream customers who demand a more complete product. This framework for marketing technology products has been one of the canonical foundational concepts to product-market fit for the three decades since it was first published in 1991.

Recently, I have been reflecting on why it is that we venture capitalists and founders keep making the same mistake over and over again — a mistake that has become even more glaring in recent years. Despite our exuberant optimism, we keep getting the potential market size wrong. Market sizes have proven to be much, much larger than any of us had ever dreamed. The reason? Today, everyone aspires to be an early adopter. Peter Drucker’s mantra, innovate or die, has finally come to pass.

A glaring example in our investment portfolio of market sizes is database software company MongoDB. Looking back at our series A investment memo for this disruptive open source, (Read more...)