Crossing the chasm
The gap between early adopters and the mainstream is a graveyard for products that don't pick a beachhead.
Geoffrey Moore's 1991 book on B2B tech adoption. The adoption curve has five segments:
- Innovators (2.5%): love new things, will try anything
- Early adopters (13.5%): visionaries, will try things if they see strategic advantage
- Early majority (34%): pragmatists, want proof and references
- Late majority (34%): conservatives, only switch when something is fully proven
- Laggards (16%): skeptics, only switch when forced
Between Early Adopters and Early Majority sits a chasm. It's the deadliest part of any product's life.
Why? Because the two groups want completely different things from a product:
- Early adopters tolerate rough edges. The early majority will not.
- Early adopters take referrals from anyone. The early majority wants references from people just like them.
- Early adopters buy for vision. The early majority buys for proven value.
- Early adopters are forgiving when things break. The early majority leaves and never comes back.
Most products die in the chasm because founders mistake early-adopter traction for general market traction. They scale spending, fail to convert pragmatists, run out of money.
Moore's prescription: pick a beachhead. A single, specific market segment where you can dominate. Become the obvious choice for that segment. Use the references and case studies to expand to adjacent segments. Don't try to be everything to everyone in the early days.
The classic mistake: a B2B SaaS company gets 50 customers from 50 different industries. Each customer has unique requirements. The product becomes a Frankenstein. They can't sell to any one industry well because they're not specialised enough. They die in the chasm.
The correct move: pick one industry. Pick a sub-segment of that industry. Become the absolute best option for that segment. Get all the case studies. Then expand to adjacent segments using the references as social proof.
For investors: when looking at a B2B startup, ask "what's the beachhead?" If the answer is "we sell to everybody," they're probably going to die in the chasm. If the answer is "we sell to mid-market US dental practices with 5-20 employees," they have a chance.
A related principle: the chasm exists for B2C products too, just less sharply. The early adopters of Instagram (photo nerds) wanted different things from the early majority (everyone). Companies that successfully cross consumer chasms usually rebrand themselves on the way.
Examples in the wild
HubSpot in 2008 was a small player in marketing software. They focused tightly on SMBs in services industries. Once they dominated that beachhead, they expanded to mid-market and other verticals. The discipline of staying small first was what let them get big later.
ServiceTitan in trades. Toast in restaurants. Procore in construction. Vertical SaaS that dominates one industry before expanding is a repeatable pattern. The companies that try to be 'horizontal' from day one usually die in the chasm.
Career-wise, becoming great at one specific thing before trying to be a generalist works the same way. The references and credibility from being a specialist let you go wider later. Trying to be wide from day one usually means being shallow everywhere.
Crossing the chasm is one of the mental models we apply through real cases inside the Pareto MBA — a part-time program for professionals who want to think clearly about business.