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Why Scaling Sales in Pre-Chasm Doesn’t Work

(This post originally appeared on LinkedIn here)


Early-Market buyers (Innovators and Early Adopters) are willing to try out innovative products and services to achieve break-through business improvements. They are focused on the technical aspects of the offering and willing to take risks while they are less concerned with financial and legal aspects. Therefore they want to talk to the technical staff of a vendor, ideally the founder themself, and hence sales is founder-led.


It makes sense to employ a limited number of salespeople to follow up on inbound leads and carry out some of the leg work, but at this stage customers do not perceive value in spending time with them and prefer talking to solution architects and the like.


In Mainstream (Early Majority and later) the picture looks completely different. Buyers in this stage are more interested in the business case of a product or service and risk averse. They want to see and be connected to references, and an ecosystem of partners helping them to implement and operate the new solution. So between Early-Market and Mainstream there is a major shift in buying decision criteria for which Geoffrey Moore coined the term "Chasm".


There is also a fundamental difference in the competitive landscape. In Early-market the innovation is first neglected and later discredited by the incumbents as immature and non-proven. But they don’t yet have a vision for a competitive offering.


In Mainstream the incumbents realized the threat and take it seriously. They start to make acquisitions and build product roadmaps to tell customers that while they don’t have a competitive product yet they will have one within the next months. To succeed in this market the vendor must have a salesforce capable of actively influencing and managing the buyers’ decision making process.


Besides scale, also the required sales skillsets are different in pre- versus post-chasm. In pre-chasm sales’ job is to remove hurdles for Early-market buyers, e.g., finding a way to purchase the offering while the vendor is not yet listed and doesn’t fulfill standard procurement requirements, tweaking the pricing model to support the customer’s business case.


In Mainstream sales must foresee and pre-empt the competitions’ counter strategies, compensate for the lack of history with the customer, tie their value proposition to the few Unique Selling Propositions (USPs) still left after the incumbents are playing catch-up.


Now, let’s look at what happens when you scale sales in pre-chasm.


First, you hire the skillsets required in this phase: highly energetic, ambitious trailblazers focused on Landing at new logos, enjoying the lack of discipline the immature organization imposes at this stage and the founder’s willingness to forgive breaking rules as long as it results in wins.


The number of incoming leads will not grow just because you hired a bunch of new people so they will compete for a given number of opportunities. Now you expect them to actively push your product into the pre-chasm market which makes up only about 16% of the Total Addressable Market. As a result, they will storm post-chasm buyers not ready to make a purchase yet but interested to find out when there is the right time to join the bandwagon.


The pipeline will grow, opportunity sizes will grow, but unfortunately also sales cycle duration will grow as Mainstream buyers wait for the offering to be mature enough. Management will become impatient, blame sales for being incapable of selling the fantastic USPs. The revolving door will start to spin, cash burn will explode, desperate salespeople will make promises management is not aware of, a backlog of liabilities will build up and explode after a while preventing the vendor from establishing references they desperately need to cross the chasm.


Finally, after the vendor made it into Mainstream against all odds, they have a salesforce lacking the skills required at this stage. Their lack of discipline will collide with the rest of the organization as it builds out additional capabilities in Partner and Delivery Management to meet market expectations. Mainstream customers will become impatient as sales remain short-term focused, leaving after the deal was closed and returning in the Expand phase still with a Land mindset.


After winning pilots at large enterprises the vendor will fail to capture the following roll-outs handing them to the incumbents on a silver plate. Initial pilots will be retired after the customer made up their mind on who the strategic vendor for the new category will be. Growth will first level out and after conversion rates imploded revenue will start to be flat with the remaining loyal pre-chasm customers.


So what should a vendor do in pre-chasm instead?

  1. Scale Marketing to educate the market, generate incoming leads, build the brand, and communicate the emerging references to the Mainstream buyers still sitting on the fence.

  2. Scale Technology Management to educate leads from Early-market buyers, provide feedback to product development, and ensure a smooth implementation with short Time-to-Benefit.

  3. Monitor the market for its maturation and start to hire experienced post-chasm sellers once they successfully landed pilot implementations at Mainstream buyers.


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