Vantage Point Article Library
It’s the New Year and I can’t help but think about the future.
The Wall Street Journal ran an article last fall suggesting that the easiest way for companies to determine if a technology really works as advertised is to give it to a 20-something ‘Y Generation’ employee and let him or her play with it. That got me thinking—where are those Generation X-ers? They’re in line now for mid-level management jobs—jobs that have decision-making responsibility, good visibility and rising power within an organization. And, they’re the first group that really grew up using PCs everyday—at home and on the job. That’s bound to have a significant impact on the IT industry.
In the early 1990s, Geoffrey Moore introduced the concept of the chasm in the technology adoption curve. It was a monumental and revolutionary thought—thousands of companies tripped-up trying to transition from early adopter markets to the mainstream (and many didn’t make it). Why? Because they (we) didn’t fully understand the typically large gap in buyer behavior between early adopters and mainstream buyers. His book, Crossing the Chasm, explores the problems of that gap and provides valuable market development strategies and messaging direction to help IT firms ride out the stall in the chasm and transition into the mainstream.
So what does that have to do with the X Generation? Plenty. They are more tech-savvy than any other previous generation of technology buyers. This means their view of using technology to solve business problems will be far more aggressive and progressive than we’ve seen in the past. This type of buyer behavior will fundamentally shift the chasm in the technology adoption curve so it appears later in the cycle or it may shrink or even eliminate the chasm altogether. Obviously, the strategic and tactical implications of this are huge for IT product and services companies—especially for those targeting industries that are more apt to attract and promote X-Gen management.
So, does this mean the lessons in Crossing the Chasm are obsolete? Likely not, but things are and will continue to be much different going into the second half of this decade. If I’m right, it would take a book to detail the effects of this change (which I’m not interested in writing); however I do believe there are three significant ways this shift will affect IT companies:
First, plan to beef up your use of the Internet. This group of buyers will insist on using the freedom of the Internet to do early due diligence. This means your web presence must be fully leveraged—optimized, information-intensive websites, pay-per-click and banner advertising, blogs, webinars, interactive online demos, podcasts and online publications, referral sites, and user groups will all take a front seat to trade shows and print. Drop the email blast—it’s an invasion (unless your list is opt-in recipients).
Second, industrial-strength products are a must. Gen-Xers may be technology enthusiasts, but they’re still pragmatic business buyers. They’re interested in core technology, but they won’t justify a purchase if it’s too bleeding-edge or early-stage. They don’t need complicated “solutions”—tools are fine—but products must be stable, reasonably robust and well-supported.
Be prepared to cannibalize your offerings. Whether you’re in the software, hardware or services business, the pace of product adoption and pace of changing services needs will move faster than we can imagine. That’s the good news if you’re an early stage or high-growth company. But it’s also the bad news. These same companies are sorely lacking in product/service life-cycle management expertise and are unfamiliar with how to plan obsolescence. Not understanding how and when to move on will leave these companies in the dust of their more nimble, creative competitors.
One final thought—if you have a horizontal product, don’t be too quick to focus on vertical or other highly segmented markets. The IT market infrastructure, the Internet and Gen-Xers have forever changed the dynamics of market development where first-to-market with a smart launch means everything, but that’s another article.
copyright 2005, KC Associates, LLC