A common reason that companies fail

I recently had the chance to attend a virtual talk by Geoffrey Moore, the author of Zone to Win, and the seminal Crossing the Chasm. These are books that I’ve known about for many years, and are part of the standard reading in many companies.

During the Q&A, I was lucky enough to have my question upvoted to the front of the queue. It was a simple one:

“Given Crossing the Chasm is so well known, why do companies keep making the same mistakes?”

Geoffrey chuckled, and cracked a joke that perhaps it wasn't THAT well known. He then gave a more serious answer. Companies make the mistake of thinking they are in the Tornado when they aren’t.

The tornado is a phase in the product lifecycle where a product experiences rapid growth. This is after it has crossed the chasm between early adopters and the early majority. In the Tornado, products can expect explosive growth and market expansion. 

It is easy for companies to misinterpret early success, and think that the market is ready for their product. This can lead to pressure from shareholders to move faster, and an unwillingness to accept that the product is not ready for the early majority.

The early majority comprises people that don’t want to be part of an experiment. They expect the product to work seamlessly. Early adopters and visionaries are fine with being guinea pigs. They will accept flaws to be ahead of the curve. The early majority expects mature documentation, services, and support, with a bug-free product.

Unfortunately, it seems easy for companies to get excited about early success or hype. They think that this means that the product is ready for mass consumption. This, despite the fact that a 30 year old book, that everyone knows about, discusses exactly these problems.