In his seminal book “Crossing the Chasm,” Geoffery Moore laid out a strategy to growth for technology companies that has persisted since it was published in 1991: find a beachhead, become the dominant player in that narrowly defined market, and—only after having a complete product—grow from there.
According to Moore, companies most often fail when they need to “cross the chasm” between Early Adopters and the Early Majority. The former is willing to try something for a competitive advantage, while the latter is plays it safe and waits to see if others adopt the new product and stick with it.
The chasm is bigger—and the challenge harder—in consumer.
(There are, too, other areas to get tripped up, according to more, but the aforementioned is the biggest.)
So, it was interesting to see this week a new feature rolling out from OpenAI for ChatGPT: sharing a conversation.
Zoom out for a second, and frame through the lens of Moore’s book:
Innovators, the group that precedes Early Majority in adoption, make up 2.5% of the market. Early Adopters makes up 13.5%. Then there’s a huge gap that needs to get closed, because when you get to Early Majority, the market begins to open up; that segment is 35% of the market.
Estimates suggest there are 5 billion internet users in the world. OpenAI has 100 million Chat GPT users.
So, OpenAI is on the verge of moving from Innovators to Early Majority. And it, apparently, is feeling that pain: The Washington Post reported that traffic to ChatGPT’s website fell nearly 10% in June and that app downloads are also declining.
So, the conversation sharing is interesting for two reasons.
First, it positions ChatGPT in a way that doesn’t require it to replace or compete against search. (Who shares search results?)
Second, it creates a growth loop by bringing non-Innovators into the fold, relying on early users to create content that shows off a near limitless array of use cases.
The combination of the two are a competitive advantage in consumer: OpenAI gets to define its category positioning, but its users get to define use cases.
The network effects from that will likely keep growth loops tight, and users engaging.
It’s identical, really, to Dr. James Richardson’s approach in “Ramping Your Brand.” Stay local until velocities hit a certain point, then start to expand. Don’t buy distribution to grow too early.
OpenAI, it seems, is paying extremely close attention to where it’s at in terms of market penetration and extremely close attention to how its users are sharing the value they find in ChatGPT.
It’s a good lesson, and one worth studying.
back on our Saturday Bangers i see
also: gonna need you to hush on "Ramping Your Brand" thx (maybe go point Groovewagon's competitors at some Linked-In course thinkfluencer bros content-chum)