After 30 years, ‘Crossing the Chasm’ is due for a refresh

June 10, 2021 at 22:27

We had gone from zero to $60 million in revenue in four years, went public at a billion-dollar market cap, and then stalled.
We found ourselves stuck in what author Geoffrey Moore called “the chasm,” a difficult transition from visionary early adopters who are willing to put up with an incomplete product and mainstream customers who demand a more complete product.
This framework for marketing technology products has been one of the canonical foundational concepts to product-market fit for the three decades since it was first published in 1991.
Why is it that in recent years, wild-eyed optimistic VCs and entrepreneurs keep undershooting market size across the tech and innovation sector?
Despite our exuberant optimism, we keep getting the potential market size wrong.
Market sizes have proven to be much, much larger than any of us had ever dreamed.
A glaring example in our investment portfolio is database software company MongoDB.
The company is projected to hit a $1 billion revenue run rate next year and, with that expanded market, likely has continued room to grow for many years to come.
Another example is Veeva, a vertical software company initially focused on the pharmaceutical industry.
When we met the company for their Series A round, they showed us the classic hockey stick slide, claiming they would reach $50 million in revenue in five years.
Veeva was a pioneer in “vertical SaaS” — software platforms that serve niche industries — which in recent years has become a popular category.
Another vertical SaaS example is Squire, a company my partner Jesse Middleton angel invested in as part of a pre-seed round before he joined Flybridge.
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