Champions and the Siren Effect: how early wins can mislead
Early stage tech companies would do anything for those first few big wins — especially from blue-chip companies. But we’ve seen more than a few companies who were steered off course by these early wins. The early ‘champions’ were dream customers. They bought into the vision. They loved the product. They ‘got it’. How can that be bad?
The only problem is that these champions turned out to be extremely rare people. Like any early adopter (thanks Geoffrey Moore), they’re generally innovators and visionaries; they’re confident; they trust their own gut feel and are willing to work with young companies and unproven products. If these early champions didn’t exist, neither would the tech industry. But they can fatally mislead early stage tech companies.
Moore’s Crossing the Chasm is all about making the transition from these early adopter clients to a more mainstream audience who need different things and are moved by different messages. But we’ve worked with a handful of cases where the first one or two wins were the only wins in sight. In each case, the company, convinced by early success that they’ve got everything right, found it extremely hard to re-focus on the more common buyers: risk-averse people who need a lot more hand-holding and an easier-to-buy product
Also in each case, the vision itself was the problem. Not that it was wrong (usually it was simply ahead of its time) but that most buyers don’t want exciting new visions. They want specific problems solved. The early champions validated the entire vision, so that’s what the company continued to sell. They then waited forever for the next big win, getting bogged down in two-year sales cycles with prospects who look just like the early wins, but are fundamentally different.
Often, the answer is to downplay the vision a bit and break the product up into bite-sized applications. It’s painful, but it can spell the difference between getting customers to fund growth instead of needing lots of early stage investment capital (and the dilution it brings).
Early on, getting twenty $10k wins may actually be better than bagging that $200k elephant. They don’t trample your product development roadmap to suit their specific needs; the sales cycles are shorter; and the sales model is more replicable and scalable — it’s a foundation you can build a business on. One client, Sarah Haskell at Portrait Software liked to call these ‘pointy apps’ to differentiate them from the big, platform sell.
The right balance is to have a vision that underpins the smaller applications and puts them in context. And a set of apps that validate the vision.
No one would say you should turn down the big early wins. Just beware of being lured into the rocks by expecting more buyers to be just like the early ones.