March 2019, eight years after its official launch and many experiments, Industry 4.0 is on the brink, looking at the chasm. For the concept Industry 4.0 to become reality, it has to move from a random collection of scattered Proofs of Concept to full-scale projects. It must convince a critical mass of decision makers, users or customers, beyond the techno-enthusiasts and visionaries of the first hours.
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Thanks to Innovators and Early Adopters, who fueled the Industry 4.0 hype, the concept went viral and everything today is (ridiculously) 4.0. But 4.0 and smart solutions providers came to the brink of the famous ‘chasm’, revealed by Geoffrey Moore in his book Crossing the Chasm published in 1991.
According to Moore’s model, it is the Innovators or techno enthusiasts followed by the Visionaries who have started first with the experiments, or to use a nowadays popular expression: “Proof of Concept” (PoC). Innovators are passionate about technologies, Visionaries sensed new opportunities to outperform their competitors through 4.0 competitive advantage(s). These two groups make the Early Adopters, a fraction of the potential customers for 4.0 solutions.
For the solutions vendors and the overall Industry 4.0 concept to aggregate a critical mass in terms of sales, deployments, implementation, etc. the bulk of the market consisting of the so-called pragmatists, also called “early majority”, and the conservatives or “late majority” must be convinced.
However, a chasm separates the minority of the enthusiasts of the first hour from the mass of the other potential users. This chasm represents the break that distinguishes the expectations of the two groups.
As much as the actors of the first group are able to go for new tech driven by passion and curiosity, moved by their intuition or an act of faith, the second group expects tangible proofs of the value of what is advertised, verifiable references, elements which give confidence. In other words, switching from Proofs of Concepts to Proofs of Value, from PoC to PoV.
Bridging the chasm is essential for any offer or solution that seeks to move from the original niche market to the expected mass market. The chasm is a well-named obstacle, a fracture, a large gap in the expectations of prospects. According to Moore, many startups are falling into the abyss at this point, by missing the passage to the mass market.
Crossing the chasm
On the metaphorical side, Geoffrey Moore chose the term ‘chasm’ (pronounced Kaz’m) instead of crack, gap or hole to describe the huge separation between two very distinct groups of prospects, customers or markets. The term ‘chasm’ emphases the difficulty to cross this huge gap into the mass market.
The other analogy used by the author and that of the Allied landing in Normandy in June 1944 (we don’t use the word ‘invasion’ for this achievement, here in France). In short, crossing the chasm (the English Channel back then in 1944) is not the most important obstacle. What is important is to establish a bridgehead on the other side and maintain it.
To convince prospects with Industry 4.0 solutions, it is not getting a commercial appointment or making a demonstration that is the most difficult. It is to get beyond once this done. Just like the Allied forces during the landing in Normandy, beyond the chasm, the promoters of industry 4.0 are to meet the entrenched forces in defense; the skeptics, the conservatives, the competitors, etc.
Geoffrey Moore’s book is precisely about crossing the chasm, therefore an excellent source of inspiration for appropriate tactics to achieve the crossing.
Note for in-house experimenters
For in-house experimenters, who are trying to promote a technology solution bottom-up through a PoC, the advice is the same. Too often these technicians assume that their bosses share their passion for the technology and light-up at the sole statement of the potentialities and a “demonstration” of operation, another PoC. Not to mention the techies poor sales and marketing abilities.
The hierarchy is generally composite, with different backgrounds, mostly non-technical. The bosses are used to balance costs and benefits and to be accountable for the decisions they make. Therefore impervious to fluffy promises and much more sensitive to a robust demonstration of value and benefits, the Proof of Value (PoV).
The chasm is very likely to be found inside an organisation, dividing the early adopters and promoters from the skepticals and conservative decision makers. The chasm has to be crossed internally just as it is for vendors.
While waiting to cross the chasm
While waiting for the first bridgeheads to hold and expand, and for some iconic cases that will serve as large-scale demonstrators, the market for 4.0 or smart solution will remain essentially a niche market.
Late adopters on the far side of the chasm will keep on demanding benchmarks and Return On Investment (ROI) estimates that vendors will struggle to provide.
The irony of this situation is that those limited experiments (the PoCs) will only provide estimates based on more or less optimistic assumptions. Any guesstimate that is rationally sound enough will provide just as credible values and at the end of the day, most prospects will say that anyway “we are different“, “our situation is special” or another variation of this kind, rejecting the estimates.
This tends to give reason to my first boss in consulting who one day told me: “when you have no benchmark, invent one“.