The Biometrics Industry:

Leveraging the Technology Adoption Lifecycle

based on the work of Geoffrey A. Moore in his books Crossing the Chasm and Inside the Tornado

Biometrics 2001London, EnglandNovember 29 30, 2001

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Leveraging theTechnology Adoption Lifecycle

The TAL ModelCracks in the ModelThe Chasm The Bowling AlleyThe TornadoImplications for BiometricsOpportunitiesWinners

Technology Adoption

Technology Adoption Life Cycle

Innovators2 1/2%

Early Adopters

13 1/2%

Early Majority34%

Late Majority34%

Laggards16%

Early Markets

Mainstream Markets

Late Market

Techies: Try it!

Visionaries: Get ahead!

Pragmatists: Stick with the herd!

Conservatives: Hold on!

Skeptics: No way!

Groups are distinguished form each other based on their characteristic response to discontinuous innovations created by new technology

Chasm Group

Historical Adoption Rates*

0%10%20%30%40%50%60%70%

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

1 US Adults online - Harris Interactive, 11/01 2 % Penetration - Frost & Sullivan 9/99 3 penetration of US households - 15K+ income Synergistics 10/0

Wireless2PC3

Internet1

ATM3

*US data

Market Development Model

Techies Visionaries Pragmatists Conservatives Skeptics

Early Markets

Main Street

Total Assimilation

Transitions are Not Smooth

The ChasmBowling Alley

Tornado

Chasm Group

Early Market SuccessTo get an early market started requires:

1) a breakthrough technology product that enables a new and compelling application,

2) a technology enthusiast who can evaluate and appreciate the superiority of the product over current alternatives and

3) a well-healed visionary who can foresee an order-of-magnitude improvement from implementing the new applications

- Geoffrey Moore

Why The Chasm is Created?

Visionaries: break from packRevolution Think Project, Not ProductBuying Change AgentDriven by Competitive EdgeExpect Radical DiscontinuityHelps Pay for New ParadigmPrepared to Champion This Cause Against Entrenched ResistanceDemand Whatever It TakesCommitmentRely on Their Own Judgement

Pragmatists: stay with herdEvolutionEnhance Not Overthrow Buying Productivity Improvement for Existing OperationsWhole Product Solution Does Not Want to Debug ProductWorks Properly and Integrates Easily With Existing InfrastructureOn-going RelationshipBuy From Market LeaderMust Have References

Basis for Sale Radically Different

In The ChasmWait and See LullRevenue Growth Ceases - Often RecedesVisionaries Represented Initial Cash FlowsFunding Needs IncreaseRepeatable Business Model - No More SpecialsCredible Reference Accounts Needed!GOAL: GET OUT! Minimize Time in The Chasm

Aside: DefinitionsMarketing: Taking actions to create, grow, maintain or defend markets.

Two individuals/organizations buying the same product for the same reason that have no way to reference each other are not part of the same market.

Market: a set of actual or potential customersfor a given set of products or serviceswho have a common set of needs or wants, andwho reference each other when making buying decisions

Crossing the ChasmNiche Marketing - Segment and TargetMarket Driven As Opposed to Sales DrivenBig Fish - Small Pond Size of Beachhead = Annual $Solve Niche Market Problem

Unique to SegmentDifficult to SolveSignificant Economic Impact

Develop Whole ProductDefine Your Competition Market & Product AlternativesIts About Relationships (not Markets)GOAL: Secure Mainstream Beachhead - Normandy Beach

Enter The Bowling Alley

Displace Status Quo With New TechnologyCustomer Application Defines Market Not Your ProductMust Have Whole Product for Each Target Segment

Generic, Expected, Augmented, Potential

Restrained Competition Due to Whole Product BarriersHealthy Price MarginsValue Added DistributionGoal: Keep Moving Toward Tornado Build Momentum

Aside: Niche Market Penetration

Existing Application New Application

Existing Segment

New Segment

XOK

OK

Seg 2

App 2

Seg 3

App 1

Seg 1

App 3

Seg 2

App 1

Seg 1

App 2

Bowling Alley Strategy

Seg 1

App 1

BeachheadChasm Group

The TornadoPeriod of Hyper Growth Technology Solution Proven in Several NichesEnough Pins Knocked Down to Attract MainstreamPragmatic Buyers Flock En Masse to Adopt Technology StandardMarket Share Determined - Leadership EstablishedProduct Focus Shifts From Problems of the End User to Infrastructure Buyer That Implements Technology Set Technology Standard Reap Financial RewardsForget the Customer - "Just Ship ItGOAL: Establish Market Share Be the Gorilla!

Implications for BiometricsWhere Are We Today? Entering the ChasmDont Be Fooled by Post 911 Market Hype Based on Product Category - Not Just Your Product

Biometrics Market Is a Misnomer - Product Category Versus Market CategoryStay in Early Market until Core Technology Fully DevelopedAdopt Appropriate Marketing Strategy!

Early Market Finance Your Core Technology With SpecialsChasm - Choose a Beachhead Equal Your Annual RevenueBowling Alley Leverage Niche Market Whole ProductsTornado Forget The Customer and JUST SHIP IT to establish Dominance

Exploit The OpportunityGoal is not to develop best possible solution but rather to develop best solution possibleDevelop Vertical Market - Horizontal Application MatrixSize and Rank Opportunities & Pick on Someone Your Own SizeRefocus from selling products toward creating relationshipsPragmatists will rally behind you and conspire to keep your competitors outLEVERAGE Word of MouthAs niche markets penetrated, solution perceived to be less of a niche product, momentum builds towards the Tornado.

The WinnersDivide and Conquer - Segment, Target, DominateDefine the Whole ProductBuild an Organization that leverages RelationshipsShift from Technology/Product to Market/Solution Focus Its Counterintuitive BUT RESIST Fall back to Sales FocusCompensate Sales Force to Pursue Niche OpportunitiesPass the Elevator Test

For (target customers beachhead segment only)Who are dissatisfied with (the current market alternative)Our product is a (new product category)That provided (key problem-solving capability)Unlike (the product alternative)We have assembled (key whole product features for your specific application)

Be Ready to Rock & Roll when the Tornado hits

Buy These Books

Crossing The Chasm&

Inside The Tornado

by Geoffrey A. Moore

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