Crossing the Chasm 2.0

Bad news, the chasm is getting bigger. Good news, the “early adopter” market is more “targetable” than ever. Bad news again, the early adopter market is really not that big.

Here is the typical web 2.0 launch strategy... write a blog, trackback to bunch of A-list bloggers. Get readership, build some credit. Quietly work on your startup on the side. And finally when almost ready, create a landing page to collect emails. Announce on your blog prominently your new project. Build some buzz with a series of posts that reveals more and more. Finally launch... get 50K users... then... nothing!... (... rinse repeat... )

Unfortunately this marketing strategy is going the ways of super bowl commercials. The main problem with dot-com super bowl commercials wasnt that it was a waste of money... for the first guy that did it, it was worth many many times over the price. The real problem was that there were eventually way too many dot-com super bowl commercials targeting the same old audience flooding the market with noise, driving ad prices up, increase the cost of entry, and finally driving customer acquisition cost to the stratosphere... consumers/users only have so much “attention” limited by their time and thier brain size. Flooding the market with the same old message and through the same old channel creates significant decreasing marginal returns. There is really nothing wrong with Super Bowl commercials when you are the only one doing it (case in point, GoDaddy), the problem is marketing requires contrarian thinking just like investing.

The formulaic web 2.0 launch strategy is going the ways of 2000 super bowl commercials... way too much noise, not enough attention.

The good news is that this particular early adopter market is easily reachable, actionable, and identifiable. Adding the fact that it is east to build a product... getting to launch and some user base is easier than ever. The problem is that this particular base of users usually have ADD... they’ll visit any website mentioned on Techcrunch and perhaps register . .. but they’ll forget about you just as quick. Furthermore, the insularity of the blogosphere has created a sub culture that is decidedly different from main street users driving your product marketing requirements down the wrong path for crossing the chasm. (huge huge huge problem!)

How big is this early adopter market? Let’s do some quick calculation... Techcrunch is a must read for the blogosphere... 35K RSS subscribers... aggressively assuming the same # of email subscribers and same # of good ole typed in traffic... we get to around 100K people that actually CARE about all the random startups... Another proxy... Delicious has about 300K users. . and it is by far the largest web 2.0 company... So at best the tech blogosphere is probably around 250K users...

I would venture to guess that the chasm for web 2.0 plays is bewteen 100K to 500K users. If I was VC’s I would not even touch a company until I see a clear trajectory to 500K users and beyond. There are way too many web 2.0 companies stuck at 20-50K users hoping to cross the chasm when their userbase hit a wall.

I know I’ll get flamed for this... but I’m going to suggest startups to follow the dot-com marketing strategy (but not the hubris, lack of focus, or the disrespect for the end user). Build a product for the mass market. Raise a SIZABLE amount of money so you can afford a nice offline ad campaign (maybe even US weekly!). There doesnt seem to be many web 2.0 companies marketing in those channels. Perhaps if you have the right product and messaging it will even be heard... at least it beats kissing up to Arrington and going to parties where the male/females ratio is in the double digits... just kidding.