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Episode #18 How to Survive (and Thrive in) the Economic Storm With Geoffrey Moore

No one believed Geoffrey Moore would become much of anything in the business world – including those closest to him. 

“The fact that I went into business and became successful in business was like the biggest shock in the world to everyone in my family – me most [of all], because that was just not going to be the program,” Geoffrey said. 

But looking back now, that’s hard to believe. 

Today, Geoffrey is one of the best-known management consultants in the world, having worked with hundreds of companies, including a number of Fortune 500 companies. He’s also a venture partner at Wildcat Venture Partners, among several other current endeavors, and he’s perhaps best known for writing the highly influential “Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers” in 1991 – a book that made him a business hero to many, including UpdateAI’s Josh Schachter.  

Not bad for a “liberal arts kid,” as Geoffrey described himself. (Granted, he did earn his bachelor’s degree in American literature from Stanford University and a doctorate in English literature from the University of Washington, so he was being a bit modest.) 

That unorthodox path towards the business world paid major dividends for Geoffrey, though. 

He said his liberal arts background taught him an invaluable lesson: To always “ask the next most interesting question and base [your response] on the last answer – don’t just have a list of questions, react in the moment.” That ability – to look ahead, stay nimble and be endlessly curious – has served Geoffrey, and the businesses he consults, well for decades. 

Josh, on the latest episode of “[Un]churned,” leaned into that approach himself. Considering the recession and signs of more economic pain to come, Josh wanted to get Geoffrey’s input on not only the most interesting, but also most pressing, question on his mind: how can young companies make it through the economic downturn?

We’ll get to Geoffrey’s answer in a moment. Other topics covered by Josh and Geoffrey include: 

  • Geoffrey’s journey into the business and consulting world
  • Why identifying “blindspots” is critical
  • The 5 key elements of “Crossing the Chasm” 
  • The next evolution of “putting the customer first” 

It was an honor to have Geoffrey share his expertise on the podcast. Here’s what he had to say about the economic downturn:


How Young Companies Can Survive a Recession 

You don’t need to be an economist – or a meteorologist, for that matter – to look out and see the macro financial landscape is stormy, to say the least. The stock market is down, interest rates are up, and earnings have taken a hit, seemingly across the board. 

It’s tough enough for even the biggest companies right now. (Meta, Facebook’s parent, and Amazon are both laying off thousands of employees, for example.) So how can startups make sure they make it through the economic storm unscathed? 

That’s exactly what Josh asked Geoffrey, about halfway through their “[Un]churned” conversation. Josh asked with UpdateAI in mind, but Geoffrey’s input applies to any young company. 

The first thing Geoffrey wanted to make clear: “it can’t be about you!” 

What he meant by that is, companies can tend to be myopic – especially when things are going bad. They want to highlight all the great features they offer and point to what they do best. But that’s not enough, Geoffrey said, when you’re trying to keep and expand your client base. 

Instead, you have to reframe the conversation. It’s not just about what your company offers – it’s about how what you offer can specifically help your clients stay afloat. 

That’s at the heart of “putting the customer first,” Geoffrey explained. 

Be Proactive

For customer success-focused businesses, that means it’s about helping clients not lose customers during a downturn. This takes foresight on both ends of the relationship – each company needs to be willing to look ahead and see the brewing storm. Be proactive. Address potential issues like customer retention before they become a real problem. 

“What are you doing to take the leaks in your boat and patch them *now*, because you’re going to head into stormy weather,” as Geoffrey said. 

Always Ask Questions

Further, startup executives would be well served if they followed a (tweaked) version of what Geoffrey learned in college – always ask questions and always be present. This allows you to look for potential “blindspots” – or areas of concern you may be overlooking, intentionally or not. And being present is important because it lets you tackle the most pressing issues at hand right now, before they balloon into larger problems. 

Embrace the Challenge 

Lastly, companies and executives should embrace the challenge a market downturn presents. 

Sure, this is difficult to do when you’re in the moment and everything looks like it’s headed south. But many successful companies have weathered economic storms and come out stronger because of it. 

“The downturn can be very, very good for a company,” Geoffrey said. “It’s painful, but it’s like going to the gym – it’s painful, but it can be good for you.” 

That’s a great perspective. View the downturn as an opportunity to improve your business – much like you use the gym to improve your body – rather than an existential threat to your company. 

Because worrying about market conditions isn’t going to help your company. But being proactive, asking pertinent questions, and having the right mindset can help you weather the storm – and emerge in a better place than when the storm began.

“The downturn enforces discipline, it enforces focus on outcomes that can be prioritized.” - Geoffrey Moore

Listening to Unchurned will lower your churn and increase your conversions.

Intro: [00:00:00] [Un]churned is presented by UpdateAI.

Geoffrey Moore: The first rule in a downturn is don’t take your customer’s budget for granted. Whereas in an upturn, in good times, you do, In good times, you qualify a customer. If they don’t have budget, you don’t call on. But in a downturn, even if they do have budget, they may not have permission to spend it and, and so then the question is, well, what do you do instead? In a downturn, you have to either create budget. Or more likely, what you have to do is redirect budget.

Intro: Welcome to [Un]churned, a show about the leaders and innovators of companies who have forged incredible customer relationships and stories you can use to advance your own career. Here’s your host, Josh Schachter.

Josh Schachter: Hi everybody, and welcome to [Un]churned.

Josh Schachter: I’m Josh Schachter, founder and CEO of UpdateAI. Joining me today is Geoffrey Moore. Geoffrey Moore. He’s a venture partner at Wildcat Venture Partners and more Dal Ventures. He’s the principal of his own [00:01:00] consulting business. He’s advisor to many leading tech companies in Silicon Valley. He’s the bestselling author of several book titles, including my all-time favorite business title, Crossing the Chasm, Also inside the Tornado.

Josh Schachter: Most recently, the Infinite Staircase, a book about ethics and mortality. Uh, welcome, welcome, Jeff. I’m, I’m so honored to have you on the program.

Geoffrey Moore: Well, I’m, I’m delighted to be here, Josh. It’s, it’s good to be here and I have great feelings about Idea Idealab and Bill and Marsha. So great to be part of the family.

Josh Schachter: So for, for listeners out there, uh, Bill Gross is our co-founder. He’s the, the chairman of Idealab, uh, Marcia, the president of Idealab. And, uh, they helped us with the connection to Geoffrey. So I, I, I actually, I felt a lot of pressure in that intro when I was, uh, writing it up last night, Jeffrey. It was pretty, pretty vanilla, pretty mundane.

Josh Schachter: I can’t say like Geoffrey Moore, the, the, the, the CEO of Salesforce or, you know, the, the, the Malcolm Gladwell with, you know, of this book. But, but, but like, if you accrue. All that you’ve done it is at that level. So it, I felt [00:02:00] like really that was just an indu injustice of vomiting out like little, not little, but like these things that all add up. How would you present your bio to our guests? And please don’t be humble.

Geoffrey Moore: Well, it, so rather than the bio, the bio is, is that I, is that I’ve been involved in, in high tech consulting role for 35 or 40 years. I think the thing that I’m really good at, and that kind of creates the cumulative impact that I’ve been able to have.

Geoffrey Moore: Is, I’m good at framing situations in terms of what are the forces at work and those things, and how are they operating? And then creating a vocabulary that people can, you know, can, can, can understand those ideas pretty crisply. And most importantly, they’re very actionable. In other words, there’s a, there’s a des in every book I’ve written, there’s a description.

Geoffrey Moore: Followed by a prescription. And, and I think that that, that willingness to be prescriptive is, is what people appreciate. There’s so much layered inside what you just said. Uh, it’s all about simplifying the message. It’s all about being a layman, so to speak. Um, understanding the, the high tech, [00:03:00] but bringing that down so that everybody understands it at the same level, playing field, and then actionability.

Josh Schachter: And one of the things that. The CEO of an AI company, like one of our mantras that we hold onto our principles is to be actionable. It’s not just AI for the sake of ai. So I, I love that you have that, um, that same principle in, in your work and in your writing.

Geoffrey Moore: Well, if you wanna, I mean, basically if you. If you’re an advisor, you wanna have impact.

Geoffrey Moore: And so if you’re not having impact, it’s kinda like, what’s the point? Uh, so, so that’s why the, that’s why the actionability is so critical.

Josh Schachter: Yeah. You should share that with all the advisors out there.

Geoffrey Moore: That’s not always, Maybe the point is No, I just wanna give you a lot of advice and collect a little, uh, a fee.

Geoffrey Moore: And then I, I’m off to Maui. Where are you going? I work in consulting for five years, so I know how it goes. All right. Ok. Ok. Yeah. Yeah. Ok. We won’t go there. Go there.

Josh Schachter: I, I wanna get unchurned, uh, you know, in, in homage to the title of our podcast here for, for SaaS leaders. Uh, we want to go raw, authentic with you and, and some pseudo rapid fire questions. Where were you born and where do you live [00:04:00] now?

Geoffrey Moore: Well, I, I was born in Portland, Oregon, and I currently live in Las South Los Hills behind Stanford, uh, in, in the Bay Area.

Josh Schachter: Not, not a bad place to influence tech leaders. You, you’ve taught so many. Uh, about business and now about ethics and mortality recently. Uh, who, who is somebody in your career, whether you’ve known them or not, that you’ve really looked up to and learned a lot from?

Geoffrey Moore: You know, for me there’s been a handful of, of CEO leaders that. See, I’ve never, I’ve never run a large company. So, so I’m, in one sense, I’m just always sort of humbled and amazed by them.

Geoffrey Moore: Um, but, you know, there, there are people that, that you go, wow, that that person is, is doing something that I hope I can help other people do. So Mark Benioff at Salesforce is one, chilo at Microsoft is one. They were the two behind the book zone to win. Uh, Jeff Miller early on in my career at Documentum was one.

Geoffrey Moore: They’re people that you just go, Wow. They are, they’re charismatic leaders. They’re authentic. They, they, they take on challenging problems, but they do it in a [00:05:00] way that’s approachable. They have empathy, but they also have accountability. It, it’s very inspiring. And so they’ve been, the people I think I’ve tried to sort of live up to, you know,

Josh Schachter: you mentioned that, that you’ve never, you’ve never led a, a large company in your career and if I look at your background, which makes sense, as an author of many bestselling books, you, you’ve got a bachelor’s in American literature, uh, from Stanford. You have a PhD in English literature from University of Washington. You taught English, uh, at a university for four years. You’ve never been the CEO of a large company or, or an executive at a large company. Um, are you a charlatan?

Geoffrey Moore: Good question. That that’s fair because basically what I, No, I’m gonna call myself an entrepreneur. Which sometimes people confuse with the word charlatan . But the idea is, um, Marie and I wanted to move back to the Bay Area in 1978. I’d been teaching at a small college in Michigan, and, and I, we had to start over.

Geoffrey Moore: There were gonna be no jobs in academics. It was not gonna happen. So I joined a software company as a, and I said, Look, I don’t know anything about tech, but I, I know little about [00:06:00] training. And they said, Well, we’ll, we’ll help you out. And so from then on you it ba basically. So I learned tech and originally as like an extended metaphor.

Geoffrey Moore: Its like, I don’t know what these things are, but I’m sort of metaphorically figuring it out. And then at some point the language became, Well wait a minute. It’s not really a metaphor that’s really actually how it actually works. So I was kind of just always this person trying to process the models, process the frameworks, what, what was going on.

Geoffrey Moore: And so, and I was, started in sales, but ended up in marketing and then I ended up with this company, Regis McKenna, which was the transformative thing for me. Regis had had, it was a framework guy also. He was many other things, but, but I kind of became the tool Smith. I was sort of the, I was just like the framework guy.

Geoffrey Moore: Like, like Scotty, I wasn’t, I wasn’t Captain Kirk, I wasn’t Spock, I was Scotty. I was digging in the frame and having fun with that. But in the that process, I started by taking over a software practice. Because I came out of the software industry, but very quickly, uh, everybody else figured it out, and even I figured it out.

Geoffrey Moore: My span of control is one. I could have nobody reporting to [00:07:00] me. I, I, it just, it doesn’t work. I’m not good at it. I love people. We have a good time, but I, I’m terrible manager.

Josh Schachter: Is that still today?

Geoffrey Moore: Absolutely. I’m a, it’s called catalytic consulting. You don’t consume the catalyst, just put the catalyst in the ingredient.

Geoffrey Moore: Let the, and let the reaction go. And so, and, and the catalyst. It goes back to being a seminar. Basically. I’m a seminar, I’m just an English major trying to find work. So basically every one of my consulting sessions is a seminar where the key case skill in this seminar is ask the next, the next most interesting question and base it on the last answer.

Geoffrey Moore: Don’t just have a list of questions. React in real time. Be in the moment. And, and that was what I was good at. And so people would say, Well, you know, we want you to sit down on this client meeting and well, why don’t you sit down on this? Well, why don’t you give a talk? Well, why don’t you write a book? Well, blah, blah, blah.

Geoffrey Moore: And even the groups, the consulting practices we had, the Chasm Group and TCG Advisors and Chasm Institute, they’re all based on saying, install the vocabulary and then help people use the [00:08:00] vocabulary. And that’s the game.

Josh Schachter: You’re just a guy trying to earn a living. Living in Los Altos,

Geoffrey Moore: on that one. Yeah. Yeah. Well, okay. It’s, it’s, it’s, it’s a tough one. Ok. And by the way, I have, I have to confess, I have to confess, if you are an advisor and there’s a pandemic and people have nothing better to do than to get onto Zoom, your business goes up.

Josh Schachter: I’ve learned that actually from other folks that.

Geoffrey Moore: You wanna be an advisor, find an find a, find a large pandemic, and you’ll, you’ll be, you’ll be good.

Josh Schachter: No, I, I, I, I saw that actually with several advisors. Uh, I actually do want to react to what you said in the moment, like you just mentioned a second ago. I, I’d love to dig in a little bit into your, what is it catalytic leadership of, of, of why you, you, you only like to go from zero to one with your, your leadership.

Josh Schachter: Cause I did notice. On your LinkedIn in, in preparing for this conversation, expect you, you know, um, the managing director of this, managing director of that? No, no, no. You’re a venture partner. [00:09:00] You’re a side arm guy. So what, like, what, what’s that about? Like, how far the childhood does that go into?

Geoffrey Moore: Well, I was younger brother. I mean, my older brother kind of dictated terms, so I, he was gonna be the ceo. The fact that I became, went into business and became successful in business was like the biggest shock in the world to everyone in my family, me most, Uh, because that was just not, that was just not gonna be the. But my power is in a is I mean if you think about liberal arts education, why do you go into liberal arts education is cuz you want to empower your students.

Geoffrey Moore: You want them to become more powerful. And so, and therefore you figure out, well, what are the, what’s holding the student back? Why, why aren’t they more powerful? And then you, you interrogate and you learn. You see patterns. You say, Oh, I see why they’re not more powerful. Well, maybe we can work on. Same thing in consulting.

Geoffrey Moore: Same, same game. Exactly. My clients are smarter than, they’re just have IQs that are way off the chart, but they’ve got blind spots. And, and part about being a consultant, particularly now that I’ve advised, I don’t know hundreds of companies, um, in situations. You get pattern recognition, you say, Oh, I [00:10:00] know what’s going on, and everybody’s got a blind spot somewhere.

Geoffrey Moore: So that’s, that’s kind of how, and the idea is if you, as long as you’re not, as long as you’re willing not to be the store, the, the key to the catalytic consulting is it’s never about you. If, if as soon as you make it about you, you’re in trouble. So that’s, that’s as long as it’s about the problem and about the situation.

Geoffrey Moore: And then you’re, you’re sort of like finding that little way to jiggle the handle and, you know, get things moving along.

Josh Schachter: You’re a humanities guy. I mean, listening to you talk right now, you’re a philosopher. You’re, you’re an anthropologist, you’re, you’re, you’re some, you’re a psychologist, right? Like you, you’re a study of people.

Geoffrey Moore: Yeah, yeah. Just don’t say math and I’ll be fine.

Josh Schachter: Yeah, yeah. But, but how cool is that, Right? Like, how cool is that? Cause, cause you know, somebody else who I respect an in venture and, and I’m sure he’s probably a chum of yours, John, Doer right? And, and, and talk about like, you know, measure what matters and, and analytics and, and, and you go into these conferences.

Josh Schachter: Uh, you know, mrr, arr, you know, C ratio, LTV ratio, you know, like it’s all metrics. But here’s somebody [00:11:00] who is, is is right now saying, stay away. And yet you’ve been so powerful in business and, and been such a. Inspiration to many. So I think it’s really cool. Well, great. Well, I’m glad. Thanks. All right. Enough flattery.

Josh Schachter: Um, by the way, I actually, I, I’ve said it, um, my, to others, you know, kind of that I know in the past, I, I majored in industrial engineering, uh, so, so, so, heavy quant, heavy quant. Um, and I always kind of felt split brain between quant and, and creative. Um, but I want that direction in, in, in, undergrad. Um, because I thought it would be most just, um, effective, right?

Josh Schachter: And, and, uh, relevant to what I wanted to do in business. Looking back, I, I’ve thought to myself sometimes, you know, if I had to do it over again, I might major in English because I found that just the, the power. Of, of good writing and articulation and, and grammar and diction is just so important and I think it’s starting to get lost a little bit. Um, and, and so I, I think it’s really amazing that you’ve come from that background and, and that’s empowered you.

Geoffrey Moore: I [00:12:00] think the, the longer you are in the. Career, the more it pays off. I think the place, it’s the hardest to be an English liberal arts major is for getting your first job. Cause it, Cause you look at your resume and it’s like, well yeah, but where do you penetrate?

Geoffrey Moore: And so the STEM thing is like, the good thing about a STEM major is you’ve got you, you’re gonna land your first job with a good, with a good STEM resume virtually for certain. And then the question is, later on, maybe that’s when you start thinking, As I broaden the aperture, I’m not as well prepared.

Josh Schachter: And, and you don’t know this, um, but you’ve taught me a little bit about, about, uh, the English language because I, I, I read your book first in, in 2008. I was 24 years old. I’m 38 now, and I became such a fan of that book, and I would tell people at like, happy hours, start up happy hours, and that like, oh, You’ve gotta read this book, Crossing the Chasm, like it’s such a great, powerful book, Crossing the Chasm. And at one point somebody kind of just like looked at me quizzically and they’re like, Do you like, what did you mean chasm?

Josh Schachter: No chasm. Heres C H A S M. Like, no, it’s chasm. So I actually, I went [00:13:00] in, I looked up the word. And then you know the pronunciation of it. And because of your book, I now know how to pronounce the word chasm. So just letting you know that. Fun fact.

Geoffrey Moore: Well, I just want you to know that John Chambers, who was a big, the CEO of Cisco, John Chambers, used to, I mean, to the, to this day, I’m sure he says crossing the chasm, but you know, I mean, when people come after you come and speak Chasm, Chasm works for me.

Josh Schachter: Go ahead, . You buy the bucket. Doesn’t matter. And I’ll take, I’ll take John Chambers as as good company. Okay, so we’re in an economic downturn. We’re, we’re, we’re approaching it. We’re we’re somewhere in, in those lines. Uh, you were obviously around very active in the business world in 2008. The last time we were in a, a similar type of place like this with our economy.

Josh Schachter: Uh, you authored a book, Excuse me, You authored an article, a paper in the Harvard Business Review called in a downturn, Provoke your Customer. First question is, right now we’re in Q4 2022. What are you seeing that’s similar and that’s different to [00:14:00] 2008?

Geoffrey Moore: Well, I, I do think, I mean, we’re, we’re, we’re gonna have it down to, there’s just too much stuff going on in the world and, and it’s mass by the fact that we had this huge, uh, overspend, perhaps appropriate, but we had this huge relief.

Geoffrey Moore: Project and we’re still having some of that money in the system. So for example, this quarter GDP was, was was up, but, but I think most people feel like it we’re in for darker sledding. It’s very different from 2008. It’s also different from 2001. So there are two downturns that in this century that I, that I’ve been through.

Geoffrey Moore: In 2001, it was really a tech downturn. It was a tech bubble pop. So the rest of the economy was like, okay. And arguably 2008 was a financial systems downturn. And again, the fact that it affected the rest of the economy, but it was because the financial system was being affected, not because the economy was at risk.

Geoffrey Moore: So I think what’s very different about that today is. Today, the global, the whole concept of a globalized economy is at risk because of the geopolitical issues both in the Ukraine and [00:15:00] with China and whatnot. We’re gonna be reconfiguring the supply chain. It’s gonna get less efficient before it becomes more efficient.

Geoffrey Moore: And eventually, I think with technology, everything will become more efficient. We’re gonna go through, through it, through a downturn and, and, and there’s, and of course the pandemic didn’t help, and then there’s a bunch of, of forces. The important thing then for somebody going in a startup or in any business is when you, The way you play business with tailwinds, it’s like sailing.

Geoffrey Moore: When you have a tailwind, you put up a spinnaker. When you have headwinds, you take down the spinnaker and you learn how to, how to tack a boat. And so basically the most important thing that leaders listening to this podcast need to do is underst. It’s time to take out the playbooks and, and, and revisit your, your playbook.

Geoffrey Moore: And basically the first rule in a downturn is don’t take your customer’s budget for granted. Whereas in an up term, in good times, you do, in good times, you qualify a customer on, If they don’t have budget, you don’t call on ’em. But in a downturn, even if they do have budget, they may not have permission to spend it.

Geoffrey Moore: And, and so then the question is, [00:16:00] well, what do you do instead? And this gets to the provoke your customer point in the article, which. In a downturn, you have to either create budget or more likely what you have to do is redirect budget. And the way you redirect budget is you say, Look, there is a place that you are not investing, that you should be investing.

Geoffrey Moore: And you make a very compelling case for saying, Now is the time for you to move the budget from A to B. And and, and by the way, once it’s a B, I can compete for it because. The reason I’m telling you this story is I wanna sell you what, what, what I do. But I can’t sell it to you if, if you, if you don’t have budget for it and don’t have priority to spend that budget.

Geoffrey Moore: And so the provoke sales call was all about you. You need to reframe your understanding of, of your business. You need to re reframe the understanding of the risks you’re exposed to and the opportunity. It’s mostly, by the way, about risk, not opportunity in a downturn, people are much more worried about plugging the leaks in the boat than they are about sailing to ta.

Geoffrey Moore: So, so basically it’s like, okay, how do I fix the, the, So it’s gotta be very immediate and very [00:17:00] pressing, and it’s usually a problem or a risk. And so, and, and, and, and because they’ve had good times, they’ve kind of taken their, kinda shoved it down. They’re like tech debt, you know, tech well, a little more tech’s be okay.

Geoffrey Moore: It’s gonna be, and all of it’s, no, it’s not gonna be okay. And so that’s the sort of thing you do in a downturn. You focus on the things that are challenging your customer, where their, their business is at risk, and you align your company directly with how to plug that leak in their business model. Okay.

Josh Schachter: That, that is very actionable advice. How, how do you divert? So, so, so it sounds like this is objection handling, right? What you’re saying here is No, I don’t have budget. Okay, great. Let’s get you some budget. So how do you do that? How do you divert I I my product right now? Our beachhead to use your, the terms of, of your framework, uh, is customer success and customer success is, um, invaluable, indispensable to SaaS corporations, to many beyond SaaS, but to SAS corporation.

Josh Schachter: And, and, and now boardrooms are starting to [00:18:00] recognize that the importance. Net revenue retention, uh, and those sorts of metrics. However, when you look at the studies, and I saw a survey recently that showed that while leaders are most interested in nrr, the software that they are investing in is most closely aligned with demand generation.

Josh Schachter: And yes, it completely at odds with what they’re saying and what they’re doing right. Um, and so like, I don’t know, Jeff, now is the time where, where it should, we should all be investing in our existing customers and expanding them and not losing them. Right. But is there some psychology that keeps, that just keeps drawing people to sales and to the new shiny toy?

Josh Schachter: And, and, and how do, how do I objection. Handle that and help, help have that conversation as a platform that is right now approaching decision makers and customer success. Yeah. So let’s be clear.

Geoffrey Moore: With tailwinds, it’s not, it’s smart to be worried about the top of the funnel. I mean, basically processing the processing the, the top of the [00:19:00] funnel will lead to stuff at the bottom of the funnel.

Geoffrey Moore: We we’re not worried about budget being redirected or whatever. We’re just gonna try to make, make it work. In, in a downturn, a couple things will happen. First of. How do you lose money in a downturn? Well, one is you spend the money at the top of the funnel. By the way, people are interested. They care, They, you work them through the sales cycle, but when you get to the bottom, a whole bunch just defect.

Geoffrey Moore: Either because they couldn’t get the budget or it wasn’t gonna get prioritized. So think about the, not only the absolute cost, but the opportunity cost of processing all those deals to, to, to no outcome. So that, you know, that’s number one. Number two, This notion of, I mean, you go look at customer success and you say, Okay, customer success is really key to, to retention.

Geoffrey Moore: Obviously it’s an important thing. But the customer success manager doesn’t control their budget. It’s not their budget. It, it’s, it iss the chief revenue officer or whoever. You wanna put that highest level who says, I’m gonna, and I’m gonna take my budget, I’m gonna put some in marketing, I’m gonna put some in sales, and I’m gonna put some in customer success in a, in a, in a, in a tailwind.

Geoffrey Moore: She [00:20:00] say, I’m gonna put more in marketing and more in sales and, I’ll do, you know, customer says, God bless, but even if I have a bunch of churn, I’m growing so damn fast at the front end, I can live with certain amount of leaking in the boat. In a downturn, just, just turn the priority. Absolutely around your chances of getting a new logo and a downturn.

Geoffrey Moore: I dramatically worse, not just sorta war, they are god awful war because in a downturn the last thing we wanna do is onboard new vendor. So on the other. , your install base becomes your practical point of, of, of, of growth. And, and first of all, by the way, let’s just not have shrinkage, right? So, so how do I maintain, how do I maintain my base?

Geoffrey Moore: But the good news is the money they have, they’re gonna spend it with their existing invent. And the bigger the vendor you are, the more likely it is that you’re able to consolidate around you. So if you’re Gainsight competing against Salesforce in a, in a tailwind world, Gainsight has a lot of advantage.

Geoffrey Moore: It’s got one product to sell, it knows how to sell it really well. There’s people got budget. But in a downturn, Salesforce has the advantage. Cause they say, Well, yeah, yeah, game’s great, by the way. But, you know, [00:21:00] we add our little module here and, and really, frankly, you’ve got pretty much what you need. And by the way, I can give it to you for 7 cents and, you know, blah, blah, blah.

Josh Schachter: This is, this is great. Okay. So, so, so now I want the, the, the free advice since you’re on the podcast with me here. What if you’re UpdateAI? What if you are a two year old startup? That is, is just hitting their pace and, and has high growth, you know, objectives. But you’re, you’re a small, you’re, you’re a, you’re a minnow, right?

Geoffrey Moore: Right. No, but first, So first of all, championing your, uh, your, your, Hey, I wanna talk to you about update Who, I mean, it’s like Chasm Group. What the, what’s the chasm group? Okay. So, So, okay. The first thing is it can’t be about you. It’s just like, okay, your mom, but nobody. So, so then the issue is, okay, so what can it be?

Geoffrey Moore: But, but, but, so, so what can you do? So, okay, and you said, Look, I wanna, I wanna, I wanna take my technology, which as you and I have discussed, has very broad applications across many disciplines, most obviously, uh, sales at, at scale. But you’re small and you’re starting, so you’re saying, Okay, I [00:22:00] wanna have a beachhead.

Geoffrey Moore: And we’ve talked about customer success as a beachhead. So you say, Okay, but, but why? But why would someone in a downturn spend money in customer success that you could, you could compete for? And the, if the answer is, well, your customers will be happier, happiness is not exactly the currency of a downturn.

Geoffrey Moore: So what, what? Well, you in a downturn, if you lose customers, first of all, we said customers is your best opportunity, but if you lose customers, the impact, because you can’t replace them, the impact on your business model is devastating. And so most people say, Well, we’ve got, we’ve, we’ve been tracking our NRR, we’ve been tracking our attrition and our retention rate.

Geoffrey Moore: We have statistics. It’s blah, blah. Part of the provocation, I think at this point would be, Yeah, but that’s not, You cannot expect that to continue in the future. You’re gonna be under enormous pressure. What are you doing to improve your, Take the leaks in your boat and patch them now because you’re gonna head into a stormy weather.

Geoffrey Moore: And if you have leaks in the boat. And so I would make it all about leaks in the boat, and then [00:23:00] I would, And then your software is, has very interesting capabilities to patch a whole bunch of leaks in the customer success boat.

Josh Schachter: So UpdateAI. We, we’ve built the world’s best, uh, detection of action items on, on, on Zoom meetings.

Josh Schachter: Um, but who cares? That’s about me. Right. Like, that’s like cut me off there. Exactly. And you, and you have,

Geoffrey Moore: Yes. I should put a, a big plaque on the wall. Best ever.

Josh Schachter: Yeah. Who, who gives, who gives a shit, Right. Like, you, you cool, You’ve got cool data science. Is it actionable? Yeah. Okay, great. So it’s actionable. So we detect those action items on your, in your calls with customers.

Josh Schachter: Okay. Who cares, right? , I think. Is this your, you’re going now one level deeper. So, okay, great. That’s the actionability. That’s the what? Okay. Well, if, uh, right now you have to do whatever it takes to keep your existing customers is, is the lessons we’ve just learned from, from you, Geoffrey?

Geoffrey Moore: The why? In other words, you said you did the what?

Geoffrey Moore: By the way. Remember Simon Sinek, you start with why, right? So why would I do this? And the answer is, I would do this to protect [00:24:00] the health of my net recurring revenue business. And, and basically, and it’s the idea, it’s, it’s almost like getting vaccinated. You haven’t gotten covid yet for Christ sake. Get vaccinated, don’t get covid without the vaccination.

Geoffrey Moore: Protect your health. So, so protect those relationships. Have the conversations with customers be able to meet with them to build the relationship because we know that relationships matter when they’re looking at at, at, at budget sheets. And the only way that you’re gonna be able to increase your coverage ratio, so to speak, and have more of those conversations effectively is our tool, not the only way.

Geoffrey Moore: That is what our tool is helping you do, to make sure that you can have conversation, Particularly because customer success managers aren’t the most senior people in your company. Yeah. So you can’t expect them to be like the most gifted. So, but the, the, what you hire them for normally is they have empathy, they have conversation, they have curiosity, they care, you know, they, they, they lean in.

Geoffrey Moore: And then if you have this tool behind, it says, And by the way, I will make sure that you are actionable and I will give you a prior, this is like next best action. And you know, it’s what AI is so good at right [00:25:00] here. Here are all the stuff you, you gotta do. They’ll be diligent, they’ll be conscientious, but, but they need help.

Geoffrey Moore: And then without that help, they’ll have good will, but they’ll have mediocre practice and mediocre practices. What is creates the leak in the boat?

Josh Schachter: Good. I’m taking my notes.

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Ad: Hey guys, it’s Josh. If you’re like me, you buy the doggy poop bags on [00:26:00] amazon.com that have the most ratings and. So please give our podcast a rating or review. It’ll help others discover us. Go ahead right now. I’ll be here when you get back.

Josh Schachter: Let’s go to, you know, you wrote this book in 1990. So, you know, what is that?

Josh Schachter: 31 years ago? Geez, . Um, you were born, well, you were born in 19. I was 84. I was 80. Okay, so you were you at the time. You could’ve read it, you would’ve been seven. Yeah. I wasn’t that, you know that Yeah, you weren’t that they weren’t that precocious. Okay. Right. Okay. Uh, and my birthday, by the way, in 1984 is the first words.

Josh Schachter: In the book, 1984, April. Oh, is it? Yeah. Wow. So listen, I’ve bought five copies of, of your book, of your book Crossing the Chasm. One for myself, I think actually maybe two for myself. I think I bought one a few years later to reread. Uh, and then for, for, for people that worked for me in product management when I was, uh, in that function.

Josh Schachter: It’s just been so, it’s been gospel, It’s been biblical for me to be totally honest with you. [00:27:00] And I, I have, it’s at my parents’ house right now, but I’ve got a marked up version that I go back to anytime I’m starting a new business. And so I really want tap into that a little bit with you. Can you describe, not everybody’s familiar with the, with the, the life cycle, the, the framework.

Josh Schachter: Can you describe that?

Geoffrey Moore: The idea behind this, and this was, this was something that, that Regis had really pointed me toward and I guess kind of worked on more. Was this notion that when you introduce disruptive innovation into any marketplace or community, people will self-segregate into different strategies for coping with disruption.

Geoffrey Moore: And there are five personas in the model. And, and, and, and they, they kind of go from most attracted to disruptive innovation to least. So the technology enthusiasts are the people that are attracted to it for its own sake. Like how, how does your AI work? You know, are you using convolutional, deep neural networking?

Geoffrey Moore: I mean, they’ll, they’ll go, you know, geeky, geek, and then, and that’s important because everybody else in the marketplace is looking to those people saying, Are these guys for real or not? And what these people can tell you is, look, I don’t know whether the [00:28:00] business is for real, but the technology is for real.

Geoffrey Moore: So that’s an important, it’s important to connect. But the people that invest, initially, we call the visionaries and they’re the people that go, I, I see by, by the way, I get what you’re doing. I believe what you believe. I think you’re right that this is exactly the problem to work on. And I wanna be first.

Geoffrey Moore: Most people do not wanna be first, but I wanna be first, and I’m willing to put lean in and put the extra effort in. And. The extra money in because I’m gonna use this technology to de leapfrog the world. I’m gonna be Jeff Bezos. I’m gonna, I’m gonna take out retail with the internet. I’m just gonna do it.

Geoffrey Moore: So those are the, And those people, we, the technology enthusiasts and the visionaries, we created something we called the early market

Josh Schachter: is Jeff Bezos the greatest example of this in the past 20 years that, that he started with books, but that was never the goal.

Geoffrey Moore: Yeah. I would say that, that what what jobs did at Apple was started with a computer and ended up with music and phones was another one.

Geoffrey Moore: I would say that even something, even something. You know, the first Netflix was just DVDs in the mail. It was a business model thing, but when he went to streaming, it was like, Whoa, [00:29:00] because that was cannibalistic of his. So these are people who, who make these bold ac and of course our friend Mr. Musk, you know, electric car.

Geoffrey Moore: Space X, pretty much same thing. Right? You know, I mean, so these people are amazing people that, that do these, these jumping ahead kind of things. And we write about them and we talk about them. The one thing that’s important is that for most of us, we shouldn’t emulate. I mean, I mean, you either are one or you aren’t, but most of us are not.

Geoffrey Moore: And certainly most of my clients are not. And so then the question is, what, what about the other groups? And the next group we call the pragmatist. And most of my clients, frankly, and most people, most money in the world is managed by pragmatist. Now, pragmatists, go, Look, I’m not an expert in this stuff. It sounds great, by the way.

Geoffrey Moore: I’m, I’m, I’m totally, You had me from Hello, but I don’t know if it’s gonna really work or not. And there’s a lot of. Issues have to get solved. So I’m gonna wait until I see other people like me doing it, but as soon as I do, I’m highly probable to do it also. So that created the thing called the Chasm, because initially it was that sort of junior high [00:30:00] dance problem about I’m not gonna go out on the dance floor, and you go first, that kinda stuff.

Geoffrey Moore: So then, so then the other half of that though, which is important to recognize, is when the pragmatists do start to go, they all go at once. So that creates something we call the tornado. So the chasm and the tornado were just the inverse of each other. The chasm was a block voting not going in yet, and the tornado was block voting all in.

Geoffrey Moore: Right? And so then the question became, and that’s why these tech firms get all these incredible valuations, and you think, where is that coming from? They’re losing money. Why are they so valuable? Well, because they’re a tornado. Everybody in this mother’s gonna buy this stuff. They’re grabbing market share.

Geoffrey Moore: Once they have market share, they’ll be able to monetize it and blah, blah, blah. And we, we have all these stories, but the chasm story was, Yeah, but how do you get, how do you go from chasm to tornado? And that’s where we got to this notion of the beach head market, which is, I need to get that first group of pragmatists over the hump.

Geoffrey Moore: And so who are they? Well, and we ended up saying there are two, there are two requirements. They have to have an urgent use [00:31:00] case that’s putting them under pressure and that they can’t solve with their current solutions. And. So that means, that means they’re predisposed to get near the chasm. And second of all, they have to be in the same industry, in the same profession so that they talk to each other.

Geoffrey Moore: Because remember, pragmatists talk to each other in order to decide are we gonna do this or not. So they, So you wanna go to a single vertical market with a single use case, and you take that the strategy was. Just go nail that use case. Do whatever it takes to make that use case for that vertical market, a complete and total success.

Geoffrey Moore: When you do that, it’s a little bit like winning the New Hampshire primary. You don’t win a lot of delegates, but you just became a credible candidate for the presidential nomination. And so it was a hugely important, And by the way, the other thing it does, and this is important for, for, you know, for UpdateAI as.

Geoffrey Moore: This is the fastest way to get to a 10 million business. By the way, it’s a B2B play. You and I had a conversation off offline about B2B versus b2c. Crossing the chasm is a B2B playbook. It is not a [00:32:00] B2C playbook, so it’s important to remember that. But in a B2B world, it’s the fastest way to get to 10 million and $20 million.

Geoffrey Moore: And at 20 million, if you’re sensible about the way you’re managing your money, you got a business that you, you can fund yourself. You could, you don’t have to like go begging to the next round of venture capital. You’re now, you wanna raise growth rounds and that’s what, where growth venture capital comes in.

Geoffrey Moore: You’re no longer, you’re no longer at risk of going out of existence. Which is the other thing, the valuation of somebody that’s crossed the chasm. So the Wildcat Technology Ventures is raising a fund called the Crossing the Chasm Fund. It’s only gonna invest in the crossing the chasm stage because the evaluation you get there is such a big step up for such a modest amount of risk.

Geoffrey Moore: It’s not the huge exit yet, but it’s, it’s huge valuation step.

Josh Schachter: You’re saying right after you’ve crossed the chasm, that’s that’s when you’re gonna invest.

Geoffrey Moore: Yeah. No, before, but we’re gonna be the company that takes them across the chasm. So in other words, in order to get there, you have to have product in market, you have to have customers, but you still have not cracked the code as to that.

Geoffrey Moore: [00:33:00] But do you haven’t won that beach head mark?

Josh Schachter: Do you have product market fit at that point.

Josh Schachter: Well, you

Geoffrey Moore: have no, you do not have product market fit. You have product and really cross. If you think about crossing the chasm, it’s the first instance of guaranteeing product market fit. And the way you guarantee product market fit is you pick a problem which you, which you find the hole.

Geoffrey Moore: Then you, you figure out how do I, how do I fit my thing into the hole? But the the market is saying, Please put something here. I need something right here. So the market is predisposed to find fit if you’re willing to fit yourself into that problem. Niche.

Josh Schachter: So it sounds like if you’re gonna, if so, so by crossing by, by starting out with this beach head, with this, with this just, it’s a smaller addressable market, but it’s a very niche thing.

Josh Schachter: It, um, by definition you have to find a very salient and acute pain. I would imagine. If it’s ause, then it’s not gonna work. Absolutely. That’s right. It’s gotta be acute. And the other good thing about this thing is, Acute pain in small niche market guarantees that no established enterprise will ever try to get your customer from.

Josh Schachter: They hate this [00:34:00] kind of customer. It’s too small for them. If they won the entire market, it wouldn’t mean anything to them and it’s gonna take a ton of work. So for all kinds of reasons, this is an open opportunity for you to essentially build a market constituency with almost no competition, provided you’re willing to make the extraordinary sacrifices necessary to serve their weird case in.

Josh Schachter: Niche market. I read your book. Like I said now in 2008, I was, uh, the founder of my first startup called Interactive Sports Network, So I’m a contemporary of Mark Zuckerberg.

Geoffrey Moore: Does he have more money than you?

Josh Schachter: Debatable .

Geoffrey Moore: Yeah, Yeah. Particularly with that, that meta thing. I don’t know. Ok. Ok. Ok, ok.

Josh Schachter: Well, I mean, listen, we’re doing, we’re doing an mpv, right?

Josh Schachter: This is the future of Update, right? So, um, but, but, but, so, yes, I, I was a first hundred thousand user on, on, on Facebook back in college. Um, but in any case, So there’s this thing called social networking that was [00:35:00] burgeoning and it was mushrooming. And I said, Well, I wanna do this for sports. And I had certain reasons behind that.

Josh Schachter: And so I started Interactive Sports Network as the, as the umbrella company, but my sub-company was called hockey barn.com. So it was a, an affinity driven community for ice hockey fans and players and so on and so forth. It didn’t work out for a lot of reasons, but I got a lot of lessons out of it. But, but I bring this to you because we, we did talk offline.

Josh Schachter: And I told you that reading your book was inspiration to me in choosing hockey as my first go-to-market. Beach head didn’t ultimately work out. One of the things that didn’t work out is that I didn’t really feel like I was gonna get the economies from, from, from hockey when I started it. Um, and I’ll be totally honest with you, I have a little bit of that concern right now with customer success.

Geoffrey Moore: All right. But let’s talk about the difference. So hockey, hockey fans are not under urgent pressure to solve a a hockey fan problem. Okay. I mean, they’re not the whole thing of b2c. It’s a completely different value proposition. It’s much more around [00:36:00] fads. It’s much more around the contagion and viral networking.

Geoffrey Moore: It, it, it, it, by the way, it, it, I find it totally amazing and I’m not particularly confident at it, so I just sort of stand back and go, Whoa, that’s really cool. But, but, but, but it, but it’s not crossing the chasm and crossing the chasm is not the right playbook to use if you’re starting a social media company.

Geoffrey Moore: Unless no, what would be interesting. I don’t know if you noticed, but, But our friends in social media are having trouble with the advertising model because they have overplayed that card to the point of exhaustion and people are sick of it. And so now there’s a really interesting B2B to C play where the B2B plays.

Geoffrey Moore: I’m gonna help, I’m gonna call up Mark and say, Hey, Mark. Listen, dude, this advertising thing, you need a little help of it. Here’s, you got a leak in the bucket, . But the point is, but that would be a B2B play. That would not be a B2C play.

Josh Schachter: Yeah. How about plg? What about a product led growth play?

Geoffrey Moore: So product led growth is better suited to volume ups because the problem with, it’s an interesting play [00:37:00] complex, has the more the B2B people are interested in product led growth, but it’s not so critical.

Geoffrey Moore: But in any high volume business, you can’t have a customer success manager call The product has to be the customer success manager. And so product led growth is absolutely critical. If you’re going to, for the, for consumer market or even small, small business market, it has to be product led growth.

Josh Schachter: A few months ago you gave a, uh, presentation at Gainsight’s Pulse Conference and you showcase.

Josh Schachter: The, um, customer success maturity model. And you’ve talked about how, you know, we’ve gone from traditional value delivery where it’s all about the product, the product, the product, delivering the value, which I loved as a product manager. By the way, . Cause that puts you on the pedestal, , um, competitors of the reference point.

Josh Schachter: How does our product compare to their, Um, and, and then it, we kind of have, have, have now turned into what you call the modern delivery value delivery stage, where it’s, well, there are [00:38:00] services as well that we’re delivering value in addition to the product and customer retention is important and there is this thing called churn.

Josh Schachter: And now we’re in this inflection point, I guess, where it’s really about customer outcomes and delivering customer value. That’s my takeaway of your maturity model, but can you describe that model in your own words?

Geoffrey Moore: The most important thing is in the 20th century, so I started in the eighties, so I’ve got that 20 years in each side of the, of the.

Geoffrey Moore: So in the, in the eighties and nineties, it really was about high tech products were the, were the key ingredient to this change. And so it was a very product centric world. The engineer was king and the product manager. And then you marketed and you sold it. And by the way, when the customer bought it from then on, was the customer’s problem.

Geoffrey Moore: If your product did what? You said it. If the spec said it did and the customer wasn’t getting value, that’s too bad. That’s their problem. Not my problem. Cause the business model was a license and maintenance. model And even when it wasn’t working very well, they didn’t wanna throw it out so then they would maintain it.

Geoffrey Moore: So, so [00:39:00] basically the customer had low power and the vendor had high power. Okay. Flip the bit. And by the way, the tech bubble bursting was the catalyst for converting from, from that model to the, to this century’s model, which is the customer having more and more power. First of all, they have more informational power.

Geoffrey Moore: Second of all, they’re also able to consume more and more products as a service. So Mark says, you know, software as a service, and then we have cloud computing, and you have cloud as a service, and all of a sudden the customer has, it becomes the scarce ingredient.

Josh Schachter: Was it the tech, Was it the, was it the, was it the bubble bursting or was it the, the, was it cloud computing as a result of that, that, that cost?

Geoffrey Moore: Well, remember what we were trying to do in the 20th century was make products better, faster, cheaper, and more ubiquitous. So our, and there was a lot of things con contributing to that. The, the, the whole bringing China. Global economy, bringing India into the global economy with an enormous amount of outsourcing to, to, to take costs out of the system, et cetera, et cetera.

Geoffrey Moore: So, so the, and, and to create a higher volume of product at lower cost. At some point you create enough volume of product and [00:40:00] services that that’s not the scarce ingredient. Now the scarce ingredient is the customer. And that’s how the customer got more powerful. So now all of a sudden, customer success goes from a nice to have to a must have.

Geoffrey Moore: Because once you hook a customer, then the last thing you want is have ’em fall off the line. Right? I mean, you want, you wanna get them into the boat. And then you want actually, you actually want, you wanna have a fish farm. I mean, you like to have a vibrant living relationship, whatever. It’s a little bit cynical to call it fish farm art.

Geoffrey Moore: Ok. But the point is that that, um, All of a sudden now the whatever organization is closest to the customer has the best opportunity to detect signal as to the health of the customer. So this notion of a customer health score is at the core of customer success management. And, and because they’re the closest to it.

Geoffrey Moore: And by the way, we also put telemetry in our product and we wanna infer customer health from telemetry signals, et cetera, et cetera, et cetera. But, but, but now, if the customer’s, the most powerful thing we wanna make, retain the customer. And we also wanna upsell and cross sell, and that’s where product led growth comes in.

Geoffrey Moore: All that stuff [00:41:00] requires us to take our attention away from competitors and products and put them on customer experience and, and, and, and, and, uh, value and, and outcomes. And the reason why outcomes become important, you know, in initially with the consumer product, the outcome as well. You know, I, I saw another dog video on Instagram, but in a business you have to, the user wants to be more.

Geoffrey Moore: But the buyer, the, the budgeter wants to get outcome, value realization that says, Look, you’ve, you’ve made my business a better business and that’s why I’m giving you more money. Uh, and that, that is not obvious. If you, if you made a, like for example, when Microsoft made products in the, in the 20th century, they had no feedback.

Geoffrey Moore: They would ship windows, they would ship office, whatever it was. They didn’t know. They didn’t know what features you were using. So they just kept on putting more and more and more and more stuff into these products to the point where they became frankly unmanageable because they had no way of knowing, but they didn’t care.

Geoffrey Moore: Cause you got a got upgrade, the windows got upgrade, the next tissue of office. [00:42:00] Well now it’s the other way around. And so now we do have to care and, and so, and, and, and, and again, when we have tailwinds, it’s one thing because in tailwinds people forgive a bunch of stuff or. You can just live with a churn and grow your way past the churn, but in a downturn, you cannot do that.

Josh Schachter: So we’re entering a downturn. Um, you’ve shared the evolution of, of the customer being first. What’s the next part of that evolution? Where do we go from here?

Geoffrey Moore: Well, so I, I think that first of all, the downturn can be very, very good for a company. It’s painful, but, but it’s like anything else. It’s like going to the gym.

Geoffrey Moore: It’s painful. But, but it can be good for you because for example, let’s take, you know, Google and Facebook or friends that meta whatever, they over hired and overspent at a staggering amount because frankly, they could, they just had more money than God. Okay? So, so now all of a sudden it’s like, no, you have to get real.

Geoffrey Moore: And, and by the way, the metaverse. The thing I, I’ve got a tweet going on this today, says, It’s great to see the future, but when you’re there, remember to look at the calendar to figure out what year is it, [00:43:00] Because the metaverse is way too early in my view, for for, for the play that they made. But it wasn’t that it’s not gonna happen, It’s just wrong year.

Josh Schachter: So, so well wait, wait. Hold on, hold on. That, that, but doesn’t that violate the, the, the crossing the chasm? Aren’t they going after the ? The, uh, the early adopters?

Geoffrey Moore: Well, by the way, it’s fine to go after the early adopters, but that doesn’t scale, right. We know that we have to get the pragmatists, and right now, Even whether you’re a consumer or, or, or, or a business.

Geoffrey Moore: The Metaverse is still, I think, you know, it’s, it, I’m not sure it’s, it’s in a mirage, but it’s definitely on the horizon. It’s, it’s not, the oasis is not right in front of you. It’s not, It’s not exactly right. Ready consumed despite the fact that these, these objects are obviously very, very sophisticated and very, very cool.

Geoffrey Moore: The, the, the idea of the downturn is it enforces discipline, it enforces focus and enforces a focus on outcomes that can be prioritized. So, so nice to have, works with tailwinds, Nice to have, does not [00:44:00] work at a downturn. So it even should have is, is at risk, Must have works in any economy, must have, is a, is a smaller core and it’s harder to serve.

Geoffrey Moore: Uh, but, but it, but it has higher, higher outcome value. And, and so that’s, that’s kind of the key in the downturn is to just, you contract your business and get it, You get more, more, you get better at the things that matter the most. Just back to John. Measure what matters. Focus on what matters the most.

Josh Schachter: This podcast is is followed by folks, individual contributors, and decision makers, leaders in the SaaS world, out of your portfolio, a collection of books that you’ve written. What’s one. That they should put next on their list?

Geoffrey Moore: Well, for the, for the, for, for the Entrepreneur, it is crossing the chasm, I think.

Geoffrey Moore: But for the anybody in a large corporation, the last business book’s called Zone to Win and Zone to Win is simply how do you manage a crossing the chasm? How do you catch the next wave when you’re in a company that’s, you know, built a huge franchise on the current or prior [00:45:00] waves? And that becomes a problem because when you’re a startup, you, you get your money from venture funding.

Geoffrey Moore: Venture. Venture capital is designed to invest in disruptive innovations, and so they may not invest in you, but, but they’re gonna invest in something disruptive. But in a large corporation, most of your investment, in fact, often all of it has to come out of operating income. And you’re part of a, typically a publicly held company where shareholders are looking at quarterly results as a shareholders don’t care as much about quarterly results, as we say they do, but they use them as a signal of your health..

Geoffrey Moore: And so in the ab and, and they’re not used to understanding. They understand that disruption is expensive, but they’re not used to funding it themselves. And, and so it creates a huge amount of conflict inside a large corporation as to how to allocate budget, and most importantly, how do you stay the course at a time?

Geoffrey Moore: When your quarterly performance is going down and your shareholders are getting angry with you, but if you don’t stay the course, you’re gonna, you’re gonna miss the, you’re gonna miss the [00:46:00] way. And so the book is about how would you organize and then a company to manage those, those stresses and strains.

Geoffrey Moore: And it is as, I think it’s gonna be as popular with large companies as crossing the Chasm, as with startups.

Josh Schachter: Geoffrey Moore, thank you so much. It’s been a pleasure having you on the program. I’ve learned a lot as in this episode, as in all the readings of your work in the past, so really appreciate it.

Geoffrey Moore: Well, Josh, thank you for the kind words. It’s a pleasure to be here.

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