Lenny's Podcast: Product | Growth | Career cover image

Geoffrey Moore on finding your beachhead, crossing the chasm, and dominating a market

Lenny's Podcast: Product | Growth | Career

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Understanding Market Segments and Playbooks in Sales

In the early market, there's no budget for anything, and sales teams need to create budget and redirect existing budget towards their solution. Small markets offer opportunities for entrepreneurs due to the flexibility in maneuvering sales cycles. As a category goes horizontal, budgets are established simultaneously, creating a tornado effect. This initiates a competitive market share battle, where the first vendor chosen by customers tends to retain them. Companies like Cisco and Microsoft achieved market dominance through competitive sales plays in the 90s. Subsequently, companies failing to achieve market leadership retreat into a niche and adopt defensive strategies. Playbooks for different market phases - early market, bowling alley, tornado, and Main Street - require distinct approaches to engage visionary customers, pragmatists with urgent problems, land-grab opportunities, and sustaining technologies, respectively. Using the wrong playbook for a market phase can have the opposite effect and lead to failure.

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