How to choose a Business Model

I know it’s hectic out there! Lots of options to choose from, lots of possibilities, but how can you select the correct Business Model for your startup or company?

There is not simple answer, but here are some tips that you can use to figure it out. A small spoiler:  as the Marketing guy I will start as usual with – know your costumer.

Thanks to EFactor for the opportunity!



Do marketing to jump the chasm

It’s the end of the month, your thriving financial reports are on your desk. You’ve had a history of great months of revenue, of increased sales, great success overall. You run through your numbers, with the same diligence as the past months, but come up with a decreased cash-flow, less units that are being sold. You might try to find the answers in your accounting books, on the Profit & Loss statements, or even try to understand the reasoning of your sales force. The reality is that you are facing the chasm.

The term chasm was coined by Geoffrey A. Moore in 1990. Despite being more than 20 years old, some of the concepts from the theory are still latent in the modern business theory. A critique to the book has been its focus on high-tech industries, such as pharmaceuticals, computers, mobile phones, etc. Nevertheless the theory can be easily applied to any market, since its objective is to achieve a sustained growth of the company.


The main idea behind “Crossing the Chasm” is to target your market and focus your efforts on niches. To achieve a better segmentation, Moore based its theory on ​Rogers’ Innovation Adoption Lifecycle. Rogers’ curve presents five different segments:

  • Innovators – constantly in search of new technologies.
  • Early adopters – search for new technologies hoping to solve their problems.
  • Early majority – waiting for technology to solve a problem or issue they have.
  • Late majority – they are not searching for a new technology, if it’s a proven solution, they’ll use it.
  • Laggards – they have to adopt the technology or the innovation because they are finding difficulties not using it.

Image credits to ​Idiology


To cross the chasm and take your startup to its growth stage, you can take into consideration these suggestions:

Marketing is essential

We usually leave the marketing department out of the loop of the business development. Moore’s focus on crossing the chasm is based on the ability of this department to reach out to customers and translate your product or services into a value proposition suited for your target market. For Moore, marketing is the group of people working directly with the customer, fitting the product and positioning the image of the brand in a relevant and useful context.

The marketing department ultimate goal is to position the product into the early majority segment – jumping over the chasm. For Moore: “Positioning is the pinnacle of marketing–but it’s also tricky. People hold an image of a product in their minds–and don’t like anyone else to manipulate that. So instead of trying to define it, find ways to make the product easier to buy.”

Understand where your customer buys

You need to create a relationship with your client to get over the chasm. Those Early Adopters and Innovators were willing to come to you and test your product. Now it’s your turn to go and look for them.

Direct sales is the preferred strategy for Moore, but this was pre-social media. I’m not saying that you should just disregard the one-on-one meetings. But if you are on a tight budget, you can reach some of those prospects with the correct automation tools. Once more, don’t just ignore going out there and meeting your clients, in this stage, your product needs to engage customers.

Don’t be afraid to adapt

Moore doesn’t urge you to change your product. To cross the chasm you need to adapt your message. A good tailored message, that

He provides a template to achieve this in two sentences:

For the (target customer),
who is dissatisfied with (current alternative in the market),

Our product is a (new product category)

that provides a (capability to solve target customer’s important problem).

Unlike (the product alternative),

we have assembled (key features that demonstrate you have the whole product, not just a piece of a puzzle).

You are not back to square one

The question that might arise from entering a new segment is: who do I know inside that target niche? You might already have contacts within your previous costumers, talk to them, don’t be afraid to pick up the phone and ask them for a recommendation.

If you are uncertain that they can help, pinpoint the prospect that might have a larger benefit out of your product, that one customer that you can really help. Even if you have no strong contacts, it’s a good thing; you can start nurturing your network!