MSA’s long march to commercialization was cratered with them

After you manage to cross the chasm separating technology enthusiasts and visionaries from the mainstream market, what do you find? When Management Science Associates launched their Gabriel ERP product, they discovered a series of additional chasms, each big enough to swallow the enterprise. But despite a string of extremely challenging issues, a series of partnerships with key industry players helped the company to eventually dominate its chosen niche.

By Peter Longini, Managing Editor

It may not be apparent from looking at TV Guide, where the variety of specialized cable channels seems endless, but the national cable network business actually consists of a relatively small number of players. That’s because most national cable network companies – MTV, Turner, A&E, and so on – provide an assortment of specialized networks under a single corporate umbrella, not just one. As a result, while viewers may have hundreds of channels to choose from, they are typically packaged for distribution by just 20 companies in the business. At a May 19 Pittsburgh Product Strategy Network forum, Management Science Associates vice presidents Michael McGuire and Bob Vishneski of MSA’s Media business unit, explained the special significance of introducing a new technology product into a market with so few customers. 

Automating cable network operations

Approximately eleven years ago MSA identified what was then a poorly served niche in the burgeoning cable industry: enterprise automation software for scheduling advertisements and promotional announcements, managing finite inventory, developing the traffic log, pricing commercial inventory, along with the associated accounting, reporting, analytical and management functions. It’s wasn’t as though no one had tried to satisfy those needs for this rapidly growing and specialized media niche, it’s just that no had succeeded. The general purpose enterprise software vendors promised to build the “next generation” of systems, but missed an opportunity by not delivering on their visions. MSA, with a prior history of working with consumer product companies and their advertising agencies on data warehousing and related analytics, had already established an industry beachhead. 

“When you deal with a national cable network, you pretty much buy a promissory note: for X amount of money, you’re going to air a certain number of spots and you’re going to get a certain audience,” Vishneski explained. “The reason you’re advertising at all is because you anticipate gaining access to a particular audience. Cable companies provide advertisers with access to an audience, but it’s not clear upfront what their returns will be. You just hope you get what the cable company promised.” 

For MSA, the opening became taking the promise of audience delivery – the cable network’s projected ratings – and measuring that promise against the program’s actual Nielson ratings once the spots had run. For the advertiser as well as the cable network, the attraction was that the audience promised would equal the audience delivered. 

But even though MSA had the contacts, the experience, and the credibility to meet the industry’s growing need, at least at the outset, it didn’t actually have a product. “We had someone who did an excellent job of selling the vision of what they needed, why they needed it, and why we were the right company,” Michael McGuire explained. “But we didn’t spend any money trying to build the product until we knew we had these first three or four beta partners. Because of the size of the market we were going after, making the large investment to build something when you didn’t know if you had anything coming back in, was way too risky. So we went out and sold a vision. Then we built the product. We didn’t start spending until we had specific customers signed.” 

The Chasm analogy

In his highly regarded best-seller Crossing the Chasm, author Geoffrey Moore explained how the greatest risk in developing a high-tech market lay in making the transition from an early market characterized by a handful of visionary customers into a mainstream market dominated by a large number of pragmatic ones. That transition, which requires corresponding changes in the company’s product, operations, and outlook, is difficult to achieve, and many otherwise promising technology startups, instead of crossing over, have stumbled into the chasm, never to be seen again. It is a development model that has taken on an almost religious following in the technology community. And much of Moore’s analysis applied to the MSA experience. But it didn’t always fit.

“The first thing we noticed in terms of market segmentation is that Crossing the Chasm defines a lot of characteristics for the market,” Vishneski noted. “But the characteristics they match with the early adopters, the early majority, and so forth, didn’t quite match the customers we had. The fact that ours was a much smaller market dictated that the characteristics you read about in the books aren’t going to apply quite as succinctly to that size market.” 

“No matter how much we read academically about how to break down a market and the right way to identify the early customers with only 15 or 20 big players out there at the time, we didn’t have that luxury,” McGuire pointed out. “We had to step back and say: Who’s going to work with us? Who’s going to put the money out there to partner with us? We were tied to who was going to spend the money to work with us to get us where we needed to be.”

“We needed people willing to endure the beta process,” Vishneski explained. “In some ways, it was actually an alpha and development process. We needed people, time, energy, and resources, to help us gain the domain expertise over and above what we already had to make the product what it needed to be. At least we’d get it to market and then they’d provide the kind of feedback that would allow us to make it better and capture the rest of the market. Of our four original beta partners, three stayed the course.” 

You gotta believe

Along the route to commercializing the product it calls ‘Gabriel,’ the company faced a series of critical decisions, some of which fit the Chasm model better than others. One of them was pricing strategy. In Moore’s experience, price sensitivity worked differently for early enthusiasts, who spent more freely, than it did for the more conservative mainstream market. But for MSA, that wasn’t necessarily the case. “I’ve been working in this industry for 15 years and directly involved in the pricing and negotiating the product for the last 5 or 6. I’ve yet to meet a customer in this industry that freely parts with their money,” McGuire observed. 

Other key decisions concerned which platforms to support, which market segments to serve, which features to develop, and what secondary opportunities to exploit. Often the guidance – whether from Moore or any other outside source – was minimal. “Those are very tough decisions,” McGuire pointed out. “I don’t think there’s any formula for making the right decision at that point. You have to decide: are you moving forward or not? And once you do, you’ve got to commit to it. You can’t go halfway. In the case of pricing, the key is to come up with a model you believe in and stick to it. If you’ve rolled over during the negotiations, you’re going to cause yourself a lot of problems in the long run. You also have to believe in the value of the services you’re bringing. You need to be convinced of that before you go out and try convincing somebody else of it.” 

“We had some very good people we partnered with,” Vishneski acknowledged. “We needed people who felt comfortable in an unstructured environment. In the Chasm, Moore says that a lot of decisions you make are high-risk, low-data. Make sure you find people that are comfortable dealing with a lack of structure and making it up as you go. 

“The other key is to be sure you’re actually making a decision because often times, no decision is worse than a bad decision. You can’t freeze; you’ve got to move forward. You can’t spend forever deciding what to do next.”

ABOUT THE AUTHOR:
Peter Longini is a Managing Editor for the Pittsburgh Product Strategy Network. Peter is a former professor of communication research at the University of Pittsburgh and professor of TV-Radio at Brooklyn College, CUNY. During the 1980s, he was an executive speechwriter at PPG Industries in Pittsburgh. Since 1992, he has been the principal of Peter Longini Communications, an editorial services company in Wexford, PA whose clients include various publications, public sector agencies, nonprofit organizations and corporations. In January 2003, Dr. Longini became an adjunct faculty member of New York University and Director of Communications for Cranberry Township, Pennsylvania. He can be reached at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it