Crossing the Chasm - from Seed to Series A: Early adopters must share your belief

In Geoffrey Moore's classic work, Crossing the Chasm, he reveals that the journey through the product adoption lifecycle is neither smooth nor gradual. Between the Early Adopters and the Early Majority there exists a major discontinuity - "The Chasm".

The chasm exists because the needs and expectations of these two adjacent cohorts are fundamentally different. But what Moore didn't fully explore was the mechanism by which certain companies successfully attract early adopters whilst others struggle.

Simon Sinek's groundbreaking work on purpose-driven leadership provides the missing piece: most companies, even good ones, can only reach about 10% market penetration through traditional means. But companies that start with a clear WHY - their fundamental purpose and belief about how the world should be - can reach the crucial 15-18% tipping point by attracting early adopters who share that same belief. This is what enables them to cross the chasm and achieve mainstream adoption.

This insight builds directly on Everett Rogers' seminal research from his 1962 work "The Diffusion of Innovations." Rogers, who actually coined the term "tipping point," demonstrated through extensive empirical studies that adoption of any innovation follows a predictable S-curve, with the critical mass occurring when innovators (2.5%) and early adopters (13.5%) collectively reach 16% of the market. At this point, opinion leaders have validated the innovation, creating the momentum needed for mainstream adoption.

What Sinek adds to Rogers' framework is the crucial role of shared purpose in attracting those vital early believers. This new insight has motivated us to reprise our earlier blog “Crossing the Chasm - from Seed to Series A”, factoring in Sinek’s observations. The result is a new blog post, “Crossing the Chasm - from Seed to Series A: Early adopters must share your belief” from which we have drawn today’s newsletter.

Find Your Niche Through Your Why

In Moore's depiction, what the early adopters or "Visionaries" are searching for is very different to what the early majority or "Pragmatists" seek. The Visionaries see the new product as an agent of change, a disruptive force that can be used to enable immediate competitive advantage.

This is where Sinek's insight become so crucial. Early adopters and innovators embrace change and will believe in your mission before the majority does. The tipping point occurs when enough of these early adopters, innovators, and influencers unite to support a WHY.

They don't buy what you do - they buy why you do it.

By contrast, the "Pragmatists" are looking for something that is proven. They are willing to adopt new technologies, but they are more risk averse than the Visionaries.

In order to reach 15-18% market penetration and trigger the tipping point, you'll need promoters who fall in love with your product and will not stop talking about it to their friends and family. People don't talk about products they love simply because they think it's from a great company - they tell people about it to demonstrate their values, their beliefs, their WHY.

The Elusive Beachhead: Why Purpose Matters

As we said in our original blog, to cross the chasm, we must focus on a specific segment or niche of the mainstream market and dominate this first - to secure a "beachhead". But the hard reality for most startups is that, despite resolute effort, the beachhead remains elusive. There are 2 primary reasons:

• They find the right landing place but then either lack the strategy, the capability, or the resources to conquer the beachhead quickly without suffering heavy losses.
  
• They land in the wrong place. It is a beachhead of sorts, but it is a landing spot that only leads to a small, slowly growing market. This can still be a place worthy of building a business, but it will not have the scale potential that most founders (and investors) seek.
  

What's missing from this earlier analysis is the why behind the beachhead selection. Companies that successfully cross the chasm don't just find any beachhead - they find the beachhead that resonates most powerfully with their core purpose and attracts believers, not just buyers.

The WHY-Driven Path to Series A

Research by McKinsey has shown that only around 14% of all startups that successfully secure Seed funding eventually go on to exit or reach Series C. Recent data shows this challenge has intensified dramatically. Whilst 31.8% of Q1 2020 seed startups closed their Series A within two years, that fell to just 12% for Q1 2022.

What's changed isn't just the numbers - it's the depth of conviction investors require. In today's environment, having revenue traction isn't enough. Investors need to believe in your why and see evidence that your target market believes in it too. Companies with a clear purpose attract more passionate early adopters, creating stronger word-of-mouth growth and more defensible competitive positioning.

For the mainstream venture market, Seed investors not only need to be convinced that the startup is a hot Seed-stage proposition, but that it is on a clear path to also hitting Series A criteria. By Series A it should be operating firmly within the beachhead from which it will ultimately grow - and that beachhead should be filled with true believers in the company's mission.

Enhanced Investment Criteria: The Story Must Include the WHY

One of the biggest mistakes founders make in trying to predict investment criteria for the next round is to hang too much on commercial traction alone. Revenue attainment and momentum are of course key factors, but in any investor scorecard there are many others that can quickly derail a campaign, irrespective of revenues. For example:

Right beachhead: The most compelling funding stories don't just explain what market they're attacking and how they'll win - they must now articulate why this mission matters and why their target customers will become passionate advocates.

This transforms how founders should think about their beachhead strategy:

• Purpose-driven selection: Choose your beachhead not just based on market size and accessibility, but on where your WHY resonates most powerfully
  
• Belief-based positioning: Position your solution not just as better features, but as a manifestation of shared values with your target segment
  
• Community-centric execution: Build your go-to-market strategy around creating a community of believers who will evangelise your mission

When investors evaluate your beachhead story, they're not just assessing market opportunity - they're gauging whether you can inspire the passionate customer advocacy required to reach that crucial 15-18% tipping point.

Wrong beachhead: Recent comments from Asheem Chandna, Partner at Series A specialist Greylock Partners hammers this point home: "I recently met with an ambitious entrepreneur whose new company had a solid roster of customers. Their billings during the first few quarters were impressive. But I passed on the investment because, while I admired the individuals and liked their idea, I couldn't envision a path beyond £20 million in revenue."

This is often the result of selecting a beachhead based purely on ease of access rather than purpose alignment. When your WHY doesn't match your market, you end up with customers who buy your product but don't believe in your mission. They become transactional users rather than passionate advocates, limiting your ability to scale beyond that initial segment.

Bridge Rounds: Warning Signs of WHY Misalignment

A clear sign that more startups are floundering in the chasm is the rising incidence of bridge rounds. According to Carta data, bridge rounds have increased dramatically at the seed stage - from around 30% in 2020 to 46% in 2025, representing the highest bridge rate for any stage since Carta has been tracking such data.

Even more concerning is what Carta data reveals about the outcomes for companies that require bridge rounds. Research by Peter Walker, Head of Insights at Carta, found that bridged companies make it to Series A about half as often as non-bridged companies. This stark difference in graduation rates suggests that bridge rounds frequently indicate fundamental challenges rather than temporary funding gaps.

Bridge rounds often reveal a fundamental misalignment between a company's purpose and its market strategy. Companies with clear WHY-driven beachhead strategies create stronger customer loyalty and more predictable growth patterns, reducing the need for bridge financing.

Crossing the Chasm with Purpose

In mainstream venture markets, the journey through Seed to Series A requires ever more diligent preparation. Founders raising Seed rounds must have at least half an eye on the Series A objective. They must be efficient in finding the right beachhead even though this journey has much uncertainty. They must try and raise sufficient capital to ensure they can cross the chasm successfully, without multiple bridge rounds.

But most importantly, they must start with WHY. The most successful companies crossing today's chasm share a common trait: they don't just solve problems - they rally people around a shared belief about how the world should be different.

Building a convincing investment story at early stage is truly hard. Over the next few years, it's likely that far fewer will be rewarded compared to the market highs of 2021/22. But for those that can create a compelling proposition rooted in authentic purpose and demonstrated through passionate customer advocacy, there is no shortage of venture capital still looking for a home.

The companies that will thrive are those that understand Geoffrey Moore's chasm dynamics whilst leveraging Simon Sinek's insights on purpose-driven growth. They know that crossing the chasm isn't just about finding the right market - it's about inspiring the right believers.

If you're a founder preparing for Series A, ask yourself: Do you have a compelling WHY that attracts true believers, or are you simply hoping traction metrics will be enough? In today's selective funding environment, the difference between these two approaches often determines who successfully crosses the chasm - and who gets trapped in bridge round limbo.