The growth tradeoff: How serving core customers too well can limit scale

The Paradox Every Successful Startup Faces

There's a cruel irony in startup growth: the customers who validate your vision can become the very reason others won't buy from you.

Watch any AI startup's customer evolution and you'll see the pattern. Cursor's early users were developers at OpenAI and cutting-edge startups, exactly the kind of customers any founder would celebrate. But when Cursor pitched to Fortune 500 companies, those same reference customers became a liability. Enterprise buyers saw risk where early adopters saw innovation.

This is what Geoffrey Moore identified 30 years ago as the chasm, a fundamental disconnect between early adopters and mainstream buyers that kills 900% of startups between $1M and $10M ARR. The pattern repeats across every successful AI company today. Jasper started with individual creators and small agencies who loved experimenting with AI. To reach enterprise marketing departments, they had to completely reinvent their positioning. Perplexity launched as a tool for AI researchers and tech enthusiasts. Their enterprise product barely mentions AI at all.

Here's what makes this particularly cruel: the better you serve your early customers, the harder it becomes to attract mainstream ones. Your visionary customers want cutting-edge features. Your mainstream prospects want proven solutions. They're not just different, they're opposites.

Understanding the Psychology Gap

The chasm isn't a growth problem. It's a psychology problem.

Early adopters and mainstream buyers aren't just different customer segments, they're different species with opposing worldviews about technology adoption.

Source: https://share.google/images/NZIBFIu7IVmvMeDLt

Early adopters see themselves as pioneers. They buy vision and potential. They want to be first, to shape the product, to have a competitive edge through early access to innovation. When Cursor launched in 2022 as an "AI-native IDE," developers at OpenAI and Perplexity were among the first to adopt it, not despite its rough edges, but because of the potential they saw.

Mainstream buyers see themselves as pragmatists. They buy proven solutions and predictable outcomes. They want to be third or fourth, with case studies from companies exactly like theirs. When Stripe or Coinbase adopt Cursor today, it's not because it's innovative, it's because it's proven to increase developer productivity by measurable percentages.

This divide explains why your growth suddenly stalls around $3M ARR. You've likely captured most of the visionaries in your market, and now you're hitting the wall of the early majority who actively mistrust visionary customers.

As one enterprise buyer told me: "When I see a startup's case studies are all YC companies and crypto startups, I know it's not ready for us."

The Messaging Evolution: From Revolution to Reliability

The most visible sign of successfully crossing the chasm is an evolution in how companies talk about themselves.

Perplexity's evolution

2022 Launch (Early Adopter Messaging):

• "The world's first conversational answer engine"
• "Revolutionary AI-powered search"
• "Redefining how we interact with information"

2024 Enterprise Launch (Mainstream Messaging):

• "Trusted by Databricks, Zoom, and Bridgewater"
• "SOC 2 compliant with enterprise-grade security"
• "Proven ROI through measurable productivity gains"

The shift is jarring but necessary. Perplexity stopped selling vision and started selling safety.

Anthropic's Strategic Pivot

Anthropic provides an even more dramatic example. Founded as an "AI safety research company" in 2021, their initial messaging attracted AI researchers and forward-thinking technologists interested in responsible AI development.

Early Messaging (2021-2023):

• "Building reliable, interpretable, and steerable AI systems"
• "Frontier research in AI alignment"
• "Constitutional AI for safer outputs"

Enterprise Messaging (2024-2025):

• "Trusted by 20% of the Fortune 500"
• "Enterprise-grade controls with SSO and SCIM"
• "Never trains on your data"
• "HIPAA and SOC2 compliant"

Notice what disappeared? The word "research." The focus on frontier technology. The emphasis on being different. Instead, they now lead with trust signals, compliance, and peer validation.

Jasper's Complete Reinvention

Jasper's evolution might be the most instructive. They started in 2021 as "Jarvis," an AI writing assistant for content creators and small businesses.

Phase 1 (2021): The Tool "AI that writes better marketing copy in seconds"

Phase 2 (2023): The Platform "End-to-end AI copilot for marketing teams"

Phase 3 (2024): The Enterprise Solution "Trusted by Prudential, Ulta Beauty, and nearly 20% of the Fortune 500" "Enterprise-grade control with SOC2 compliance" "Proven ROI with performance analytics"

Each phase represented a complete reimagining of not just messaging, but the entire market position. They stopped selling to individual creators and started selling to enterprise marketing departments. The product evolved too, but the messaging evolution led the transformation.

Building for Different Psychology: The Reference Problem

Your early adopters don't just shape your product, they become your references. And that's exactly the problem.

Pragmatists don't trust visionaries. They actively mistrust them. A pragmatist CMO at a bank doesn't care that a crypto startup loves your product. In fact, it's a negative signal.

Sierra AI understood this when entering the customer service market. Despite having cutting-edge conversational AI technology, they deliberately targeted established consumer brands like WeightWatchers, Sonos, and SiriusXM as early customers, not the typical Silicon Valley early adopters. Why? Because their ultimate buyers would be traditional enterprises who needed to see peers, not pioneers.

The reference network you need for mainstream buyers must be:

• Industry-specific: Healthcare companies want healthcare references
• Size-appropriate: Mid-market companies want mid-market references
• Geography-relevant: Regional companies often prefer regional references
• Use-case identical: Companies want to see their exact problem solved

This isn't just preference, it's about risk mitigation. Pragmatists are asking: "Has someone exactly like me succeeded with this?" If the answer is no, they won't buy.

The Copy Evolution: What Words Signal to Different Buyers

The language shift required to cross the chasm goes beyond taglines. Every word on your website signals who you're for.

Words That Attract Early Adopters (Delete These):

• Revolutionary, disruptive, game-changing
• First-of-its-kind, cutting-edge, breakthrough
• Transform, reinvent, reimagine
• Next-generation, future of [category]
• Beta, early access, exclusive

Words That Attract Mainstream Buyers (Add These):

• Proven, trusted, reliable
• Industry-standard, established, mature
• Secure, compliant, certified
• Used by [specific peer companies]
• ROI, efficiency, cost savings

But here's the nuance: this isn't just about swapping words. It's about what you choose to emphasize.

Example: Cursor's Homepage Evolution

Early (2022): "An AI-first code editor that understands your codebase"

Current (2025): "Trusted by over half of the Fortune 500 to accelerate development, securely and at scale"

The technology didn't fundamentally change. But the emphasis shifted from capability (what it does) to credibility (who trusts it) and outcomes (what it delivers).

The Cultural Challenge: When Your Team Resists the Shift

Perhaps the hardest part of crossing the chasm isn't the market or the messaging, it's your own team.

Your early employees joined to change the world. Now you're asking them to build boring features for boring customers who want boring solutions. Your revolutionary marketers need to become safety-conscious communicators. Your visionary salespeople need to become process-driven consultants.

One founder described it to me this way: "We spent two years hiring pirates. Now we need navy officers. The pirates are not happy."

This cultural resistance can kill your crossing attempt. Some practical approaches I've seen work:

1. Frame it as evolution, not betrayal: You're not abandoning the vision, you're making it accessible to more people
2. Create separate teams: Keep innovation teams focused on the future while go-to-market teams focus on the mainstream
3. Celebrate different metrics: Shift recognition from "most innovative feature" to "highest customer retention"

Be honest about departures: Some early employees won't make the transition, and that's okay

A Practical Playbook for Early-Stage Founders

As an early-stage founder, here’s what you can actually do:

Month 1: Diagnosis and Decision

Week 1-2: Analyze your current state

• List your last 20 customers
• Categorize them: visionary vs. pragmatist characteristics
• Track your sales cycle length trends
• Document common objections

Week 3-4: Make the strategic decision

• If >60% of recent customers are pragmatists, you're likely ready
• If sales cycles are lengthening, you're hitting the chasm
• If CAC is rising while close rates fall, it's time to evolve

Month 2-3: Message Testing

Start small and test:

1. Create two versions of your pitch deck, one visionary, one pragmatic
2. A/B test email campaigns with different language
3. Run targeted LinkedIn ads to test which messaging resonates
4. Interview 10 lost deals to understand what would have convinced them

Sierra's approach: They tested messaging with focus groups of customer service leaders before launching publicly, ensuring their language resonated with pragmatists from day one.

Month 4-6: Reference Building

Focus on one segment:

1. Identify your most successful, referenceable customers
2. Find the pattern, what industry/size/use case do they share?
3. Get 3-5 to agree to be references
4. Create case studies in their language, not yours

Month 7-12: Gradual Evolution

Don't flip a switch, evolve:

• Add an "Enterprise" section to your website
• Maintain your vision in "About" but lead with proof on the homepage
• Continue serving early adopters while building for mainstream
• Test new messaging in sales calls before changing marketing materials

The Timeline Reality

Crossing the chasm takes 12-18 months. Not 3-6. And definitely not a Monday morning. This is a transformation, not a tactics change.

Cursor took nearly two years to evolve from a developer tool to an enterprise platform. Jasper's transformation from writing assistant to enterprise marketing platform took 18 months. Perplexity's enterprise launch came two full years after their consumer launch.

But here's the critical insight: you typically only have 18-24 months of runway when you hit the chasm. Which means you get one, maybe two shots at finding the right mainstream positioning.

The Modern Twist: AI Changes the Game

Today's AI startups face a unique challenge: the technology evolves so fast that mainstream buyers struggle to keep up. This creates both opportunities and obstacles.

The opportunity: Mainstream buyers are more willing to adopt AI than previous technologies because competitive pressure is intense. No one wants to be left behind.

The obstacle: The gap between what early adopters and mainstream buyers understand about AI is wider than ever. Early adopters are experimenting with AI agents and autonomous systems. Mainstream buyers are still trying to understand what an LLM is.

Companies like Anthropic and Sierra have solved this by completely hiding the technical complexity. They don't talk about models or parameters. They talk about outcomes and compliance. They've learned that mainstream buyers don't want to understand the technology, they want to trust that it works.

Making the Choice

The decision to cross the chasm is existential. You can choose to remain a specialty provider for early adopters, there's honor in that. But if you choose to cross, you must commit completely.

Half-measures fail.. The company that tries to be everything to everyone ends up being nothing to anyone.

I recently worked with a founder who was struggling with this choice. Their early adopter customers were pushing for more experimental features. Potential enterprise customers wanted stability and support. They tried to do both.

Result: The early adopters felt abandoned. The enterprises felt the product was too complex. Growth stalled completely.

The lesson: Choose your path and commit. Either stay focused on innovators and early adopters, accepting the smaller market. Or transform everything, product, messaging, culture, to serve the mainstream.

The Bottom Line

Your early customers gave you life. But clinging to them might mean death.

This isn't betrayal, it's evolution. The mainstream market is 5x larger than the early adopter market. To capture it, you must speak its language, address its fears, and prove your value in its terms.

The companies that successfully make this transition don't just grow, they define entire categories. Those that fail become cautionary tales, remembered as "ahead of their time" or "too innovative for the market."

The question isn't whether you should evolve your messaging and positioning as you grow. The question is whether you have the courage to transform everything when the market demands it.