Understanding When to Launch
by Katherine Nadler
For an entrepreneur, one of the most consuming decisions is determining when to launch. Arguably, a product is never complete; therefore, it is up to founders to determine what level of incomplete is acceptable. To do so they must allow their business model and market context to drive their decision making. Asking the right questions is very important.
Does the business model rely on virality? When a product anticipates customer acquisition through virality it makes sense to launch early, sacrificing some of the quality that extra time would afford. As much as entrepreneurs may convince themselves that their product is perfectly positioned to generate “word-of-mouth” or network effects, the best way to know for sure is to test that hypothesis in practice (often first through a beta launch). While the world’s become inherently social as a result of game changers like Facebook, Zynga, Twitter and Foursquare, it does not mean that products will effortlessly generate the same social response.
How damaging is a “buggy” product to my company’s value proposition? Within different businesses, the same mistakes can have very different impacts. Using Airbnb as an example, a glitch in their website where a message to an owner got lost would be annoying but would not impact the value proposition of the company. Users would still be able to find places to stay and base their opinions on that experience. On the other hand, lost files on Dropbox would be nowhere near as innocuous a mistake. This is because Dropbox draws attracts users with its claim of simplicity, reliability and safety. Therefore, when thinking about when to launch, it is important to consider the deal breakers for customers and prioritize those above all else.
What is the competitive landscape? Ventures that are entering an existing market have a completely different set of challenges from one looking to enter a new market. In an existing market, the product must be superior to those offered by established players; this can be very difficult for a resource-constrained young startup. However, in a relatively new market there might be some benefit to actually letting others enter the market first. While letting competitors grab user attention first seems counter intuitive, looking at how financial account aggregator Wesabe lost its market to Mint.com provides some interesting perspective. In a blog written by the former co-founder of Wesabe, he reflects on how “There's a lot to be said for not rushing to market, and learning from the mistakes the first entrants make. Shipping a ‘minimum viable product’ immediately and learning from the market directly makes good sense to me, but engaging with and supporting users is anything but free. Observation can be cheaper.” When entering a market where someone has gotten there first, rushing into the market prematurely with a subpar product can be very damaging while waiting can offer great rewards.
Every situation will likely have many considerations to weigh when deciding when to launch. In my opinion, founders must be careful not to jump to conclusions. Just because a founder believes in the lean startup methodology does not mean he or she should introduce a flawed product. Additionally, founders must consider all different stages of launching and realize that they have the power to separate the launch of their product from the launch of their venture in the press. At the end of the day, the best that anyone can do is make an informed decision and hope for the best.
For an entrepreneur, one of the most consuming decisions is determining when to launch. Arguably, a product is never complete; therefore, it is up to founders to determine what level of incomplete is acceptable. To do so they must allow their business model and market context to drive their decision making. Asking the right questions is very important.
Does the business model rely on virality? When a product anticipates customer acquisition through virality it makes sense to launch early, sacrificing some of the quality that extra time would afford. As much as entrepreneurs may convince themselves that their product is perfectly positioned to generate “word-of-mouth” or network effects, the best way to know for sure is to test that hypothesis in practice (often first through a beta launch). While the world’s become inherently social as a result of game changers like Facebook, Zynga, Twitter and Foursquare, it does not mean that products will effortlessly generate the same social response.
How damaging is a “buggy” product to my company’s value proposition? Within different businesses, the same mistakes can have very different impacts. Using Airbnb as an example, a glitch in their website where a message to an owner got lost would be annoying but would not impact the value proposition of the company. Users would still be able to find places to stay and base their opinions on that experience. On the other hand, lost files on Dropbox would be nowhere near as innocuous a mistake. This is because Dropbox draws attracts users with its claim of simplicity, reliability and safety. Therefore, when thinking about when to launch, it is important to consider the deal breakers for customers and prioritize those above all else.
What is the competitive landscape? Ventures that are entering an existing market have a completely different set of challenges from one looking to enter a new market. In an existing market, the product must be superior to those offered by established players; this can be very difficult for a resource-constrained young startup. However, in a relatively new market there might be some benefit to actually letting others enter the market first. While letting competitors grab user attention first seems counter intuitive, looking at how financial account aggregator Wesabe lost its market to Mint.com provides some interesting perspective. In a blog written by the former co-founder of Wesabe, he reflects on how “There's a lot to be said for not rushing to market, and learning from the mistakes the first entrants make. Shipping a ‘minimum viable product’ immediately and learning from the market directly makes good sense to me, but engaging with and supporting users is anything but free. Observation can be cheaper.” When entering a market where someone has gotten there first, rushing into the market prematurely with a subpar product can be very damaging while waiting can offer great rewards.
Every situation will likely have many considerations to weigh when deciding when to launch. In my opinion, founders must be careful not to jump to conclusions. Just because a founder believes in the lean startup methodology does not mean he or she should introduce a flawed product. Additionally, founders must consider all different stages of launching and realize that they have the power to separate the launch of their product from the launch of their venture in the press. At the end of the day, the best that anyone can do is make an informed decision and hope for the best.
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