Do you ever serve a half cooked meal in a restaurant?

By Elie Nammar

While many entrepreneurs struggle with the question of whether their product has to be “perfect” or it can be launched with a few “bugs”, I believe there are three main key elements that need to be considered when deciding:

-    Is the product “free” to consumers? In the event a company launches a product that customers have to pay for then he/she is unlikely to come back if the product launch is a failure. In fact, let’s say I buy a blackberry for $x and it ends up a waste of my money (the same could be said about Apple). In this case, I will definitely not buy another one unless the newer phone has been validated by many others as much better than the one I originally bought. But then again if many like me have had a bad experience with their initial blackberry then others will be unlikely to buy the new one which would lead to a vicious cycle. Now payment can also be considered under other forms. While some products might be free, they would require a significant time investment to be functional such as creating an online profile.  On the other hand, if the product is free and easy to use then I would be willing to try it out again in the future even if at the time of its launch it did not meet all my expectations.

-    Is the product subject to network effects? If the product I’m launching is subject to network effects then it makes a lot of sense to launch as soon as the minimal product requirements have been met. If we compare today’s Facebook to when it was launched, a lot of things changed and are still changing but the core functionalities are still the same. Launching fast in this case enables you to win the network effects game. Had Google launched Google+ at the same time as Facebook, it could have competed effectively but due to network effects and high stickiness with Facebook, Google+ is a failure today which leads me to the last point.

-    Are you launching in an existing market? If this is true then you shouldn’t launch your product unless you provide the consumers with a significantly better value proposition than the main player. Again Google+ is a perfect example. Providing nothing better than Facebook, it did not succeed. Had the switching barrier been lowered by providing the possibility of transferring your profile to Google+ (similarly to transferring data from Firefox to Chrome) then maybe it would have helped (privacy issues would need to be considered in this case). Google however succeeded very well with Gmail (which was in Beta mode from 2004 till 2009…) by providing more storage space to users when compared with Hotmail or Yahoo.

So if you’re in the dining business, you probably want to serve fully cooked meals. But if you’re in the free/network effects business, then you probably want to launch as soon as you provide the minimal capabilities required for a proper functioning of the platform.