The terms alpha and beta to describe a startup’s launch product are simply wrong. Last week, I wrote about so many startups failing to launch and many of the sites are in “beta” mode. Alpha, beta, bronze, silver, gold, it’s all stinkin’ thinkin’. Startups must be focused on the customer and providing value to them. Orient your release names towards customer acquisition and let your early adopters tell you when you can start charging.
Why? If you’re not focused on getting paid, how and why are you in business? Secondly, if you change to this kind of naming convention, your potential paying customers have the notion that others have adopted it. It’s true, early adopters have, they just haven’t paid for it or have paid a lower fee.
Consider the following names for your release stages:
Demo – Enough to truly demonstrate your value propositions. This should be completely out in the open if you’re confident that no one can imitate you easily. If they can, I would suggest that you don’t have enough to get to market in a big way.
First Adopter(s) – Just enough code beyond your demo for your first adopters to grasp your value proposition and consider paying for the product (unless you’re freemium of course.) The great part is that you can add more features until your early adopters say “Yep, we love it and you can start charging for this. In fact, we’ll start paying for this!” (Next question of course, how much would they pay?)
Paying Customer – You’ve validated your principle value proposition and customers are willing to pay. There might be other more suitable names but your customers get this one. Potential paying customer: “When did you release this product?” You: “We had early adopters in March.”
Once you have paying customers, lean and agile notions start to shine. No more traditional phase names as you’re continually putting customer-driven features in front of them.
I don’t think people realize how extremely hard it is to get a company launched. Some folks say that if you make into college ball, you have a 1:40 chance of turning pro. The odds are longer for startups.
My friend, Tom Summit of Genotrope does quarterly updates called “When will they launch?” that lists a few startups we’re all waiting to see. Only one out of twelve have actually launched. The rest are in “beta” or “stealth” or they’ve morphed into something else. Tom only listed companies he knew about. I could add six or seven to his list! That tells me that out of about twenty companies, one launched.
I’m think being generous here but I think once you’ve launched, you have about a 1:50 chance of getting angel or VC funding.
1:20 X 1:50 = 1:1000.
The odds are longer for web companies that are organically self-funded. Perhaps even as high as 1:2000. I know three or four and they’re very patient. They also have an anchor business that helps them fund the new one.
That should tell you one or two things: You need commitment and you need to be realistic.
As a startup consultant, I come across budding entrepreneurs who say “We’ve got this great idea but I don’t have any money! Can you help me find an angel?” only to find out they’re part timers who have an ok idea, no code, and no real commitment. Sound harsh? Go code and then we’d love to talk to you.
Others that I talk to have code but they’re part timers. Depending on the circumstances (my time commitments and a deal), I’ll work with them – depending on how long it might take them to launch. Are they prepared to quit their job? It depends. If it’s a straight IP play, they might not have to. If it’s an operating business, how much are they willing to give up?
Still others are full time entrepreneurs who continually morph their business model until they find something that works and they like. That’s ok. It depends on their ability to stay in the market. Each change in focus represents sunk resources and time.
Knowing the odds, are you committed?
Seth Godin challenges conventional wisdom (again!) with his new book Linchpin. In it, he says that we have a choice of being cogs in the big corporate wheel or sharing our best gifts with others. Some companies call people like this a pain in the ass and others embrace them. He calls them linchpins. Mr. Godin believes they’re indispensable and have undeniable qualities and habits that we all have and should expose and promote.
Mr. Godin goes to great lengths to tell us how corporations have reinforced the notion of sameness while seeking lowest cost delivery models. Linchpins don’t follow this model.
There are four or five major precepts he promotes while ultimately letting us know that we have to give to receive. I believe the funniest is the Lizard Brain, which is a part of our subconscious (somehow along the way we were trained to have it) that only seeks food and safety.
If you accept the notion that you have undeniable, indispensable gifts, Linchpin goes on to say how “The Resistance” will constantly fight you. Why? You’re of two brains, one being called the Lizard Brain. He says that a part of us is conformist and seeks to fit in and by doing so, we rob the world of our best work and what is right for the rest of the world. The other brain seeks to be an artist and knows that non-conformity through the sharing of our gifts (through emotional labor) is the right thing to do. Emotional labor are all of the uncomfortable tasks that we know we have to do; despite the norms that hold us back.
I believe he does a wonderful job discussing how we got to the notion of sameness (or nourishing our lizard brains). Corporations are forced to do what’s best for the shareholder and unfortunately, that shareholder doesn’t really care how they did it. Individual shareholders don’t have a voice, only the market. Unfortunately, now, the market consists of a few decision-makers and lots of computers backed up by lobbyists and politicians.
Boiling it down: Mr. Godin underscores the eternal conflict between our hearts (and the things we know are right, the things we know we have to do) and the notion of sameness, conformity, and lowest cost delivery.
Mr. Godin is a linchpin and rebel. As with his other books, there are a significant number of unattributed references and my lizard brain had to fight this notion to accept his message. I also had a difficult time knowing which things he was promoting over others but this is his style. To him, perhaps it is all most important. My lizard brain fought against that so I could form some conclusions and write this! My lizard brain makes my head spin. Does yours?
All in all, a 4 out of 5. It would have had a 5 if I could have seen a PowerPoint first. Get it!
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- Quieting the Lizard Brain (incsub.org)
- Seth Godin Gives It Away (mneylon.com)
