VentureTips…Advice for those who Venture (3)

A couple of weeks ago LinkedIn co-founder, Reid Hoffman, posted his Top 10 Entrepreneurship Rules for Building Massive Companies.  Most of them were pretty good rules, even for building moderately massive companies.  Often “Ten Rules” lists are difficult to assemble without a clunker or two in there.  Even Hoffman’s #2 Rule “Aim Big” is kinda weak.  But then again, even the greatest rock bands sometimes need to fill up a disc with some “filler”. 

However, there are often real gems in there, too.  One in particular in Mr. Hoffman’s list is the following:

“Rule #6: Launch early enough that you are embarrassed by your first product release.
With my first startup, Socialnet.com, it took us nine months to launch the first product. That was a disastrous mistake. We wanted to have all the detailed functionality right away, including social controls to people could decide to connect or not with the people in their networks. We wanted everyone to “Ooh” and “Aaah” about how terrific the product was. We wasted a bunch of time and it put us months behind on more important problems that needed to be solved, such as how to get our product in the hands of millions of people. From that I learned, if you are not embarrassed by your first release, you’ve launched too late!”

This crystallized a notion in my own head that was rolling around up there, but that I hadn’t had all the right words for.  Namely, when you’re developing a product or service and you’ve got it all visualized in full deployment with millions of customers using it, capture that vision on paper, but then take a few steps back.

From now on, I want to see a product development plan that intends to launch a scaled-down version first.  Get the first version out early.  Mark it beta.  If it is for business users, don’t build the whole damn thing before getting customer feedback.  Build a core functionality and contact potential customers for input before selling them anything.  It is entirely possible that you will build a relationship with a few customers along the way.

Obviously the product has to work.  But every software/service plan I see, and most of the products, have multiple functionalities to it.  It captures patient information and integrates into billing.  Or it provides real time travel advice and allows you to book hotels.  Or it helps colleges track graduates and increases capability of the career placement office.  Often these “big ideas” need to be sold to too many people inside a buying center and things bog down.    Break it down.  Simplify it.

I’ve got a client that produces RFID reader equipment and the original plan was to produce such a sophisticated, rugged piece of equipment that it would be used in the biggest, fastest moving warehouses.  The product works, but because the equipment needed to be sold into such large, expensive projects, sales bogged.  So, much simpler, less expensive readers were designed for less intense applications and project opportunities are flowing.

So think about your big vision, then back it off a notch or two.  See if you can build a scaled down product to enter into the market at first.

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About TechonomicMan

Manager, Entrepreneurial Services at Ben Franklin Technology Partners in Northeast PA.
This entry was posted in Entrepreneurial Advice and tagged , , , . Bookmark the permalink.

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