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by • November 9, 2011 • Funding & investment, ProductComments (6)148

Launch is a tool, not a goal

You have $10k and it’s going to cost $10k to finish the product and launch.

Great news?

Not exactly.

Launching in this situation is a mistake. Highly tempting, but still wrong.

You need runway to benefit from launching

Products require post-launch improvement, updates and maintenance. Your team requires food and a roof over its head. Users require an active support relationship to become evangelists. Investors require a team that’s able to move forward without them.

Running yourself out of money nullifies the potential of launching.

It’s like selling your farm to buy a tractor. You’ve got a great tool you can’t use.

Launching isn’t the goal — it’s one of many tools that can push the business to the next level.

If you spend all your money getting there, you don’t have any time and money to make use of it. You’re then out of business unless you take off from a crude version 1 like Hot or Not (which, incidentally, is the most recent example I could think of in this category).

Sprinters don’t aim to stop on the finish line. They accelerate through it.

What are your resources? In the above example, it’s $10k. You might spend it on a launch under the misguided belief that the world will then come to you and very quickly sign some paperwork.

Ask yourself what you want from the world: Investment? Revenue? Validation? Feedback?

If an investor won’t sign the check now, they aren’t going to sign it when you’ve written another 10 grand’s worth of code. They already know you can write code. What are they really worried about?

I’d wager it’s evidence from the market.

Cheaper ways to enjoy the benefits of launching

Launching isn’t the only way to get real customer feedback.

If you’re launching to prove it to yourself, what then? You’ve got your evidence and are out of resources to make good on the opportunity you’ve discovered. Will you go three months’ burn beyond your initial cutoff point to raise money? Or 6 months beyond to find customers and then investors?

The only case I can imagine emptying the bank account to launch is if you have fully committed clients or investors who have explicitly stated that they are paying for this product the moment it launches (and even then, what are the payment terms? I once enjoyed 6 months of cashflow nightmares while a big media company took their time paying an invoice).

Otherwise, if you don’t have enough runway to continue beyond it, then “launch” is a red-herring. Ship some experiments, plant some flags, talk to the market, and find a cheaper way to achieve the business goals you are hoping launch would have provided.

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6 Responses to Launch is a tool, not a goal

  1. Ryan Cumley says:

    This is fantastic advice. Shipping an “experiment” and still having enough cash in the bank to keep going for a while is far preferrable to an ‘all or nothing’ launch in my book too.

    I love your point about needing market validation, not proof of coding ability. There is a multiplier effect to even small amounts of revenue earned from an “experiment”. Earning $1,000 from a market test may not be enough to pay your rent, but hard cash from fresh customers will seriously change the tone of conversation with potential investors, vendors, partners, etc… And the psychological boost to your self confidence will probably be helpful too.

    Great post.

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