Friday, November 27, 2015

6 Reasons Startups Should Skip the Big-Bang Launch

big-bang-launchBig-bang hard launches make sense for large enterprises like Apple or Microsoft, who are building on existing revenue streams and have the resources for lavish events, Superbowl ads and large inventory buildups. But for startups with limited resources and experience, I always recommend a soft launch or toe-in-the-water approach in a local market -- and scale up later.

In fact, for startups, it usually makes sense to announce your solution on social media and blogs even before you have built the first one. Think of it as an inexpensive way to do some real market research -- which big companies can’t do, for fear of getting an antitrust violation for announcing vaporware to impede the market. Smart startups are already doing it on crowdfunding platforms.

Then it’s time to evaluate response and feedback, make the necessary plan pivots, and try it again. Iterating this process, until you see some real traction, is far less risky and expensive than the big-bang rollout. Let me summarize the advantages of this to your startup:

  1. Immediate real customer feedback. Startups which insist on operating in stealth mode in fear of competitor response miss the more important customer response. In addition, with today’s fast moving market, the whole environment can change in the year or more you are hiding out to get the solution and your total infrastructure built.

  2. Small real revenue today is better than large later projections. All investors want to see real evidence that the dogs will eat the dogfood before they give any credibility to your hockey-stick projection curves. Funding to support a rollout is much harder to procure than funding to support a scale up, after an initial hint of success.

  3. Maximum agility for required pivots. It’s amazing to most entrepreneurs how fast their little startup can become a battleship, hard to turn in a storm. Executing multiple iterations while very small is critical for anyone with a limited budget and runway. Startups need the agility to test various business models and positioning messages.

  4. Partners and distribution channels will take you seriously. In many business arenas, brand-name partners and distribution are a prerequisite to scaling the business. A validated early customer following will get their attention, and allow you to negotiate the support you need in time for the real business surge.

  5. Build your audience and the product at the same time. With social media and inexpensive website tools, you can build momentum in the marketplace without the need to spend money on a big-bang rollout. With these tools, it’s easier to measure impact and progress and make required changes than trying to measure big-bang results.

  6. Time to train and prepare staff to deal with customers. A soft launch is less stressful to the team and lets them more gradually re-acclimate from a development environment to a delivery environment. It takes time to learn how to do customer service, interviews and demonstrations. A few missteps can totally destroy your big-bank launch.

But an iterative rollout or soft launch should never be used as an excuse for poor planning or an untested solution. Especially with a minimum viable product (MVP), every feature included must be high-quality, documented well and properly marketed. Free give-away products and beta tests are not the same as rollouts -- you get no validation of the business model.

In any launch, it’s important to have the right training and controls in place to prevent a visible marketing or delivery disaster. Customers have long memories, and they can spread the word very fast with social media, so negative reviews can easily be non-recoverable. It is much smarter to make a few people very happy than to leave many people or even a few unimpressed.

Most of the superstar companies we know like Facebook and Google have never had a big-bang rollout. They started slowly, in limited areas such as one university or city, and then expanded slowly, based on customer demand and resources available. Even big brands like McDonald's and Walmart entered the scene one store at a time.

Yet some entrepreneurs find it hard to resist the urge to get their product or service into the hands of a large number of people at one time. They are so certain that customers are poised and waiting that they forget the costs of a hard launch -- and the risks of a highly visible failure. It’s one of the few times in a startup when it actually pays to be less aggressive. Proceed with caution.

Marty Zwilling

*** First published on on 11/18/2015 ***



1 comment:

  1. Nicely done article. Succinct, helpful, and compelling!!