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Should Start-Up Companies and Small Businesses Release Their New Software Early or Wait Until it is Perfected?

February 3rd, 2010 | Online & Small Business Resources,Small Business,Small Business Tips | 3 Comments »
This question has long been debated by people in the software industry and has come under increased scrutiny since the dot-com era when every man, woman, and child with an HTML reference manual and a website domain registration started creating their own e-commerce sites.  Should start-up companies and small businesses release their first version of software as soon as possible in order to take advantage of being the first one to the marketplace or should they wait and carefully hone their product until it is more mature? 
 
I recently came across a post by Jason Cohen on the OnStartups blog where he makes a good argument for companies to take their time when releasing new products to the general public.  One argument that Jason makes in this post that I thought was very interesting is that the best products are not built by consensus and that some of the best products in recent history (like the iPod from Apple) actually went against conventional wisdom when they were initially released and thus early customer feedback can be an overrated benefit.  He mentions how the iPod has a battery that can’t be replaced, does not have an FM transmitter, and has a confusing wheel-based user-interface but still managed to revolutionize the way we listen to and purchase music.  While this is a great point, I would argue that these are a few major faults in the product that Apple was able to overcome because of the real game-changing feature that they introduced with the iPod: purchasing individual songs on iTunes and allowing them to be easily downloaded to the iPod. 
 
On this topic I would argue that going against public sentiment is generally a bad idea for start-up companies and that most software products will greatly benefit from early customer feedback. The iPod had the benefit of being developed by a multi-billion dollar company like Apple so it could take risks on certain features, but smaller companies don’t always have that luxury.  Getting a product in the hands of it’s target users early so that they can play with it a little and provide invaluable input can be a huge benefit to companies that decide to release their products and software before they are 100% complete.
 
Another argument that Jason makes in his post is that releasing too early can ruin a company’s reputation because the first customers to use the software may tell their peers that your software is buggy or doesn’t work the way it is advertised to work.  I would have to agree with this argument and I think that this is one of the biggest concerns for a small company releasing software early.  I think that a company has to set expectations with their early customers, but also has to take the time to find and fix any major bugs that would cause a negative customer experience before the initial release of their software.  There is a definitely a fine line here that small businesses and start-up companies must strattle in order to get their product early but not have it be buggy or lacking in functionality.  I think that this is definitely a hard call for a fledgling company to make early on but an important one that must be made amongst all the major stakeholders in the company.
 
So what is the answer to this age old question of releasing early or later?  I think in the end the answer is different for every company’s unique situation so in my final analysis I will say ”It depends…”  What do you think?
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3 Responses

  1. Great post!

    I’m not sure that I have an opinion either way, but this does remind me of a video that I was watching last week.

    LessAccounting Co-founder Steve Bristol makes a good case for why start-ups should NOT wait to launch their app.

    http://aac2009.confreaks.com/07-feb-2009-09-00-how-to-make-a-successful-rails-app-steven-bristol.html

    Definitely worth watching.

  2. [...] Should Start up Companies and Small Business Release Their New Software Early or Wait Until Its Perf… – This is our post that discusses the age old dilemma for startups on when is the right time [...]

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