Friday, March 13, 2009

Don't launch

Here's a common question I get from startups, especially in the early stages: when should we launch? My answer is almost always the same: don't.

First off, what does it mean to launch? Generally, we conflate two unrelated concepts into the term, which is important to clarify right up front.
  1. Announce a new product, start its PR campaign, and engage in buzz marketing activities. (Marketing launch)
  2. Make a new product available to customers in the general public. (Product launch)
In today's world, there is no reason you have to do these two things at the same time. In fact, in most situations it's a bad idea for startups to synchronize these events.

Launching is a tactic, not a strategy. In the right situation, it's a very useful tactic, too. In particular, a marketing launch can help you do three things (courtesy, as is most of my marketing advice, of The Four Steps to the Epiphany):
  1. Drive customers into your sales pipeline. This is the usual reason given for a marketing launch, but for most early stage startups, it's a failure. That's because a marketing launch is a one-time event, and rarely translates into renewable audiences. Worse, if you are not geared up to make the best use of those customers when the launch sends them your way, it's a pretty big waste. And, as we'll talk about in a moment, you don't get a second chance.

    Because this reason is so often used as an excuse, I recommend giving it extra scrutiny. Are you really choosing to engage in marketing in places where your potential customers pay attention? Do your customers really read TechCrunch? If not, do not launch there. Even if you must launch to your customers, avoid the urge to also launch in extra places, just because your PR firm can do it at the same time.

  2. Establish credibility with potential partners. In some businesses, especially in certain industries like traditional enterprise software, you simply cannot bring a new product to market on your own. You need to combine your product with others, and this requires partners like OEM's or system integrators. A marketing launch can help you get in the door with those partners, if you're having trouble getting their attention. Again, it's critical to focus your marketing launch on those publications, venues, and channels that your potential partners are paying attention to. If you don't know who the partners are, what they pay attention to, or what kind of message they are open to receiving - it's too early to launch. Do some Customer Development instead.

  3. Help you raise money. If you are having trouble raising money, sometimes a little PR can help. But don't be too sure. When VC's and other investors see PR activity, they are going to expect to see significant traction as a result. If you launch and see only mediocre results, it may actually make it harder to raise money. Sometimes, it can be easier to raise money pre-launch, if the launch is not imminent and there is some fear on the part of investors that they might lose the deal when the launch drives awareness of your company to all their peers.
Those are the potential goals of a marketing launch, but those are not its only effects. It also has causes other tectonic shifts that many startups don't consider:
  1. A marketing launch establishes your positioning. If you don't know what the right positioning is for your company, do not launch. Figuring this out takes time, and few entrepreneurs have the patience to wait it out, because the business plan does such a good job of explaining what customers are going to think. The problem is that customers don't read your business plan.

    When you launch with the wrong positioning, you have to spend extra effort and money later cleaning it up. For example, we did some early press (in Wired, no less) for IMVU that called us the next generation of IM and compared us positively to AOL. At the time, we thought that was great. Now, I look back and cringe. Being compared to AOL isn't so great these days, and IM is considered a pretty weak form of socializing. When we finally launched for real, we had to compensate for that early blunder.

    Of course, we didn't realize it was a blunder at all. We were actually really proud of the positive coverage. In fact, at that time we were auditing Steve Blank's class at Haas, since he was an early investor. Since we hadn't shown him much in the way of progress recently, we actually brought in the article to show off. I won't recount what happened next (although your can hear us recount it in audio). Suffice to say I can trace my understanding of what it means to launch to that day. We're lucky we had a mentor on board who could call us on the bad strategy before it was too late. Most startups aren't so fortunate.

  2. You have to know your business model. Most startups launch before they've figured out what business they're in. Pay attention to your fundamental driver of growth. If the product needs to be tweaked just a little bit in order to convert users into customers, you want to figure that out before the launch. If the viral coefficient is 0.9, keep iterating until it's 1.1 before you launch. And if your product doesn't retain customers, what's the point of driving a bunch of them to use it? Spend your time with renewable sources of customers and iterate.

  3. You never get a second chance to launch. Unlike a lot of other startup activities, PR is not one where you can try it, iterate, learn, and try again. It's a one-way event, so you'd better get it right. Remember the story about IMVU's early encounter with Wired? When we finally did launch the company, even though our product had grown and changed significantly, Wired didn't cover it.
I wrote a little bit about the epic launch we had at a previous startup in my post Achieving a failure. We really did it well, with a great PR firm and great coverage. New York Times, Wall Street Journal, CNN, the works. But it turned into a crushing defeat, because we couldn't capitalize on all that attention. The product didn't convert well enough, the mainstream customers we were driving weren't ready for the concept, and the event fed expectations about how successful the product was going to be that turned out to be hyper-inflated.

Worse, we tricked ourselves into thinking that what the press said about our success was actually true. And even worse, we'd cranked up the burn rate in order to be ready to handle all those millions of mainstream customers we anticipated. When they failed to materialize, the company was in big trouble.

Why do startups synchronize marketing launch and product launch? I think it has mostly to do with psychology.
  1. Investors push for it. Many investors have a desire to see their companies lauded publicly. This actually makes a lot of sense, if you see the world from their point of view. Third-party validation is one of the few forms of feedback they have available to them. Most investors in startups have a 3, 5 or even 10 year horizon for liquidity. That means they don't really know if they made a good investment for a very long time. Seeing the press talk about what a great investor they are is a great form of feedback. As a bonus, it gives them something to show their partners and LP's.

    This trend is so strong, this is actually a question I recommend to screen potential investors: "How do you know it's time to launch the company?" See if their answer is about tactics or strategy.

  2. Founders push for it. Who doesn't want to see their name in print? Investors aren't the only ones with ego invested in the company. In some ways, founders are even worse. How do they know they are making progress? They spend so much of their time trying to convince everyone around them that their idea is great and the company is doing well: employees, investors, partners, friends, family, significant others - it's a long list. But when they go to sleep at night, who's there to convince them that they are making progress? My experience is that many founders actually have a deep anxiety that maybe they are not succeeding. Sure, they are keeping everyone busy, but are they really working on the right things? A marketing launch is a temporary salve for these kinds of worries. Plus, it gives you something you can send home to mom (hi, mom!). Unfortunately, it's not a long-term solution, so it can become a bit of an addiction and, therefore, a huge distraction.

  3. There is also fear of the accidental launch. Companies that are thinking strategically sometimes reason like this: "if we do a product launch, members of the public will see our early product. They'll form their own opinions, maybe see our wrong positioning, and maybe talk to members of the press. By the time we're ready for a marketing launch, it will be too late. Better to launch now and get ahead of the story, or stay in closed beta until we're ready."

    In most situations, this fear is misplaced. Here was our experience at IMVU, which I have seen replicated at many other consumer internet startups. We did alienate and mis-position to our early customers. Luckily, if your product isn't good enough to have traction, you simply cannot alienate very many customers - because you can't get them engaged with the product. When you finally do get traction, the millions who see the right positioning will dwarf the few who saw the wrong one. And you can get an astronomical amount of traction before anyone will write about your company of their own accord. IMVU was a top-1000 website in the world, with millions of customers and making millions of dollars without getting any significant press coverage.

    In fact, we often felt frustrated when new startups with a fraction of our success got terrific write-ups in Silicon Valley-centric venues. We had to resist the urge to launch just to make that frustration stop. And, more often than not, we'd watch those companies flame out and die while we continued to grow steadily every month. If we'd wasted energy chasing their PR coverage, we'd probably have died too.
So don't combine your product launch with a marketing launch. Instead, do your product launch first. Don't chicken out and do a closed beta; get real customers in through real renewable channels. Start with a five-dollar-a-day SEM campaign. Iterate as fast and for as long as you can. Don't scale. Don't marketing launch.

How do you know you're ready for marketing launch?
  • When you have a strategy for the launch, which means knowing why you're doing it. Make sure it's solving a problem you actually have, and not one that you think you might have some day.

  • Know what the success metrics are for the launch. If you know what the strategy is, you'll know how to tell it was a success. Write it down ahead of time, and hold yourself accountable for hitting those objectives.

  • Know what your fundamental driver of growth is. Make sure the math for your model makes sense. That way, you'll be able to predict the future. When customers come in from your marketing launch, you'll know exactly what they are going to do and how that benefits your business.

  • Know where, when, and how to launch. If you know what your strategy is, and you know your target well (customers, partners, investors) you will also know where they are paying attention, and what messages they are able to absorb. Hold yourself and your PR agency accountable for developing a high level of understanding of these questions ahead of time.
One last suggestions. Think about the psychological motivations that are driving you to want to launch earlier than makes sense for your company. See if there's anything you can do to address those underlying needs that does make sense. For example, if your employees are feeling frustrated that they don't get much third-party validation for their work, use a board of advisers to fill that role. Bring in people that they (and you) respect to evaluate your progress and make suggestions. In my experience, this has provided an effective boost to morale and also helpful guidance.

When you're ready, enjoy the launch. Until then, resist the urge.


  1. Over at PBwiki, our general policy is to conduct a marketing launch after the product is already a success. That way we don't have to worry about being right.

    But since Eric is an advisor to the company, that's probably not much of a surprise!

  2. For unknown people like us, I can't see how we can make a "product launch" withtout trying our best to have a "marketing launch". We have to talk about our product to a lot of people just to have a small user-base for a private beta. If we don't to create an event for the launch, we'll never get coverage anywhere because no potential user will know us. What would you suggest for a business like this?

  3. Great article. We did the same for our company, although your article does an excellent job of identifying a lot of the psychology and "false strategy" that drives many launches. Nice job.


  4. excellent article although it breaks the whole concept of Launch now worry later. We soft launched our product few days ago, but the marketing press came without us being involved. what happens when newspapers call you for an article? reject them? Sometimes you cant turn down a great marketing opportunity just because its close to your product launch.

    Also, i do think that you can NEVER be enough sure you are focused and right on your stand with the company. Customers are there to focus you. You cant really anticipate what the customer will like or not. Its just impossible. so holding your launch until your ready is bad. You will NEVER be ready until some customers hit you.

    I do agree on the point of knowing how to channel that marketing pr into hard cash. We didnt manage todo that yet. even when we stood on Techcrunch50 event or won mini seedcamp. I do think that there is no such thing as bad PR. If there is PR its better that you have then none. and passing PR because you feel your not ready is the current situation for us 24/7. we are never ready.

  5. And also, the Over hyped inflated thing is so true. Sometimes press make your startup look 20$ mil startup when its just a fraction of it.
    I think the key is to stay focused and not over hype yourself. The rest can believe what they want. Aslong as you stay real

  6. We did this intuitively with and it's working... gave us two years of a beta product to build up the service and the brand awareness.

    Now that we're beginning our first marketing, the key partners we need have heard our name long enough to trust us.

    Slow progress, but has cost less than 150k aud so far... so no big loss either

    Good article, thanks.

  7. Thanks for your perspective: it also becomes more evident in hindsight that great announcements are often not followed up with — what ultimately matters is not just the "BANG!" of a launch, but the day-to-day interactions with customers and other relevant parties afterwards. People can leave the party, but you'll have to clean up.

  8. Thanks for sharing some great advice.
    I would love to read a similar article that addresses best practices for consultants or solo-preneurs.

  9. I have wrestled with the way that companies use the "beta" designation to create an ostensible reason for a particular date being their "launch", even though the product has been publicly available for months. The press feeds this, in the desire to get first coverage of some product, but I guess it harkens back to other industries like the auto industry, where press junkets were part of the perks of being in the press, to go cover some launch event. I didn't add a "Beta" to my product (although it's certainly a young product, and changing rapidly), because I didn't feel that it was meaningful to the customers. I'd be curious what you think of the use of Beta.

  10. I'm so relieved to read this article because it entirely validates the approach we took with our site. By doing a "soft" product launch first, we were able to quickly identify any remaining bugs before they upset too many users. Now we feel ready to crank up the marketing machine a bit more.

    Great blog BTW, adding this to my favourites.

  11. This is a great post. Thanks for sharing some ideas.

  12. SOme very good adwise. Would have been nice to have this last year when I started my own business.

    Anyhow I have used the soft product launch myself, and this is the best thing to do in most cases.

    A soft launch is a very good test to your business model, and allow you to fix bugs and optimize your products.

  13. Eric, thanks for this post very helpful. Most likely we did several things wrong because we mixed things up. We used social media to get alpha users as outlined here during Feburary.

    Then we devised a way (last year already in June) to get some buzz for our product with printed and online media by offering them a way to publish a ranking of corporate blogs as outlined here:

    Which FT Global 500 and Fortune 500 blogs made the FT ComMetrics Blog Index
    How we found and selected the blogs included on the FT ComMetrics Blog Index

    Finally, we invited users to register and start testing - now before for our beta launch.

    So in-midst of all these things happening around us, I came across your post. I am glad we launched but I am also very curious how it will pan out. Thanks for this insightful post.

  14. great post but why do you use blogspot and not wordpress?

  15. Chris, do you help groups raise money as well? If so, I might have something that can help with more of a grass roots effort1 Or email me at

  16. I wish more folks could read this post. OH>>> they can, since i have an ezine and blog, too.

    Launching with a plan... what a concept! :)

  17. Eric - great article. As we've quietly signed up dozens of paying customers for our software (and kept them), I've faced intense pressure from family, friends, staff, even our attorneys, to just "Launch".

    But we've chosen to go another route, making the product (it's a SaaS) simpler, more powerful, and more reliable using real customer feedback.

    This process has been invaluable. When we're ready to do a PR launch, we will do so with well-known custmers, case studies, and RESULTS.

    Your post just says all the things I've been telling people - but a lot more eloquently. Thanks again.

  18. It is wise to make that distinction between a 'marketing launch' and a 'product launch'.

    The combination of how the two are treated by the startup launching is a big choice to make. I think it comes down to managing risk.

    You may swing for the fences and launch both, and you 'might' hit it big. But by doing so, you are also magnifying the possible repercussions of getting it wrong.

    Strategically, Eric has it right. Depending on where your startup is at, balancing the size and scope of a product launch with that of the marketing launch is a delicate process.

    Thanks for the advice.

  19. This is a great article, and I hope it's read by more than just entrepreneurs -- PR and marketing people really need to get ahold of this sort of viewpoint. It's rare, I think, that PR and marketing people are able to get the picture when it comes to startups (speaking from the perspective of just getting into PR).

  20. Great article. I'm just about starting a software company with a very dedicated team. And your post is very timely. Thanks and if there are further advice you can offer start-ups, i'll follow this blog keenly to uncover them.

  21. Thumbs up from a startup planning the same in a month. I like the separation of intentions: 1-getting it out there, and 2-making sure everyone knows about it.

    Valuable lessons for any business.

  22. We have found every single word of this to be true at Triggit. Thanks for the great post Eric.

  23. This is explained by the Tai Chi principle of "perpetual motion". You don't just throw something out there in an unconscious, silly way. You create an entire framework of understanding and action based on your product/idea that sets it in motion in a self-sustaining way. Launching is about creating circles within circles (groups of people that connect) and social networking, word of mouth, and real-world advertising are all contributing factors. Build a gigantic river of momentum with minimal effort so you don't get burned out. That's how to "launch".

  24. Great article. Good job Eric for putting this together. Thanks for your advice.

  25. Great article.. the most sensible SEM advice I've read - discussed in the context of a real situation. I'm converted - ordered Gary's book as well.

  26. So, here's a question. Are bloggers considered part of the press? Should we avoid having bloggers write about us while we're in the product launch/customer dev phase? How do you do that? Or is it mainly that we don't talk to the press or to bloggers about what we're doing and allow them to talk about us if they want to do so? We're fast approaching our product launch -- a closed preview version of the site and I'm trying to figure out what "marketing launch" actually means.

    Is it 1) a PR campaign where we're actively seeking press or 2) people blogging about us even though we're not talking to them or encouraging them to do so? 3) Or is it both?

    Not that number 2 is likely to happen, but I want to be prepared.

    Thanks for your thoughts.

  27. I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


  28. GReat Post. Thanks for your advice. We follow a similar approach for launching our SaaS application.