Tag Archives: marketing

Start-ups: How to Release New Products

Like all lean startups that also practice agile development, our company makes small releases of the product and website roughly twice a month. With each release, we gather valuable information, reach tentative conclusions, and incorporate what we learn into subsequent releases.

However, every once in a while, the time comes to launch an entirely new version of the product. This blog is about the mechanics and psychology of a major launch.

FearFirst, let me digress for a moment about the role of fear. Early in my life, I thought that the fears I felt (e.g., fear of embarrassment, fear of failure) were character weaknesses. Now I see them as strengths. These fears drive me toward careful planning and fastidious preparation for major events so that neither embarrassment nor failure becomes likely.  With this planning and preparation comes a desire for perfection.

As an entrepreneur, I cannot explicitly look for colleagues who possess a similar “gift of fear,” but the team members that succeed with me do share my attraction to planning, preparation, and perfectionism, regardless of their motivation.

So, how does this all apply to launching a major release of a product? Product releases have dozens of interrelated moving parts. The proper functioning of each part relies on the unique talents of your team. Seamless interconnections between the parts rely on communication between the individuals on your team. And all of the parts and their interrelationships are highly visible. If anything fails, the opportunities for embarrassment and failure are huge. Now you see where planning and preparation, and thus fear, play roles.

Let’s talk about some of the parts, how they interrelate, and how to avoid failure to launch well.


  • Add enough new features so you can seriously claim (from a press release perspective) that this is indeed really a new version of the product
  • Select features based on plenty of customer feedback. To do this, read my article on the art of triage.
  • Make sure you update all your help screens to match your new features
  • Buggy software is a great way to lose all your customers. Thorough testing is a necessity. At Offtoa, we spend 2-3 months doing system testing on a new major release of a product after development has finished with it and before we release it to the general public. Is this overkill? Perhaps. But like I said above, we don’t like to be embarrassed!
  • Use your loyal customers to help with testing. We bring on board such beta customers toward the end of our own system testing. We don’t expect them to find anything wrong, but if they do, any damage is well-contained.


  • Usually, a major new release of the product coincides with refined messaging and new differentiators. So, a newly designed website is almost always in order. Certainly content will need to change.
  • A major new release of the product is also a great time to freshen up the website with a similar look and feel.


  • Since a new product release always implies new differentiators (or else why are you building a new release?), you should be spending considerable effort on a new marketing campaign.
  • As a guideline for software companies, I spend equal resources on marketing and development in preparation for each major new release.
  • Target 1-2 specific vertical markets.
  • Make sure you fully understand the pains of your targeted vertical markets and the messaging that drives home how your product relieves that pain. This is essential to conversion rates and low customer acquisition costs.
  • If you are using Google AdWords (or equivalent) to drive traffic to your website, you’ll need to use all you have learned from earlier campaigns about which search words attract the most qualified leads from of your targeted vertical markets.
  • Make sure you have built customized landing pages for each AdWords campaign to help convert leads into customers. Once again, earlier campaigns should have helped you hone the messaging.
  • Construct and disseminate press releases to appropriate media outlets to help drive both customer traffic and analyst interest.
  • Instrument (e.g., with Google Analytics or equivalent) your website so you understand how leads become customers.

Customer Support

  • Contact your current customers in advance about the new release so they have plenty of warning.
  • Create a transition plan to seamlessly transition your current customers to the new product without any pain felt by them. You need to convert all customer data.

Twenty years ago, software development companies released all new functionality in huge new releases. Today we have learned the value of both minimally viable products (MVP) as well as small incremental releases. However, even with this new knowledge, major new product releases are still necessary on occasion. And these are fraught with risk. Avoid failure to launch well, which hurts the credibility of your company and your product, and consider these tips when you are about to embark on your major release.


Alan DavisDr. Al Davis has published 100+ articles in journals, conferences and trade press, and lectured 2,000+ times in 28 countries. He is the author of 6 books, including the latest, Will Your New Start Up Make Money? He is co-founder and CEO of Offtoa, Inc., an internet company that assists entrepreneurs in crafting their business strategies to optimize financial return for themselves and their investors. Formerly, he was founding member of the board of directors of Requisite, Inc., acquired by Rational Software Corporation in 1997, and subsequently acquired by IBM in 2003; co-founder, chairman and CEO of Omni-Vista, Inc.; and vice president at BTG, Inc., a Virginia-based company that went public in 1995, acquired by Titan in 2001, and subsequently acquired by L-3 Communications in 2003.

If you’d like to learn if your great business idea will make money, take a look at Will Your New Start Up Make Money?

Photograph of Cover

Fear photo is a screen capture from the public domain film ”Carnival of Souls.”

5 Steps to Get & Keep Your Startup on Track

If you plan your startup’s growth appropriately, you can use the identical process to keep your startup on track after you launch.

The ‘Get on Track’ Process:

1. During planning, select values for 7 key drivers of your company’s growth.

Tracka. Customer Acquisition Cost (CAC): For those new customers that you attract as the result of your marketing activities, how much does it cost you per customer?

b. Sales Cycle (SC): How many months transpire between your expenditure of marketing dollars and the acquisition of new customers?

c.  Average Order Size (AOS): How much revenue do you expect to generate each time a customer makes a purchase?

d. Periodicity (P): How often will each customer make a purchase?

e. Retention Rate (RR): What percent of existing customers will remain customers at the end of each year?

f.  Viral Coefficient (VC): How many people will each existing customer attract and successfully convert into new customers? This is a one-time conversion; once a customer refers this many new customers, we assume they no longer refer more new customers.

g. Viral Cycle Length (VCL): How many days will transpire between customers becoming new customers and their referrals becoming new customers?

Note that when planning your company, some of the above (e.g. VC and VCL) will have to be just guesstimates . . . and that’s okay.

However, you should be able to make somewhat more intelligent guesses on CAC and SC based on the type of business and the kind of marketing and sales you expect to conduct. And P and RR values should be much easier to estimate from the beginning based on your business.

2. Before you launch your company, verify that the estimates you’ve selected for the 7 key growth drivers will result in a successful company.  That is, there must be significant revenues and profit, and solid returns for all shareholders to be considered successful. If not, adjust the values until the company becomes successful.

3. Launch your company.

The ‘Stay on Track’ Process:

  1. Every month, compare your actuals to your planned values for the 7 key growth drivers. Enter actual values for CAC, SC, AOS, P, RR, VC, and VCL into your plan.
  2. Verify that the actual values for these 7 key growth drivers still result in a successful company – i.e., significant revenues and profits, and solid returns for all shareholders. If so, you are on track! If not, you must change your strategy.

Change Your Strategy

Based on which key growth driver you want to affect, different strategic changes are in order. Many options exist in every case, but here are just a few ideas:

  • To decrease CAC and SC:  Improve your understanding of the target market. Hone your advertisements to the specific pains of your target markets. Focus on the benefits rather than features of your products.  Offer better pricing or better promotions to increase close rates.
  • To increase AOS:  Offer quantity discounts. Improve your product.
  • To increase P:  Offer frequent buyer programs. Improve your product.
  • To increase RR:  Improve your product’s stickiness.
  • To increase VC and decrease VCL:  Offer referral programs, especially ones that incent both the referrer and the new customer. Make products so exciting that they create a buzz. Add features that increase your product’s value to customers.

As you can see, these seven key growth drivers are not only fundamental to planning your startup, they are also fundamental to keeping your startup on track. Not all are easy to estimate, but you can at least determine in the planning stage what values you must achieve to be a viable company.

Once you launch your company, not all seven are easy to measure, but as you progress, they will become easier. Drive your engine towards success!

Alan DavisDavis is a serial entrepreneur currently in his fifth startup. He is also an angel investor and the author of six books.

“On Track” Photo courtesy of Clare Wilkinson (Creative Commons)

Driving Revenue Growth via Paid Marketing/Sales

As  Eric Ries points out in The Lean Startup [RIE11], only three exist to drive revenue to a company:

  1. Paid. You can spend money with marketing and sales efforts to “buy” customers.
  2. Sticky. You can enhance the customer experience so that current customers purchase more or return more often.
  3. Viral. Current customers can refer others to become customers.

This posting is about the first. My next two posts will about the subsequent two.

Many books and articles exist that teach readers how to improve their ability to sell using a specific sales strategy. The purpose of the current post is to emphasize that a start-up must decide how it will sell products to its market. Here are just a few possibilities:

  • Inside direct salesforce. You hire employees who communicate with poten­tial leads via phone or email and attempt to close a sale from their office. In the case of market-push, salespeople contact potential customers (leads are usually acquired by marketing personnel). In the case of market-pull, poten­tial customers contact the company (as the result of marketing-cre­ated advertising, email broadcasts, or internet presence). The sales model for physical retail stores is generally an example of a market-pull inside direct sales. Telesales is an example of market-push inside direct sales.
  • Outside direct salesforce. You hire employees who meet potential leads (usually acquired by marketing personnel) and attempt to close a sale in person.
  • Sales channels. You retain services of another company (often one that knows the market well) which then distributes/sells your product to end customers. This other company becomes your customer, and, depending on industry, is called a distributor, reseller, channel partner, wholesaler, or integrator. Your arrange­ment with this company could be exclusive (for your product or for a particular target market) or non-exclusive.
  • Internet sales. Many companies, both in business-to-business and business-to-consumer, rely on their websites to sell products and services in the same way that Sears relied on catalogs to sell its products in the early 20th century. In this model, customers find the company’s products via search engines or are drawn to the website via advertising, and execute the purchase over the web without salesperson involvement. Search Engine Optimization (SEO) techniques enable web visitors to easily find your website.
  • Proposals. In some industries, customers make their needs known via issuance of a request for proposal (RFP), and the company responds with a formal proposal containing detailed specifications of products to be delivered along with a price quotation. This is the approach used by almost all government agencies at all levels.

The above extracted from my latest book, Will Your New Start Up Make Money? Buy your copy in Kindle or paperback formats at http://www.amazon.com/Will-Your-Start-Make-Money-ebook/dp/B00JOOZQNE.