They could enlist friends, friends of friends, family, contacts, anyone they could think of to be beta testers. From that group they would hope to convert some testers to paying customers. Meanwhile, they would use every possible cheap and cheerful new media and viral marketing trick in the book to get the word out and find some new paying customers. That's of course assuming they didn't offer a Freemium option (which presents a whole new set of challenges; a discussion for another time however).
In any case, growth is typically organic, the plan isn't always obvious, and when it comes to getting angel investment to extend the available runway, or Series A funding to sustain growth, the overall value of the organisation is much lower than it might be and thus the founders end up giving away much more than they should.
This approach does tick some of the right boxes:
- It creates a real product very quickly at minimal cost
- If there are paying customers, it demonstrates that there is some level of demand
- Paying customers generate revenues, which investors like to see
Then again:
- The problem and pain that the product was designed to address were based on anecdote rather than data from market research and talking to customers
- When the founders began to build it, they had no idea anyone would want it
- The proposition grew organically and likely sporadically rather than evolving into a well-formed concept that would survive scrutiny by potential investors
Being in a position to take this approach is predicated on either i) enough money to sustain the development through to the first paying customers, or ii) having a skilled development team that costs the organisation nothing.
If neither of those apply to you, then commercialising the concept is the right (and possibly only) option available. And the topic for my next post. Thanks for reading.
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