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Microtesting: Sell it before you build it

Before you build a product, test it by offering it for sale on your website.

  • If no one responds, you’ve just saved tons of time and money.
  • If the responses include suggestions, you’ve just improved the product before you even started.
  • If people give you money — bingo!

This sort of testing is faster, cheaper, and more informative than any generic study or focus group.

From Inc. Magazine:

Consider the method used by TPGTEX Label Solutions, a Houston-based software company that specializes in bar codes and labels for manufacturers and chemical companies. Like many companies, TPGTEX rolls out new products several times a year. But instead of spending the time and money to develop products on spec, TPGTEX creates mocked-up webpages that list the features of a potential new product — such as a system for making radio-frequency identification, or RFID, labels — along with its price. Then, the company spends no more than a few hundred dollars marketing the product through search engines and to the contacts in its sales database and LinkedIn. It isn’t until a customer actually clicks or calls to place an order that TPGTEX’s developers will build the software. “We do not develop a product until we get a paying customer,” says Orit Pennington, who co-founded the six-employee company with her husband in 2002. Development time is typically no more than two to three weeks, and it generally takes just a few orders to cover development costs. (full article here)

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Comments

  1. Wayne November 20, 2009 at 9:28 am #

    Wow. Intentional vaporware? And it’s being encouraged?

    Remind me never to do business with TPGTEX!

    Seriously, if I was that first customer and found out after the fact the software I ordered never really existed except as an idea before I placed my order, I’d be really upset about it.

    For one thing, if I order software that doesn’t already exist, then I would be far more open with things like, “And it would be even better if it could do this…” After all, the initial buildout is the easiest time to include features. To go through that programming phase specifically for my order without telling me about it deprives me of that opportunity to contribute.

    Aside from that, I’ve always had ethical issues with vaporware. And this is even worse. Vaporware usually takes the form of, “Someday we’ll have ‘x’. Isn’t that wonderful? Wouldn’t you like to prepare by buying our stuff today so you’re ready for ‘x’ then?” Or even, “We don’t have ‘x’ quite yet, but we’re accepting pre-orders.” But this isn’t like that. This is, “Hey look at this awesome software you can buy today! It’s sitting right here on our shelf, but it may take a couple weeks for us to deliver it to you – but that’s just delivery time, y’know?” quickly followed by, “Alright programmers – we got an order! Time to start typing!”

    Not like.

  2. Nick S. November 24, 2009 at 12:22 pm #

    I agree with Wayne in principle. This is a slippery slope, for sure. It may work in some industries in which products can be turned around quickly as soon as an order comes in. However, I used to work for a textbook publisher that would do this for small, customized orders and the quality of textbooks significantly suffered under this business model and I always hated to be a part of the process.

    I think that any sort of sale in this manner must include a disclaimer upfront that lets customers know that the product has not yet been finalized. A lot of people will be excited to be the first to try the product, but not many people are pleasantly surprised to find out after the fact that they were the guinea pigs.

  3. John November 27, 2009 at 8:43 am #

    Right, there’s a fine line when you don’t disclose the experiment to the participants. Not many people would be happy I guess.

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