Growing strategies: starting free and small, or going all in?


3

I was just reading a thread which I cannot find again, and it brought up a question.

People were advising this guy not to develop his idea 100% perfectly, but to start small, and make it free, and to add the most valuable parts later in the game.

I have one product (service, really), which does not exist, and could be valuable to people. My plan was to launch the site with this product, and then add other existing items which already exist, and are in the same sphere as my product.

However, from the other thread, it almost seems like people were saying to do the opposite, start with the existing stuff already, THEN add the main/special product.

Thoughts/experiences?

Strategy Growth

asked Mar 25 '11 at 04:37
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Aslyesnow
214 points

4 Answers


3

There's not much point - in my opinion at least - prioritising low-value possibilities over high-value ones, if the effort's similar. It costs more to market test commodity services.

There is a genuine choice, though, in the matter of whether you start free, to try and build scale and experience; or whether you start by charging, to test whether your value is something people will pay for. The traditional answer, that this is a decision post-beta, doesn't wash.

The default is to charge from the outset, if you ever intend to charge directly. The learning from getting those first paying customers on board is immense, and it will give you a meaningful basis for planning (and, perhaps, accessing funding for) profitable growth.

There are exceptions to the rule, of course. If you think your service is one of them, test that out thoroughly with as many informed people as you can, listen carefully to the arguments, document your responses, and run those past trusted friends.

answered Mar 25 '11 at 05:33
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Jeremy Parsons
5,187 points
  • +1 It is often a lot more contensious to make what was once free into something thats not free (no matter how nominal) than it is to simply raise an existing price from a penetration (introductory) price to a normal market rate. – Justin C 8 years ago

3

Probably the biggest problem most startups have is getting exposure for their product. Often times they think they just need to put something on the internet and the buyers/users will come and nothing could be further from the truth.

It is sometimes better to do a partial development and get some initial feedback from the market and see if there truly is interest in the product. If there is, then it's worth investing more money to finish everything up; if not, then your losses should be significantly less than were you to go all the way to the end, finish it up and find that the market isn't responding.

It's a balancing act of figuring out how much you need to develop to be able to gauge consumer demand for the product so if you can develop something without a lot of out of pocket expenses then go ahead and develop but if it's something that is intensive and costly, best to stick your toe in the water and see how the water is before committing completely.

Better to find out something isn't going to work for a little money than have all your hopes set on something that ultimately isn't going to see the light of day in the market.

Another thing to consider is that if you develop a product through to the end and discover that it needs to be changed, then it will be more expense to make changes. On the other hand, a slow and partial development can yield great insights into the market and allow you the opportunity to "pivot" and change gears. The allows you to finalize the development more to what the market will bear.

In my opinion, you never develop all the way to the end because the consumer hasn't yet weighed in on whether the product is what it ultimately needs to be to yield the greatest success.

answered Mar 25 '11 at 12:57
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Arlene Battishill
56 points

1

IMHO - Start small but not free if you want to grow this into a product you can support yourself/company through sales.

If you want to build something and support through outside investment or use it to springboard your career as a consultant/expert than give it away.

Define your goals and the paths seem to make more sense.

answered Mar 25 '11 at 22:25
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Jeff O
6,169 points

0

My philosophy is that if it has value then it has a price (conversely, if is has no value then I'm not going to develop it). A company cannot survive on free products/services alone. There will always be a chorus of people who will tell you it should be free because they like free things. But if you want to pay your bills then you need to find a product/service that people will pay for, then find those people and get a message to them.

answered Mar 25 '11 at 10:04
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James
1,231 points

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