There’s a trend going around implying that you should launch something to every possible customer immediately, in order to maximize the number of users to your service. I saw it again today in a comment on Hacker News. This is backwards: the opportunity to focus on a single geographic region to prove the concept is invaluable!
A few years back, while an undergrad at UChicago, I took a class through the GSB entitled Commercializing Innovation.
The course focused on the VC/entrepreneur relationship. It taught how, as a VC, to recognize when to invest. With that perspective, it also taught how, as an entrepreneur, to present your company to a VC. The professor, Scott Meadow, is a well-respected venture capitalist and an amazing teacher (a rare combination). It was a case-based class, with each case being one Meadow saw at some point throughout his career. Every class a team would do research and make a decision about whether or not to invest in the company, and then Meadow would explain whether or not he invested and why or why not.
One of the themes that was taught throughout every case was taking the time to test the idea on a small scale before a wider rollout. Often times, this meant geographically. For things like healthcare (think nursing homes, retirement communities, etc), or retailing (CompUSA, Staples), it’s trivial to open a single store. Then you can measure the results with a lower burn rate and determine how quickly you’d like to roll out to the rest of the country or world (or not).
In the web application world, it’s easy to think about it in terms of “deploy once, let everyone use it,” but we shouldn’t forget the value of testing the concept. Remember that this sort of testing need not be restricted to geographic region. For example, if I were creating a CRM app, I could target it to insurance agencies first, in order to get feedback and metrics. Upon success, I could roll it out to other industries.
In the Hacker News comment above, it’d be perfectly reasonable to roll out a mass transit app to just one city, perfect the concept/UI/etc, and then roll it out further. The cost to get the product to market will be substantially less, and the metrics will be invaluable.
