These are questions which many entrepreneurs must consider in the creation of a business. The answer to each is related to the initial motivation for starting the effort.
The decision regarding product introduction depends on the characteristics and economics of the particular situation. Is the product unique or only better than current alternatives? Will the product, in its present stage of development, cause harm to the customer if it is used and does not perform as anticipated and promoted? Is it likely that the experiences of different customers will differ, due to their circumstances and level of product need? Does the company have the resources to delay marketing the product? How long will it take and what must be done to improve the product? Has there been a testing of the product by others than those who are directly involved in its creation? Are prospective customers aware of the claimed benefits of the product and have they expressed interest?
Answers to these and other questions will allow the owners of the business to determine whether the decisions of the managers are in the best interests of the company. If the owners of the business are acting as the managers, then independent advice might be of benefit. Those involved in product creation are usually anxious to get their product into the hands of customers so that they can benefit from both hoped for approval and customer feedback.
It is generally believed that products will be improved with the passage of time and from studying customer reactions to the product. It’s also a matter of reinvesting the money from the introductory sale of the product to finance subsequent product improvements. The policy of delaying the introduction of products to when they are nearly perfect is a luxury few early-stage companies can afford.
Therefore, I suggest that products should be introduced when there is a realistic belief that they will generally provide customer benefit, even if all the customers will not yet receive the level of benefit believed by the company to be achievable.
When to “call it quits” is a question that many, if not most, creative people must face multiple times in their careers. It is easy for some to observe that failure is an aspect of learning, but painful when the opening of correspondence or answering of ringing phones is feared to be more bad news. When success is being experienced, one looks forward to communications, and when there are unpaid bills, those trying to make contact are likely to be threatening.
Failure can also be caused by an imbalance of the resources required to continue an effort and the resources which are available. Not having the funds necessary for continuation of an activity may simply mean that the idea or objective of the effort is too early for the market. Persistence is a virtue if the project succeeds. However, I believe that for most people it is better for them to find an exit from disappointment and fear when the negatives outweigh the realistic positives. The conservation of assets permits the involvement in subsequent opportunities.
Many of our most successful tycoons failed in some of their earlier enterprises.
Arthur Lipper, Chairman arthurlipper@gmail.com
British Far East Holdings Ltd.