Sell Software or Do More Engineering First

Recently I was talking to a software company that had a few non-paying beta users and a working product. After getting a demo of the software, which looked really good, I asked what was next and how their round of financing was going to be used. Interestingly, even with a solid, fully-functional product, the vast majority of the funding was going to more product R&D.

As an entrepreneur, the product is never finished and there’s a tendency to keep adding more and more features. With a ready-to-sell product, even if it has a few rough edges, my recommendation is to start seriously selling it. Here are a few questions to ask internally:

  • Why aren’t we already selling the product?
  • If we add these desired features, how is that better for our short-term cash flow compared to selling the product now?
  • How much of wanting to do more R&D is the desire to build a perfect product vs a desire to build a minimum respectable product?
  • If we never added another feature to the product, and only fixed bugs, could we build a viable business?

Entrepreneurs like to build more than to sell. Resist the temptation to keep building and instead start selling.

What else? What are your thoughts on selling software or doing more engineering first?

5 thoughts on “Sell Software or Do More Engineering First

  1. “A good plan executed with ferocity today, is better than a perfect plan carried out 2 weeks from now. ” – George Patton.

    Entrepreneur should ask themselves, “Am I working this hard and taking all this risk to build a cool product that I love? Or is this a business enterprise that I need to make a living on?”

    Best to get selling.

  2. I totally get the mantra to ‘sell sell sell.’ After all, revenue is oxygen.

    The argument I find against this mentality, however, comes from a more purist perspective of branding / positioning and the overall company reputation.

    Part of being a ‘premium’ brand, whether it’s a beverage or software company, is by only launching real products that aren’t half-baked or BETA. For example, Apple doesn’t launch BETA (err, Siri kinda fit that mold but they received backlash as a result).

    I see growth and iteration in 2 forms, either top-down (brand excellence, perfect the product before release) or bottom-up (grass-roots, part of the experience being the iteration process). So it’s really up to any particular company which strategy they prefer, not so much a black/white issue on sell first, improve later. Would that would for Coca-Cola to change a recipe every couple years?

  3. To further clarify in regards to the software space, I’d revise the “sell sell sell” to simply “release release release.”

    Product-focused developers should get their product released*, sure, but not necessarily for a price. Just go free. This provides the same benefits of user feedback and some proof of concept without the added variables of consumer psychology, pricing, etc etc.

  4. David – How much time did you spend developing Pardot v1.0 software before you focused on selling? Or did you get customer orders and then develop the software?

    1. We started selling when our software did “less than nothing” in the words of our head of sales. We started on the product in 5/1/2007 and charged our first customer around 12/1/2006. Pardot originally didn’t do email marketing if you can believe it.

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