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?