Release an internet product early but with a few known bugs? Or wait until the product is perfect? When is the right time in the development lifecycle to release the product?
There are many approaches to these questions. Since we know that We’ll never get our product right the first time and we know how to prioritize requirements, the decision on when to launch a product seems to be very simple. Considering that the product has the optimal selection of requirements, i.e., minimal set of requirements that will actually bring a solution to customersâ€™ problems, the earlier we launch it, the better. However, there are other factors to take into consideration, and I’d like to talk about one specific factor, the cost of development vs. the cost of operations.
I believe that the concepts of one-time revenue and recurring revenues are clear and it is easy to understand that recurring revenues are normally better than one-time revenues. It depends on the amount of each type of revenue. For example, from month six onward, $10 recurring monthly revenue is better than one-time $50 revenue. Like the concept of one-time and recurring revenues, there is the concept of one-time and recurring cost. Talking about cost, we see an inverted logic. One-time cost is normally better than recurring cost. It’s better to pay one-time $50 than six or more $10 monthly installments. I’m not considering interest rates and other financial aspects, since they would not contribute to the discussion. And I’m not a finance person. 🙂
We can consider the development cost as a one-time cost, and the operational cost a recurring cost. Releasing an internet product early can be good to gain market and earn revenue quickly but if the internet product has many points that can generate operational costs such as customer calls, customer support, bug fixing, re-work, the recurring operational cost may be so high that it doesn’t compensate for the earlier recurring revenue. On the other hand, perfecting the product in order that it doesn’t have any avoidable recurring operational cost may demand so much time that it doesn’t compensate the loss of recurring revenue.
So in addition to everything you should consider when deciding when your product is ready for launch include some thoughts on your development cost vs. your operational cost. It may pay some good dividends to spend more on one-time development cost to reduce recurring operational costs.