Why You Should Charge For Your Beta Product

18 February 2014 by Mathias Meyer

There's a curious assumption out there, and it's time to put that assumption to rest for good.

It's the assumption that things should be free while they're in beta.

That assumption is made on both ends, your customers think it should be free, and you think your product should be free too.

It's bollocks. You're hurting your business by following down this path, and, while they have good intentions, so are your customers.

Free customers don't validate a business, they don't validate a product. Only when customers are willing to open their wallet for your product will you start to have validation that you might be on to something.

Offering a product for free while it's in beta implies the assumption that the product doesn't provide any value while it's in beta. If your product doesn't provide any value while it's in beta, stop what you're working on right now.

You think your product doesn't provide any value while it's in beta, and neither do your customers. At least that's how the assumption goes.

Are you sure that you've verified that there's a market, an audience, for your product that needs this problem solved? Is there more research you can do? Could you talk to one of the folks trying out your product?

If you can be sure that your product provides value, and this is why serving businesses is a much better idea than serving consumers, why are you not charging for it?

Does the label beta keep you from charging money? Remove it.

The sooner you start charging, the sooner two things will happen:

  • You know that your product has value to the customers that are willing to pay you for it.
  • Your business has a much higher likelihood of succeeding. Early validation gives you confidence that it's worth continuing with the product.

When we started out with our product version of Travis CI, we took a few months to develop what we considered to be the minimum features we could ship and throw at potential customers.

We launched our initial private beta in July 2012. We started charging in September 2012. But, and this is where we could've done better, we didn't enforce charging. If people didn't want to sign up, they could continue using the product for free.

Meanwhile, we manually emailed dozens of customers, asking them to sign up for a subscription and for feedback at the same time. This was a long process, and I wish we'd have automated sooner.

But it gave us a chance to see what people liked, what they didn't like. At the end of the manual process we had 100 paying customers. More than enough to validate that we were on to something.

A beta product doesn't make a product, let alone a business, yet.

But when you start charging early, and you find customers paying for it, you have a tiny validation that it's valuable to some. That can be a much more powerful realization and boost than trying to crank out new features to make free users happy.

The best way to validate a product is to get a customer to pay for it, then 10 customers, 100 customers.

Tags: smallbiz
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