Product launch · Sales

How to sell MVP during beta phase?

Martin Scott ► ► CyberSecurity Consulting

May 24th, 2015

I’m creating a SAAS product and its  developed enough where I want to expand testing with real customers. How do I sell myself to companies so I can test and tune my product? My first thought is  to  offer my product for free while the bugs get worked out.  What would be some ways I could word this?


Thanks.

Pierre Lebrun Helping software entrepreneurs break into the software business

May 24th, 2015

If you're selling a B2B product, I don't recommend free. Profitable businesses don't care that much about free. Free is what consumers want. If the problem you're solving is real and painful for businesses, you should sell your beta with the disclosure that it's a beta, and that as such you promise to actively support them in any way possible and that they will have input into how the product is developed.

That way, you'll be able to A) validate whether or not your the pain point you are solving is worth paying for for those businesses and B) work closely with committed customers on product development.

Karl Schulmeisters Founder ExStreamVR

May 25th, 2015

Martin - how did you validate the features in your MVP?  which companies or contacts did you go to?

I'd go back to them and engage them with the message that

  • as a beta partner they will get to influence the final product
  • as a beta partner they will receive some sort of tangible value during and immediately after the Beta phase that offsets their cost of participating in the Beta

John Petrone CTO at LaunchPad Central

May 24th, 2015

I would not offer your product for free - it's always tempting early on but you are establishing a value of $0 with your first customers. This has a couple of negative impacts:

1) Harder to upsell from $0 unless you add functionality (sometimes significantly)
2) Easier for the customer to forget to use it - that fact that as a customer they are paying $ every month is an incentive to make certain they try it. Free is easy to ignore every month because you have not wasted any money.
3) Provides you no pricing feedback (how much can I charge for this?) which is a critical need early on.

I'd suggest starting with either what you need to make per customer per month to make it real business (cost based pricing) or on how much your customer will save or gain in value from using it (value based pricing). From there, by all means start with some discounts or a free month to start to get them going, but establish a price right at the start.

Christopher Brunner Founder - Payments

May 24th, 2015

No Free. 
Waive whatever you need to waive to get a series of committed beta partners. You can and should dangle benefits to them for going through this process with you and your team.
In the end, your leverage is only as strong as the problem you solve.

B2B is less about free and more about bringing real world solutions to the table. If you're able to solve a problem, figuring out what to charge your beta partners is the easy part.

Chris



Logan Kleier

May 24th, 2015

No Free.

A free trial period maybe, but you need to establish a price for your service and get them to commit to paying that price. 

Everything changes when things cost money. Lots of people are willing to trying something for free, but if you put a fee on  your service, then you find out if you really have a business. 

Dimitry Rotstein Founder at Miranor

May 25th, 2015

The question is generic, so the answer will be generic too :-)
The key is to find the suitable early adopters - those who have a real pain that your product can solve. The thing about early adopters is that they will gladly pay for so much as a promise of a solution, and they won't care much about bugs or design. More importantly, they will provide a valuable feedback, while the majority of customers won't bother.
The question is where to find early adopters, but that depends on the actual product. Anyway, you should be able to answer that question in great detail even before you start implementing the solution. In fact, that's one of the key boxes of the Lean Canvas.

David Telleen-Lawton Using Customer Discovery to mold innovative Master of Technology Management degree

May 26th, 2015

Karl's questions are the ones I would ask...

They also highlight the advantages of validating with prospective customers all along.  This is one great reason you do it so that you have a list of potential beta customers who have already told you how they would evaluate the pricing, etc. 

I suspect you may have done this...Bravo!

You should also then add a few more "cold" ones...those that have a similar problem to those that are willing to be Beta customers...this will test out what your sales folks might see with a new prospective customer (in contrast to the pipeline you've been developing as you developed the product).

And of course I agree with all of the others...the price should NEVER be $0.  You can have a free trial, a money-back guarantee, a discounted price or extended initial term, etc....but if they are not willing to pay for it, why both with them...and if the "free" people are the only ones you can find to try it, perhaps you do not have a business opportunity worth pursuing.

...or perhaps you are in an very unusual situation, and you can justify "free" for some very unique reason...better be a real good reason!!!

Andrew Lockley

May 26th, 2015

Strongly disagree. Engagement matters, and freemium users often convert to paid eg Dropbox

Rob G

May 26th, 2015

if consumer or SMB then free / freemium is something to consider, but if your prospect is medium to enterprise in scale then don't do free - it just doesn't matter to them.  Risk, liability, time to implement, training, distraction are their issues.  Focus on their needs. If your solution generates more revenue for them they will pay attention. Cost savings is of less interest, but also a viable focal point for you.   Find prospects with big pain you can solve and charge them an appropriate fee on a schedule that requires their commitment and moderates their risk. without knowing what you are selling and to whom it is difficult to be more specific.  Presumably you talked to a large (enough) number of these prospects before you started building your MVP. As Karl said, go back to these companies, get them on board and as part of the agreement get them to be a reference site and recommend additional prospects. 

Jean Paul Lead Developer at PHPDevelopers.net

March 4th, 2016

Test.

Try free, paid, freemium, whatever.

Remember, you are building a customer base and an audience, so there are many opportunities for you to make money.