Even though an extreme product launch may sound like a new idea, it’s just a name for something already happening on a wide scale. There are many sites which promote selling a product before you have it. Kickstarter for products. LeanPub for books. Enroll.io for courses. Thanks to the take-down of private company funding regulations in the US, there’s even websites for funding businesses which don’t exist yet.

The main business benefit you accrue from an extreme launch is that you truncate your cost of delay to zero. In high growth industries like technology, timing is crucial. Once the technical inputs for a product are easily accessible and affordable for the players in a niche, the first mover will earn the greatest benefit from introducing the product.

By selling to confirm you have a good offer, you do more than confirm your intuition about the offer. You start earning revenues immediately, which is the whole point of creating your business. Granted you will almost certainly sell less, or at least get more refund requests if you don’t have the product yet. But…and this is crucial…you won’t have any cost of delay. Because you start selling earlier, you make it more likely that you’ll grab a greater share of the market. You also discover whether you might be too early potentially. Even though the technology may have matured enough, it’s possible your users aren’t ready to accept a new gadget which solves a specific problem.

It’s basically a cunning ploy on my part to elevate the status of the lowly pre-order. While an extreme launch may be uncomfortable for you, you either build a lot more confidence in your idea based on pre-order sales, or you blow up much earlier so you actually waste less money when learning your product idea is a dud.

Why is delay such an important factor? Just because you can’t see it, doesn’t mean it’s not there. Just like blood pressure.

In the case of a startup, there is a very real opportunity cost of releasing late. You risk making fewer sales if your competition beats you to a market. Even if they have more bugs, they will already be earning cash. In most markets, according to Ries & Trout’s booklet the 22 Immutable Laws of Marketing, there is space for three players in your users’ mind. How many brands of toothpaste can you come up with, without checking a store? More poignantly, do you know who the second person to cross the Atlantic was, without checking Google or Wikipedia? (Hint, it wasn’t Charles Lindberg or Amelia Earhart). You are up against the limits of human perception and memory, at least within your niche.

According to Doug Hall in “Jump Start Your Marketing Brain”, based on his proprietary studies across thousands of product launches:

Having the courage to be the first to market nearly doubles your sales versus being the fourth to market. On average, brands that are second to market generate 71 percent of the sales of the pioneer. Those that are third generate 58 percent, and those that are fourth some 51 percent of the sales of the brand that is first to market.

Most companies simply don’t explicitly take the cost of delay into account, because they think it’s given. It’s obvious. They don’t think about how big it is, usually because it’s hard to estimate.

Moreover, this loss of sales revenues will typically be significantly greater than the cost of accelerating development, to finish the product faster. So for example, getting to market faster with a full blown product may cost more to execute; however, the additional sales you generate will compensate for far more than the additional development costs incurred.

Product development expert Don Reinertsen popularizes the cost of delay as a highly relevant metric when launching new (read:greenfield) products, both in large and small companies. When running in-house training sessions, within most product teams the range of initial cost of delay estimates is about two orders of magnitude. Each time it’s the same company, the same product, the same target market, the same technologies, and the same group of people. Nonetheless, this lack of estimate agreement is consistent across companies. Presumably, no one even bothers bringing it up, so everyone just assumes that everyone else has the same assumptions. And then they can’t figure out why they disagree on how and when to launch the product.

So if you’re an entrepreneur creating a new product, your best bet is to launch immediately. You won’t have any cost of delay. You will start making sales, which implies cash to finance the rest of your business growth.

In a traditional marketing “hard launch”, you build up to a crescendo. The whole market trembles with excitement for the minute your product comes out, pulls out their credit card, and buys. You make 7 figures in one day, synchronously. This is particularly common for something like a highly anticipated event with limited availability of tickets. Often this requires significant planning, operational gymnastics, and making sure all of your ducks are standing in a row.

Hard launches try to take advantage of extra components of Cialdini’s principles of influence by building everything up at once. If there is a lot of buzz on a particular date, this helps with generating social validation for the product. Word of mouth intensifies.

Not A Soft Launch

A soft launch is the opposite. You try to avoid making a big splash all at one moment. Instead, you introduce the product to new people incrementally, to expand your product reach as you are certain you’ve ironed out the technical problems with the product. Soft launches are a good tool if there is a very high level of technical uncertainty, particularly from the founders’ perspective

Instead, you iteratively release and notify groups of prospects, and then work with them to perfect the product. It’s continuous improvement in the sense Toyota and other Japanese manufacturers originally pioneered, just in the context of introducing new products. As you feed customer feedback into the product, you make it increasingly attractive to the next batch of prospects.

Not A Rolling Launch

To some extent you could also compare it to a rolling launch. In this case, the same product is just re-introduced to a completely new set of prospects at a different place and time. So if the initial launch was at a local chamber of commerce meeting, and then the product is shown again to similar prospects at a business breakfast networking group, the new set of prospects will think it’s just being launched now just for them. The fact that the second launch happened later doesn’t really make a difference to that second group.

In most cases, a rolling product launch doesn’t really affect total profits, compared to trying to reach all of the same prospects to launch on one day. So in fact, we put unnecessary scheduling pressure on our team to release products on a specific date. If we stagger release dates, from a marketing point of view it still generates additional value. The added benefit of perceived scarcity of being the very first adopter is limited.

In fact, because the launches are spread out over time, it provides an extremely powerful feedback loop for both the marketing and for the product development team. Customers who buy can be interviewed for greater insight into why they bought, what they find attractive, and how they describe the benefits of the product in their own language.

So what is an Extreme Product Launch, then?

You figure out who you’re targeting. You put up a landing page. And you try every possible approach you can to drive relevant traffic to that landing page. Measure results. Get conversions. And prove who is actually willing to pay for your product and how to reach them. You figure out how much time or money it will cost you to acquire each customer type.

You can do this without a product. All you need is a landing page. And you can get started tomorrow. Details in Launch Tomorrow.