You’re ready to launch your new online service. You’ve spent months
building it, and months testing it. The moment of truth awaits.

The who, what, when, where, why, how of your launch can have a huge
impact on whether or not the market greets your new service with open

Many companies, particularly on the consumer internet, opt to launch with a closed beta. Take for instance, RockMelt, the social browser that has been receiving plenty of coverage from not only the tech media, but the mainstream media as well. The media attention RockMelt is receiving is the sort of coverage that most new companies would kill for. But in my opinion RockMelt isn’t maximizing its returns from that attention precisely because it has launched in a closed beta, and apparently won’t be fully available to the public until next year.

While there may be a time and a place for closed beta launches, I believe they are usually few and far between. Here are five reasons why.

One in the hand is worth two in the bush

One way companies try to capture ‘leads’ with a closed beta is the infamous ‘request an invite’ form. But how do they really convert? Hint: in most cases, the number of people who will provide you with their contact information in hopes that you’ll send an invite is less than the number of people who would have otherwise actually signed up to try your service right then and there. And the number who sign up who actually follow through once you reach out to them is typically even lower.

The bottom line is that if you’re lucky enough to launch with a big bang press-wise, the opportunity to acquire users in large numbers should be seized without hesitation. Take every user registration you can get, and hope you’re right about the strength of your offering.

Consumers lose interest quickly

A big reason for seizing that opportunity: your service may be really interesting, but it’s almost certainly not interesting enough to keep consumers interested indefinitely.

Consumer ADHD is prevalent. What that means: if you launch in a closed beta and I have to wait even a few weeks to get a look at what you have to offer, there’s a very good chance I’ll be less interested (or completely disinterested) when you come back to me. In other words, keep me on ice for too long, and I’ll grow cold to you.

Closed betas often serve little real purpose

There’s nothing inherently wrong with a closed beta. In fact, it’s usually a good idea to have your new service tested by more than a handful of people before you go public. But launching in a closed beta is an entirely different matter. By the time you are ready to go public and tell your story to anyone who will listen, you should be fairly confident that you’ve got something ready for public consumption (eg. something that’s half decent as a commercial offering).

Small, closed alphas and betas should be used for QA, feedback and refinement. Public launches should be used for user acquisition.

You can’t win when it comes to scaling

One justification for closed betas is that they help young companies avoid being crushed by overwhelming demand early on. After all, success can kill a young company; if you launch and you can’t cope with the demand, you’re in trouble.

But even when scaling is a matter of genuine concern, the reality is that scaling is almost always about more than just servers and pipes; it’s about how well built your application is. If you haven’t built a scalable application, you’re going to have problems at some point, and the more you try to build on a bad foundation, the more trouble you’ll find yourself in.

From this perspective, nothing can save you if your application won’t scale. And if you do happen to have a scalable application but don’t have the servers and pipes to meet anticipated demand, you should rethink your go-to-market strategy.

Invites do not magically create more demand

On paper, launching in a closed beta seems like a great way to make your product look more popular than it might otherwise. After all, if Service X launches to much fan fare and you need an invite to sign up, it reinforces the perception that Service X is a hot commodity for which demand far outstrips supply.

But let’s be honest: most services are not going to attract the type of invite hype of, say, Gmail. As such, using invites as a marketing tactic is usually a foolish move.