Why poor planning for your product launch will always come back to bite you. 

How Not to Launch a New Product

I live in a suburban area of the San Francisco Bay Area – close enough to work with most of my technology clients, but far enough away that my home feels removed from the mania that is Silicon Valley. It’s a good balance for me, but one of the drawbacks is that I have terrible internet service. I’m just out of reach of cable / DSL services, but well within wireless LTE connectivity. I use a local satellite provider that gives me fairly mediocre service (that’s another story), so I’m constantly on the lookout for a better option.

In researching alternatives, last week I ran across a company called Karma (http://www.yourkarma.com) that recently launched an unlimited “Neverstop” LTE service with the promise of 5Mbps connectivity and no data caps. “Hooray! My Internet woes have been solved!” was my reaction, and I immediately purchased a device and signed up for the service.

I got the device yesterday, hooked everything up, and immediately ran a speed test. To my dismay, I was capped out at roughly 1.5Mbps, well below the advertised 5Mbps rate. Disappointed but not discouraged, I sent an email to their customer service to see if there was some configuration issue that needed to be adjusted.

Today, I received an email from Karma titled “Help us improve Neverstop” with the following message:

“We launched Neverstop two months ago and the usage has blown our minds.

We couldn’t be more excited about your appetite to be online while on the go. But we were surprised to learn how many of you are also using it heavily at home.

…So, to make sure that Neverstop continues to work seamlessly for as many people as possible, we have to make some changes to the service. We began running tests to optimize the service, including lowering speeds. Our engineers are working hard to find the right balance of always accessible worry-free internet, at a fair price, so you’ll likely see speeds change over the next few days while we try to fine-tune that balance.”

As a customer, I’m clearly upset with what feels like a bait-and-switch offering, but as a consultant who makes my living advising companies on how to grow their businesses, it’s a classic case of poor product planning. While it’s a perfectly sound strategy to launch a service and get important information on how people plan to use it, you have to do it in a controlled, predictable way. With the Neverstop launch, Karma has now potentially alienated a large section of its potential customer base.

How could Karma have avoided this mess?

• Market research. When launching a new product or even expanding your existing portfolio, it’s important to understand your target market and competitive landscape. Wireless companies have long done away with unlimited data plans because they aren’t profitable. People are hungry for bandwidth, and that appetite is only increasing. While it may not have been obvious that home users were a potential market, and Satellite providers were a potential competitor, a little investigation can turn up these crucial details.
• Customer feedback. Karma has (I’m assuming) a stable customer base, and actively engaging those customers to discuss potential new offerings can yield a wealth of valuable data. Asking existing customers who were paying $14 per GB of data how they might use an unlimited service would pretty quickly reveal that there’s a tremendous appetite for unlimited LTE data to stream movies, play video games, etc., even if it’s capped at 5Mbps. That would have allowed Karma to fine tune the product and economics of the service before launch.
• Launch a beta. Sometimes customers say one thing, but do another. If you’re unsure how your new product is going to be received and used, try it out with some customers. But for heaven’s sake, not all of them at once! A controlled offering to select users will give you the insights you need without alienating existing (and potentially future) customers with a botched launch.

There are other options as well, but you get the picture. A well-planned launch can mean the difference between a young company’s continued success, and complete disaster.

Ultimately, Karma is (re-)breaking ground here with unlimited wireless service, and 20/20 hindsight makes it easy to criticize. Having said that, speaking from a customer’s perspective I’m going to steer clear of them for the near future. Speaking from a consultant’s perspective, it reinforces why partnering with an organization that has deep experience in these types of activities can really mean the difference between success and failure.

Happy surfing!

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