You've had the break through idea and have sorted out your business plan. If your business involves a new product or service there will probably be a section in your business plan marked “Product Development.” This is the phase where you've got a prototype or a beta service and you want to refine it, make it a little more slick and add a couple more features. But beware.

Mollycoddling, obsessive reworking and poor timing can turn promising new business start-ups into projects that drag on and somehow never quite get off the ground. But choosing the right time to let go and launch your new product or service is easier said than done.

According startup guru Jerry Kaplan, launching a product can be compared to having children. Just how much do you protect your child before you let it out into the world? It's possible to become too precious with the thing you've spent so much time and energy (and money) on.

If you're targeting a niche market it would definitely pay to launch sooner rather than later. There is a staggering precedent for those products that are first to market. In marketing terms it's called the law of leadership and often leads to the brand name becoming the generic term. Xerox and Coca Cola are classic examples and have even become verbs!

Releasing early is an advantage that online businesses have that most brick-and-mortar businesses don't. A physical product launch is a product launch. Yes, there are focus groups but once you hit the ground and go public, it's hard to get it back. On the web, if the product has a solid enough core then it can stand by itself.

Ideally, the product development should continue after you've launched. Working with your community of users / customers, and letting them set the tone for the discussion means that they can help develop your product if you listen to them.

Action Steps
The best contacts and resources to help you get it done

Release Early If Possible

Releasing early is better than releasing late. Being the first to market is an incredible advantage to have if you can capitalize on it. This doesn't mean releasing a product that isn't up to scratch as far as programming goes. It needs to be solid and it needs to be adaptable.

I recommend: Reading the book The 22 Immutable Laws of Marketing, OR checking out the Wikipedia entry for the chapter headings if you're short on time!

Commercialize Quickly

Getting the product out early also means monetizing and commercializing more quickly. The problem with a lot of startups is that they focus on development and then pitch to Venture Capitalists or other investors. If you can make a product profitable earlier then a lot of the strain of developing can be reduced.

I recommend: Thinking about alternative forms of capital. If you can work from your savings or another fund it means that you don't have to rely so much on outside sources.

Listen to and Trust your Users

The pressure of developing can be reduced even further if you trust your users. At the end of the day these are the most important people to your start-up. They are the ones using it so it makes sense that they will have the best idea on how to improve it. That said, be flexible but don't be flakey. Trying to meet every single demand is impossible, caving in to every request will leave you floundering without direction.

I recommend: Setting up a users / members forum and trusting the wisdom of the crowds, especially if they are your customers. This article on crowdsourcing is excellent.

Know your industry

Having an absolutely rock solid knowledge of your industry is vital. To take on board opinions from external sources it helps if you know the background and the best practice.

I recommend: Gaining experience in the industry that you are going to launch in. Personal problems are always the easiest to solve because you understand them. You can do this by volunteering or doing old fashioned research, read a book, read trade magazines, or industry blogs. Use Google Blog Search to find relevant information.

Don't overextend

As the noise around you increases returning to the original problem, and your original business plan becomes more important. Don't overextend yourself. And even as new ideas come rolling in it's important to implement them on a time scale that was realistic and use your members to gauge which features they want first.

I recommend: Sticking with what you know in the beginning, there will always be time to diversify or expand later.