pre-sale
Also called: presale, prepayment, prepay, pre-order
Selling a product before it is built: the customer pays now, the product starts on a stated date, and the money is returned in full if it does not. The strongest test of a solution, because it costs the customer something real.
A pre-sale is selling a product before it's built: the customer pays now, the product starts on a stated date, and the money is refunded in full if it doesn't. It's the strongest early test of a product idea, because a payment costs the customer something real, unlike a compliment, a sign-up or "call me when it's ready".
A pre-sale works best when three things are fixed in advance. The offer: what exactly the customer gets, at what price, from which date, and the refund promise. The rule: how many prepayments, out of how many people asked, by what date, would justify building (and what you'll do if you get fewer). And the handling of the money: until the launch date passes, it isn't really yours, so keep it aside.
Pre-sales tell you more than whether to build. The people who pay become your first customers and your closest design partners. The ones who hesitate tell you what's missing; the ones who say no tell you who isn't your audience. For a bootstrapped product a pre-sale also brings cash before the first line of code, and offering a yearly plan in the pre-sale makes that amount much larger.
Example
Before writing code, GarageDesk puts up a one-page site: "reserve the launch", 3 months for 1,800 UAH or a year for 6,000 UAH, start in March, full refund if it's not live by 1 April. The founders' rule: build if at least 3 of the 12 shops they ask prepay by the end of January.
Five shops prepay: three take three months and two take the year, 3 × 1,800 + 2 × 6,000 = 17,400 UAH. Four say "call us when it's ready" and three say no. Five is above the bar of three, so building starts on 1 February, and the 17,400 UAH stays untouched until the product is live.
Common mistakes
- Counting "interested" as a sale. Only payments count; "call me later" is a polite no until proven otherwise.
- No rule written in advance. Decide the threshold before asking, or you'll move the bar to fit the result.
- Spending the prepayments. They may have to be refunded; keep them aside until launch.
- Discounting to get a yes. Give the discount through a yearly plan, not through haggling.