business-planSo I am in the process of starting a hosting company and am a little bit confused about this one.
I have watched a hosting company introduce a feature after they gained a couple of really loyal clients. About an hour after they made that feature available, a lot of their customers had a ‘WOW’ moment, and they were all incredibly happy. I noticed that after I got a VPS at them and I asked people for feedback on Twitter, they said ‘buy it because you’re not gonna get a better VPS’. I noticed that I asked the exact same question before, and people didn’t really react. It’s obvious they were really excited for that new feature and that definitely made a lot of their clients stay and recommend it to friends/family and other people.
Now I have a killer feature like this as well. Our website is not completely finished yet, so it’s up to me if I’m going to introduce this killer feature right now or wait till we have gained some loyal clients. For the record, I am talking about an absolutely killer feature here: you’d spend quite a lot of time looking for a company that offers the same!
So, it comes down to: is it better to wait with introducing a killer feature?
I agree with Matiss' answer, so if you have enough features to get customers fast, you could hold your killer feature back for some time. But I'd like to add a few things.
As with every company, you need to do something your competitors don't do, or need to do something better than your competitors to gain customers. And, of course, your customers should need, or better want this something.
In his lecture in the YC Startup class (Video), Peter Thiel says
My sort of crazy, somewhat arbitrary rule of thumb is you want to have a technology that's an order of magnitude better than the next best thing. So Amazon had over ten times as many books, it may not have been that high tech, but you figure oh well it can sell ten times as many books and be more efficient along the way. In the case of PayPal, Bill Turner was using checks to send money on Ebay, it took seven to ten days to clear, and PayPal could do it more than ten times as fast. You want to have some sort of very powerful improvement, some order of magnitude improvement, on some key dimension. Of course, if you just come with something totally new, it's just like an infinite improvement.
(Text source: Transcript, emphasis mine)
Maybe this is not directly applicable to a hosting company, but the key point here is that ideally you want to have a dramatic improvement on some key dimension. Maybe you have enough improvement on your product compared to your competitors to get customers. Then you could wait for some time to get the described wow-effect.
But if without that killer feature, your product is more or less the same as established products, your killer feature might as well bring you to the point of having the dramatic improvement. Especially in hosting, if you don't do anything better, maybe even have a weaker infrastructure because you're just starting, why should I (as a customer) prefer you over the big ones?
If you have other means of acquiring a customer base without this feature at initial stage, you can postpone the release of “killer feature” to later stages. This can help you to leverage a peer advertising when your customers actually become part of your marketing effort.
However, do not hold it back for too long. Just long enough.
If you’re not quite comfortable introducing this killer feature right off the bat you could go the “stealthy way”. Build your killer feature but don’t make it available to the public. Instead pick a few customers, tell them them that your introducing this new feature and ask them if they would like to try it out.
This way you’d gain some really loyal customers and your competitors will not know about your “killer feature”. You could grow like this for a long time before anyone realizes what you’re offering and have a good market share when they do.
If you’re really worried about your killer feature leaking, you can even tell your customers that you’re doing this off the radar and you wish they don’t disclose any information about this elsewhere. Or you can even enforce this with your terms of agreement.
I’m not sure if this would be a solution to your problem, but I see no other reason to hold off your killer feature other than that others already in the market can quickly copy you and render your advantage useless.
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