There are a lot of decisions founders and executives need to make when embarking on a software development project. Many of them can be answered with the help of a trusted custom dev partner who takes agency of your project and imparts advice.
Some decisions, however, you’ll need to make yourself. That includes whether you want to prioritize speed or revenue generation when creating a minimum viable version of your application.
Choosing to focus on either time to revenue or time to market will define the development of the first version of your product.
In this article, we’ll shine a light on the differences between time to market and time to revenue, explore their significance in custom software development, and share valuable insights to help you make informed decisions for your project.
By the end, you'll have a framework for deciding which route to take.
What Is Time to Market?
Time to market is the length of time it takes from an idea’s conception until it’s available to end users. When you prioritize time to market in a software development capacity, you focus on getting a barebones minimum viable product into those users’ hands as quickly as possible.
It’s a case of beating the competition, writes Serhat Erdem, growth marketer at UserGuiding. “In our age of consumption and competition, you have to act fast. Everything changes, and people develop products rapidly. These people are also your competitors.”
This is the best approach for founders who are creating something that’s incredibly disruptive or innovative, says Kingsmen Software CEO and partner Bill Clerici. You aren’t focused on making money so much as you are on getting your company’s name out there and generating user feedback.
What Is Time to Revenue?
Time to revenue is the length of time it takes for a software product to start generating revenue. This is a more conservative approach to development than time to market, as it means finding or creating a base of users who are willing to pay for the software.
When you prioritize time to revenue, you focus on building out a core function that works, says Bill Clerici. You can then add additional functionality at a later date.
This approach demonstrates whether there is consumer demand for your product — one of the biggest reasons companies fail, according to Yevgeniy Brikman, cofounder of Gruntwork. “The only way to find that out—the only way to test your assumptions—is to put your product in front of real users as quickly as possible,” he writes.
“And when you do, you will often find that you have to go back to the drawing board. In fact, you’ll have to go back to the drawing board not just once, but over and over again.”
The Approach You Choose Helps Define Your Product
Whether you prioritize time to market or time to revenue will determine how a custom dev shop proceeds, from product discovery to creating your software’s minimum viable product, the basic version of your software that meets the minimum requirements for use and can be adapted in the future.
“Typically, an MVP delivers just enough functionality and value to appeal to early adopters and other innovators,” the team at MessageBird writes. “It’s not a beta version of your product, designed for shaking out bugs or for fine-tuning features and interface elements. It’s also not an idea that exists only on paper (or slides), or a raw demonstration of a proof-of-concept.”
Building an MVP starts with a product discovery session, during which you decide whether you want to prioritize speed or revenue. Doing so can change the specific set of features you build.
For instance, you may want to trade off features to speed up development. This can be a risky move, says TCGen principal and founder John Carter, but it might be necessary if time is of the essence.
“Generally, last minute changes are risky, but if time is the key factor in the success of the project, then trading off on features or quality might be the right decision. You can also look at your competition to examine what features may be more important than others, so you can focus on what makes a difference.”
If driving revenue is more important, you may want to focus on a core set of features that drive the most business value, says Bill Clerici. But you can’t decide without committing to the discovery process first.
In fact, a product discovery session will often dictate the approach you take. When you list out all of the features you want your product to have and the value of those corresponding features, it becomes clear which drives the most value and therefore needs to be prioritized.
Whether It’s Speed or Value, Kingsmen Can Help
While most of our clients prefer to prioritize time to revenue — and it’s what we recommend in the majority of cases — we have plenty of experience creating rapid prototypes that help companies beat their competitors to market.
Start the process of developing your minimum viable product by booking an initial consultation today.
Images used under license from Shutterstock.com.