I'm a big fan of transparency. One of my favorite companies, Buffer, is completely transparent with compensation which is amazing. And there's ConvertKit who share their revenue numbers. And then there's MakerBot who shared their 3d printer designs. Until they didn't.
At first glance you might assume it was all about money. A company got too big and they threw out their ethics to please stock holders. But that's actually not what happened.
At MakerBot they shared everything. Every new piece of data went onto GitHub or some other platform built for sharing open source projects. And all of this helped MakerBot build an amazing brand with loyal followers.
One of their competitors even used their open source designs to create the exact same 3d printer but for less money. And they failed. There wasn't a community that wanted to support a replica even if it saved them money. That's an amazingly loyal community.
So what went wrong?
One of the many projects they shared was the initial designs for the second iteration of their successful printer. And the good news is that the word spread. Most of the 3-d printing community knew it was under development and they talked about how great it would be.
The bad news is that no one wanted to buy the first generation. Their CEO sums it up best:
Word spread like wildfire among MakerBot fans who were immediately sold. The bad news? Everyone stopped buying the first generation printer to wait for the latest and greatest — which was still a year away.
We got through it somehow, but we definitely shot ourselves in the foot that time. And you can only shoot yourself in the foot so many times before you can't walk anymore.
The Osborne Effect
MakerBot fell victim to the Osborne Effect:
The unintended consequences announcing a future product, which ends up having a negative impact on the sales of the current product.
If you're a month away from launching the product then announcing it is usually great because the hype will fuel a successful launch. But if you're a year away you could lose out on a lot of sales for the current product. It will be obsolete soon enough and people will just wait.
It was that it undermined sales so drastically they had to cut 20% of their staff.
Don't hesitate to reveal the inner-workings of your decision-making process if it would strengthen your dialogue with customers. When it comes to business plans and unreleased products, however, think (and then think again) about potential fallout. Once a story is out in the wild, there's no getting it back.
Don't Compete With Yourself
You already have competitors, technology is always changing, and there's no way you can get through your to-do list. Don't add one more thing to your plate. Don't compete with yourself.
There's a time & place to announce a new product. If you announce too early you can lose out on sales today.
Few products benefit from hype. And it's mostly products that are either cool (like a new iPhone that you want to brag about) or products that are limited in quantity like the Nintendo Wii.
Movies release trailers a few months in advance (there's social currency sharing how you saw the newest movie), video games do the same thing, and live events promote the event many months in advance.
A good rule of thumb is will people stand in line for this?
People Would Most Definitely Stand In Line
If so, it's worth announcing early and building the hype.
And if you do start building hype make sure to maximize it. When people are excited take pre-orders (Apple does).
If you aren't ready for pre-orders because you haven't figured out pricing, fulfillment, or some other hurdle you probably aren't ready to announce.
They Probably Wouldn't Stand In Line
This is probably 95% of products out there.
Relax. This doesn't mean you have a bad product. It just means you can take a bit of pressure off around when & how you should announce a new product.
If people aren't willing to stand in line you don't gain much by announcing your new product. You only open yourself up to a loss in revenue.
If you still want to announce ahead of time try a week or a month. As the CEO of MakerBot said,
think (and then think again) about potential fallout. Once a story is out in the wild, there's no getting it back.
So protect your business and keep things under your hat until you're sure you're ready.