We just launched a free video gallery plugin for WordPress. The goal is to develop it into a multiplatform software product.

Last night, I woke up with an upset stomach from drinking a couple of ciders and lay in bed thinking about its startup costs. We developed the free plugin in 50 hours with an average cost of around $38.50 an hour for around $2,000 invested.

At some arc in time, we’ll start to get a return on this investment. That might be 500 hours invested ($20,000) or a thousand ($40,000.) Or it’s possible, we’ll get to 500 hours and still see little opportunity and kill it.

In fact, years ago, we put over 500 hours into a WordPress product and sold just a handful before realizing the support costs were going to eat up what little revenue we had.

There are a few popular ideas that address this problem:

  • You can run a “smoke test” where you try to sell a product before you develop it.
  • Alternatively, you might take pre-sales in advance of building it to prove out the demand.

These are both great tactics to mitigate risk. But they’re limited in scope and impact. They only work in certain situations when a market change is imminent (pre-sales) or when a sale is low enough in risk that customers are willing to buy with little information (smoke test.)

Even when these tactics work, at some point you have to invest.

Often, the options you have and what’s is possible only revealed after you’ve made that investment.

Growth requires energy. You need enough fuel to get the plane off the runway before you run out of asphalt. It’s inherently risky to approach it with half measures. To try and put just a little gas in the tank and taxi down the runway hoping you’ll hit a gust of wind.

That’s not to say you should just dump money into growth with the attitude that, “that’s what it takes.” Rather, that you have to fully commit up to a certain threshold in order to give an investment the best opportunity to generate a return. A minimum effective investment.

What that threshold is depends on what it will take to identify signal in the market- situations that tell you your investment should work and will likely work.

Featured image is of stamps issued by the United States and Philippine Islands for Air Mail carried on the first flights in each direction of PAA’s Transpacific “China Clipper” service between San Francisco, California, and Manila, Philippines. Used under public domain.