Ask A Good Product Manager

Your product management questions answered

How do you handle competitors in a beta program?

Posted on May 14, 2008 · 2 Comments

Question: How do you handle competitors signing up and participating in your beta program?

I believe there are a range of responses — everything from trying to keep them out of previewing what you’re working on, surveying about, communicating to beta participants, intentionally feeding them misinformation, etc. What is ethical and what factors can help you decide how much energy/time to spend worrying or tracking this?

Answer from Brian Lawley of The 280 Group: The best way to protect against competitors using your beta information is to include strong a NDA and non-compete/non-use of information clause in the license agreement that beta participants must agree to in order to participate. Make sure this includes direct competitors as well as anyone who provides this information to anyone not under NDA. Then, when you send out your first batch of communications, make sure one of the first bullet points is: “Please remember that under the terms of the license agreement you may not share any information about this product or use it in any way to create a competitive product. If you do you will be liable for significant financial consequences.”

If this won’t stop your competitors then nothing will. :-) And if you find out that they are using it, have your lawyers shut them down.

As an FYI — I was once at a large company where a competitor released a major beta release. Some of the people inside the company got hold of the beta and ignored the terms of the agreement. Within a day they were fired and the company was extremely worried about its ability to compete in the future. Don’t take a chance — it isn’t worth it.

2 other answers so far ↓

  • Raj // May 14, 2008 at 10:01 pm

    To add to Brian’s excellent points, you can also:

    * Individually review and approve beta program participants – if the scale of the beta program is small.

    * Scale down the beta program to limit the number of users, so that you can individually review participants.

    * Display the disclaimer Brian proposed within your software itself – either right at launch, or even at the header/footer of every page.

    That said, I find that competitors eventually get their hands on your software – regardless. The best solution is to keep on innovating so that copy-cat competitors always have to play catch up.

    – Raj
    Accompa – Affordable requirements management software for product managers

  • Gopal Shenoy // May 16, 2008 at 11:21 am

    Seriously, I would be less worried about competition getting access to your beta. Instead spend more time processing the feedback from your Beta customers and getting them addressed. As Raj mentioned, competitors will eventually get their hands on your software.

    It is also true that if something really innovative exists in your software, it is probably going to take the same amount of time for the competitors to imitate. So unless your Beta is that long, it still should give you the first mover advantage. And if it is really considered worth it, apply for patents before you release your Beta.

What do you think?