A Tale of Two Launches: Orders vs. Pre-Orders

This is a tale of two Silicon Valley startups that chose late October – just one month before the kickoff of the biggest shopping season of the year – to launch their new products.

The first company is Lytro, which announced an ultrasmall camera of the same name that utilizes light-field technology so users can shift the focus of a digital image after it’s been shot. The second is Nest, which released a new digital thermostat for the home that’s not only easier to set – think iPod easy – but also learns to manage itself based on usage patterns.

If you’re thinking cool and hip and a natural for the holiday season, you’re probably thinking the Lytro camera. After all, it’s small and comes in cutesy colors and offers a funky kind of manipulation feature. But you’d be wrong.

You see, the Lytro – which carries a price tag of $399 – was only made available on “a pre-order basis, ” with shipments expected in “early 2012. ” Yikes! That means coughing up some big bucks for something that seems to be just a prototype and demo and won’t actually be available until after the holiday season – assuming the company doesn’t hit any development and production delays between now and then.

That’s an awful lot to ask of the consumer. And by making a splash out of its “launch” – which really can’t be considered a launch when nobody can actually get their hands on one yet – the company has burned one of its “at-bats, ” the rare moments when it can get a bunch of high-profile media attention. The next time the product launches, the media and the consumer market may no longer be interested.

Technically, Nest’s launch was also a “pre-order” but for a release date about two weeks later. That’s more like placing an order and then having to wait the 7-10 days for it to arrive on the doorstep. It’s a time frame that satisfies our desire for instant gratification. Beyond the actual calendar date, Nest had done some preemptive work by placing the product in the hands of reviewers for some honest assessments of its usage and its value at the time of launch.

That’s important because, using that launch model, the Nest thermostat – which was developed by a team led by iPod inventor Tony Faddell – provided consumers with the information they needed to make an educated purchasing decision at the time of launch.

Within days, the company had sold out of its first batch of units and had folks on backorder into the new year. Regardless of how many units were manufactured in that initial round, the company pulled an Apple with the launch: they created buzz, which led to a scenario where demand outpaced supply.

I reached out the Lytro folks for some insight about their launch strategy and they replied that interest had been high and, as such, they decided to take pre-orders. I suspect this interest came from photo enthusiasts, very early adopters and possibly also competitors. But everyday consumers? I suspect not.

If I had been advising Lytro folks on a launch, I would have suggested holding off on the October launch and forgetting about any pre-holiday buzz. Instead, I would have suggested an early demonstration at the big Consumer Electronics Show in Las Vegas in January, a place where mainstream media is always looking to give some air time to sneak peeks of “oooh-aaah” products that will be coming later in the year.

The company could have picked up some sound bites, made some contacts with potential resellers and identified some potential early reviewers. And if the product isn’t actually ready until the Spring or the Summer or even the next holiday season, there’s no harm done. It’s not like anyone would expecting to leave Las Vegas with one.

It’s unclear if Lytro has any more “at-bats” left when they finally are ready to put these cameras in the hands of consumers. It looks like a great advance in technology (if the product pays off on promises made) so I personally hope they do. If so, it will be interesting to see if they are as successful as Nest has been.

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