Brad- I agree that there is a certain "fad" element associated with using the term beta. And no one seems to want to use the term "alpha".

However, let me propose one legitimate use of the term "private beta" that I think has emerged as particularly unique to our day and time. It is how we are expecting to use our private beta when we launch in early fall.

Because we are no longer "shipping bits", we have an opportunity to get software up and running more quickly and test value propositions earlier. In the "shipping bits" world, it was very difficult & costly to get a high scale test of your core value proposition. Surveys? Focus groups? All inadequate.

However, in today's day and time, it is exceedingly easy to get up and running one value proposition and test whether that is the correct one, at some levels of scale. By running a private beta, you have an opportunity to pull together a group of users who can really help you decide what direction your product needs to go.

That's not to imply that the level of quality shouldn't be at or near "beta quality". One example to point to is Xobni. They started off as email analytics and moved to Fast Email Search as positioning. It's harder to do that when you are in the "public" phase.

Testing that value proposition and iterating is to me the key distinction on the use of a private beta.

Rich... I don't disagree with you that this would be the right approach. In my perspective, I wouldn't characterize it as "necessary evil" vs "wisdom in the room", rather "insurance" vs "value-creation" for which I think there is still a disconnect between entrepreneurs and attorneys.

The problem here is that I'm just not willing to build a "solid relationship" with an attorney when it's going to cost me $600 / hr to build that relationship. Not to mention that building a solid relationship with the attorneys who ACTUALLY do most of the work would need to be with those who have zero experience doing anything other than school & law. Never having been in a business environment (small company or big company alike), there's a certain lack of how things get prioritized.

I'm just not going to pay hourly to "build that relationship". I can't afford it.

This is an unbelievably timely post for us Jason! Great work and I look forward to seeing the rest of your series. Here are a few ideas for future posts.. based on learnings:

* Any secrets beyond "gut feel" on selecting an attorney when founding the company

* How do you manage expectations and costs in your first year?

* What legal items would you prioritize while bootstrapped? post seed? post series A?

* How do you deal with the fact that as a start-up company you will be the low man on the totem pole for the "big reputable startup law firms", and thus will be assigned associates who lack any business experience or awareness of the dynamics of a start-up company?

* What sorts of legal budgets should start-up companies plan for while bootstrapped? while seed funded? while series A funded?

We literally spent the day yesterday dealing with this frustration yesterday. We are in the midst of closing our first round of financing and it's quite unfathomable how expensive this is. Here's a list of questions that run through our minds:

* we have one side drafting and one side reviewing. Why should it cost an equivalent amount of time on both sides?

* why do drafting documents consume so much time when what we are talking about is generally cut and pasted documents?

* does the disconnect stem from the fact that we view attorneys as providing insurance rather than value-creation and attorneys see themselves vice-versa?

In any case, I agree with you Jason, there is a huge opportunity to re-invent this industry. Assuming so many investments are largely cookie cutter, here is an interesting idea. It seems this world could benefit from some transparency. What if we could create a repository of financing documents and see how different and how cookie cutter things really were? And beyond just template documents, let's really start to understand what makes one investment different from another. We seem to have done a pretty good job of templatizing public securities, why can't we do the same with private securities?

It seems that part of the problem resides in the fact that the same type of information assymmetry which exists with investors/entrepreneurs also exists with attorneys/entrepreneurs, hence the exorbitant rates. Moreover, you don't ever hear those stories of "well our attorneys really did that one right", so on the flip side it's hard to understand when the higher-priced attorneys pay off.

Anyhow- looking forward to hearing about your other frustrations!