Jason Cohen guest-posted in December 2009 on the great blog On Startups, disputing the startup cliche that it’s always good to release your product early. He makes a good case to the contrary, although like some commenters I don’t think the iPod is a fantastic counterexample. (I mean come on. It’s Apple. They can get away with wild new design ideas, it’s what they do.)
Selling the product before release can also have the advantage of financing the development while at the same time focusing on the customers who are willing to put their money where their mouth is. It gets rid of the biggest problem of eliciting feedback, getting feedback from people who will never buy your product anyway (or may never buy at a price you can make money at).
Which, it should not surprise you to know, reminds me of a story.