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134 The Technology Balance Sheet

recruits. They should try to get recruits to tell more about themselves than the company tells about itself and avoid any mention of costs and schedules.

PREANNOUNCING THE PRODUCT

It is absolutely foolhardy to preannounce a product before it has been tested internally and passed its acceptance tests. At the very least, preannouncement is likely to be an embarrassment; at worst, there might be legal repercussions.

In no case should a product be officially announced before it is operating well enough to pass formal tests that are comparable to actual customer use. Ideally, the product announcement is made at the end of beta testing at customer sites. Anything less conservative is a flaw.

This is one flaw that is even more painful in large companies than in start-ups. In 1966, IBM preannounced a large computer that would compete with Control Data Corporation's 6600 in an attempt to get customers to wait for the IBM product, which, in this particular case, never came. CDC sued IBM and was awarded $600 million in a consent decree that forbade preannouncement.

TECHNOLOGY BALANCE SHEET RULES

The following is the fundamental rule for evaluating a new venture's technology:

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