Google's beta culture struggles when the price isn't free

Is the beta and iterate approach so bad? It is when you're forking over real dollars for something that should just work like your TV.

Logitech acting CEO Guerrino De Luca took his lumps in an investor meeting and blamed Google TV and Logitech's Revue for hefty losses. The Revue is gone and Logitech is doubling down on business via its LifeSize unit and retooling its product lineup for consumers.

De Luca's presentation got a lot of folks wound up. Here's the slide that hurts:

De Luca basically said Google TV had no business being on the market and was clearly a beta.

Is the beta and iterate approach so bad? It is when you're forking over real dollars for something that should just work like your TV. If the device is free then you give Google more leeway.

This beta disconnect follows through to other products. Google's Chromebook would be fine as a free device. For $500, Google's Chromebook is a tougher sell. DigiTimes reported that Acer only sold 5,000 Chromebooks. For business, Google's Chromebook makes sense for administration purposes. My ZDNet UK colleague Jack Schofield considers the Chromebook to be another "Googleflop." Sean Portnoy said the Chrome OS will continue. For Google's part, the company noted that it is getting Chromebook traction in education. In any case, you could argue that the Chromebook effort seems like a beta. Overall, it's far too early to call Chromebooks a flop for businesses. For consumers, Chromebooks haven't gained.

Also on the beta front, Google's Honeycomb Android launch was also clearly a beta that needed fixing later. That's fine unless you're buying an overpriced tablet like the Motorola Xoom. Android tablets still struggle with pricing and integration issues.

The more expensive a Google powered device is the less tolerance you have for a beta-ish feel.

Ultimately, Google's perpetual beta approach---outlined in this Knowledge@Wharton article---means that the company may have to reorganize. The launch fast and iterate works on the Web, but beta worship doesn't fly with integrated devices that may cost you $500. Google may have to form two divisions---one that's beta happy and another that doesn't cause key partners to lose a lot of money.

In other words, Google needs to realize that different markets require various approaches. Wharton prof Karl Ulrich drives the point home:

What you call the 'perpetual beta' has its origins in the spiral model of product development. Instead of fully detailing in advance exactly what the product will do and then engineering to that specification, the developer rapidly iterates through define-build-test cycles in order to take advantage of the learning that occurs in the interaction with the user. Obviously this approach would not work well with a Boeing commercial airframe. [That type of] product has to be right from the start and you don't want to have to maintain many different versions of the product in the field.