I’m not sure where David, Samir and I internalized the concept of time-gating at Next Big Sound but it was something that was with us from the very early days. Time-gating is the powerful construct that you shouldn’t let things drag on into perpetuity but rather set up a gated amount of time where you’ll watch something play out and then make a decision on how to proceed. I’ve also heard this called time-boxing. This works for evaluating customer or market hypothesis, professional service relationships, financings, beta tests and many other business experiments.
During the summer of 2011 we were focused entirely on enterprise field sales targeting indie record labels - the middle segment of the music industry that exists between individual artists/managers and the major record labels. By the end of three months we had enough information to know that we couldn’t profitably sell into that segment of the market. The deals took too long to close and were for too little ACV compared to the time and resource required to land each deal. In the first six months of 2014 we focused on driving individual artist credit-card signups, also with a six month time-gate.
In retrospect, all of our time-gates were three to six months and we probably had 5-10 explicit ones through the life of Next Big Sound. 3-6 months generally seems like enough time to give something a serious, concerted effort and get enough information to see if the results are promising enough to continue. It also avoids the worst fear of something kind-of-working but kind-of-not-working for years and years and dragging on in a zombie-like state. That was always the worst sort of fate in our minds.
It’s a simple construct - an agreed upon date in the future and a calendar alert for the relevant people to reassemble and make a decision. Ideally there are pre-agreed upon success milestones attached with the go or no-go decision. This warms everyone up to what needs to be achieved so everyone can give the experiment a fair shot and avoid much of the finger-pointing, surprise, and pain of something being killed out of the blue at a future date.