You didn't write a lot in this post about your business outside of the outsourcing experience, so my advise may be off but I am latching off "option D" in your post and have the following comment:
For any product that's a game the two biggest business risks are:
- Will people play and enjoy it. -
For long enough to at least feel they got their "money's worth" and recommend it to friends. In almost all cases, games most important distribution channel is word of mouth. If it's not fun enough for people to play it with friends it will not succeed. Which leads to the second point
- How will you distribute it -
Even if it's awesome, if you don't have a robust plan to get it in front of the right players and customers (may be the same person of not, btw) at the right time it will be a challenge to reach success.
So by all means, figure out if people like it NOW.
And also use it to identify and lock-down "channels to market" -- NOW.
It will take time. Use it to continue to evaluate the manufacturing bit (some really good ideas on this thread) in the most frugal way possible until you get to the quality you want. I'm sure it's doable.
thanks brian for referencing us, this is oren from SaaSPulse.
Our product is a good fit here. in addition to collecting aggregated usage metrics, we visualize user-activity on the service with a stream that helps build a 'qualitative feel' of user engagement - that's very useful for services that are building initial traction.
we are still in private beta but happy to accept new customers. anyone who's interested can signup on our site and we'll set them up.
The challenge with the $200k-$500k funding gap is the fact that most VCs make funding decisions by partner consensus.
After spending the last 8 month trying to put such a round together, and going through the process with quite a few VCs, It's apparent that this brings 'boldness' way down because all the lead partners need to develop the intuition necessary to be bold-- on what is essentially a hypothesis on market development or consumer demand in a field that is usually not their individual core expertise and in the short time frame that this business allows nowadays. doesn't happen often.
This is why these sort of investments are made by small/ partner-lean funds or through the "strong" partner in a more traditional firm... and there aren't enough of those.
It's not that they don't want to make those sort of investments, its that they're not setup to do so. In our discussions, we've gotten to, at several occasions, a point where our sponsor partner is actively trying to get the deal done, only to fall apart because of this need for uniform consensus of the entire clan.
If I were a VC, I'd focus on streamlining that process through more partner independence as I agree that this is the sort of funding a truely innovative (particularly web software) company needs to establish itself these days and they are mostly missing out...