One of the great benefits of Web2.0 consumer internet services is that the product cycles have diminished. No longer are the next versions available and shipped every eighteen months like traditional shrink-wrapped software. Instead, when a new feature is ready, then it’s ready to go live to beta test. Google has led the charge of conditioning of us to view these beta versions as an ever evolving service. After all, GMail is still in beta well over two years after its initial release.

For startups, however, is there market adoption risk in the perpetual beta? Or, more importantly, is there risk in launching with only a half-baked or quarter-baked service? Yes, I know and agree with all of the virtues extolled in the continuous launch approach – immediate feedback from customers, quicker time-to-market, ability for building buzz. It seems to me, though, that the widespread early beta launching perhaps has gone just a little too far.

It appears that the word “beta” is slowly losing its original meaning. Or maybe it’s just evolving. Wikipedia says a “beta release usually represents the first feature complete version” of a product. Is that really true of all Web2.0 start-ups slapped with the “beta” moniker? Perhaps “alpha” (“still awaits full debugging or full implementation of all its functionality”) or “pre-alpha” (“not feature complete; that is, it is at the stage where designers are still wondering about what functionalities the product should have”) are more suitable labels.

The purpose of this post isn’t to complain over semantics, but about suggesting that startups more actively think about managing the expectations of its users. Many times I have visited new sites (wearing my consumer hat, not my VC hat) and been completely turned off because of the utter lack of functionality of the beta version. Will I forgive them and return at a later date remembering that, after all, it was a beta? Maybe, but less likely. Everything’s a beta these days, so why should I be any more tolerant of deficiencies? While the early adopter community may be forgiving and conscious of the Web2.0 beta paradigm, the average consumer is not.

I am not suggesting that we go back in time and resurrect extended product cycles. Hardly. I am suggesting that emerging web services startups should give some deliberate thought about what constituencies are ready to see a release – and especially a new launch – before it is opened up to the general public.