Monday, November 3, 2014

Beta Agreement Example

Testing a product with customers is a necessary step prior to finalizing a design for launch.  Once a startup has what they believe to be a stable product, they will often provide it to some ‘test’ customers in order to gather feedback.
This is a critical step in finalizing a design and often brings out surprises that may have been forgotten or overlooked.  These types of tests are called beta tests in industry.
The important thing about them is to limit the exposure to a manageable number and ensure that feedback is collected.  If too many testers are using the product, designers can lose track of where the beta products have gone.  It’s very important to get them back since they do not reflect the final product on which the startup brand will be based.  Often people will volunteer to be a beta tester but then discover they are too busy to use it often enough to gather experience and provide good feedback to the designer.  Without the feedback cycle the beta testing process is useless.  Good beta testers are willing to use the product and also help collect data if necessary.
There are a variety of approaches to collecting data during a beta test.  Some products can be designed to automatically collect feedback during use and send the results to the designer.  Other products will require the tester to log feedback in a simple form to be collected.  The important thing is that the right data be collected.  This may be giving feedback on specific features, it may be collecting performance results, it may be testing the impression and quality of packaging, etc.  Organized beta programs define the goal of the beta test first and then craft a beta program to ensure that data is collected in response to the goal.
The design and entrepreneurship book “Make It Big, Crossing the Entrepreneur’s Gap,” discusses data collection during startup creation often.  The data that is important is that which will answer the next most important question at the lowest possible cost.  Beta programs are a great way to accomplish this for design validation.  “Even very simple consumer electronics start ups are using beta programs,” says designer and Stanford Engineering School Consulting Associate Professor Marc Theeuwes, “Putting a near finished product into a customer’s hands for a few weeks helps validate what is designed and also exposes the product to environmental elements that often reveal issues overlooked.”
Good beta programs collect the right data and are also easy for customers to do.  Beta programs that require too many things and or require the customer to remember to complete too many steps have poor compliance.  Simplicity is a good rule.  A good customer should want to be a beta customer because they want or like the product.  Adding a lot of administration to the product use can reduce the appeal of using the product.  Making it easy for customers to use and record results ensures good data collection for designers.
Lastly beta testing should be done confidentially.  The startup company should maintain control of when the product is announced to the external world.  Beta testers should understand that testing the product is done in secret and that any data that is collected during testing will be owned by the company.
Due to the litigious nature of the world it is a good idea to have beta customers sign a simple beta agreement that specifies a number of things discussed above.  It should state what is provided, for how long, how it will be used, what data should be collected, and what should be returned at the end of the beta test period.  The beta agreement below accomplishes this.  A few terms can be trimmed or embellished depending on the nature of the product.

*********** begin beta agreement ************
Beta Agreement
THIS BETA AGREEMENT (this “Agreement”) is made and entered into as of the _____ day of ________, 20___ (“Effective Date”) between _____________________________________ (“Company”) a _________ corporation, located at _____________________________________ and ____________________________ (“Beta Customer”), a ___________ corporation, located at ______________________________________________.
Beta Customer agrees with Company as follows:
1.            Company will provide to Beta Customer the development version of its ___[enter product name]____________________ (the "Product") and supporting components as listed in Exhibit A for development and evaluation purposes only.  Company will install the Product at Beta Customer's facility and Beta Customer agrees to cooperate with Company in such regard.  Target installation date is on or about _____________________________ to be operational upon completion of installation.  The Product will be provided to the Beta Customer for a minimum of _________________ days following the Operational Date and thereafter may be removed at the option of Company.  Company shall promptly remove the Product from Beta Customer's facility if requested by Beta Customer at any time.  Installation and removal of the Product shall be done at no charge to Beta Customer.
2.            Beta Customer will provide necessary resources to enable Company to begin evaluation and/or testing upon the installation of the Product.  Beta Customer agrees to utilize the Product on a regular basis.  Beta Customer agrees to meet or speak with Company on a regular basis to provide Company with the feedback on the Product and to identify problems encountered.  Beta Customer will provide Company with suggestions in writing for improving the Product.  Company will provide a notebook, attached to the Product, for the purpose of recording a description of problems encountered and suggestions for improving the Product.  Beta Customer will keep a log of the Product use and note comments there.  A log form is provided in Exhibit B.  Beta Customer will also fill out reasonable survey forms on a ___________ basis and email those to a designated contact at the Company.
3.            Beta Customer agrees not to use (except for Company’s benefit) or divulge to anyone either during the term of this Agreement or thereafter any of Company’s trade secrets or other proprietary data or information of any kind whatsoever acquired by Beta Customer in connection with use of the Product.  Beta Customer agrees to clearly inform all potential users of the Product of the need for confidentiality.  Beta Customer further agrees that upon completion or termination of this Agreement, Beta Customer will turn over to the Company any notebook, log files, surveys, data, computer files, information or other material acquired or compiled by the Beta Customer in carrying out the terms of the Agreement.  All such material and the information contained therein shall be the sole property of Company.  However, the Beta Customer may keep one copy of such material for archival purposes.
Beta Customer agrees not to discuss with competitors or potential competitors of Company and to keep confidential any of the designs, inventions, ideas, and know-how related to the Product acquired by Beta Customer during the course of the development relationship, all of which shall be the sole property of Company.  Beta Customer agrees to exercise its best efforts in not allowing competitors and potential competitors to gain access to the sites where Company equipment is being tested during the course of the development relationship.
4.            Beta Customer represents that its performance of the terms of this Agreement does not and will not conflict with the terms of any agreement to keep in confidence proprietary information and trade secrets acquired in confidence or in trust from a third party prior to entering into this development relationship with Company. Beta Customer will not disclose to Company, or induce Company to use, any confidential or proprietary information or material belonging to any third party.
5.            Beta Customer represents that it is not presently working with any entity that manufactures or sells products competitive with those of Company.  During the course of the 12 months beginning with the execution of this agreement, Beta Customer agrees not to evaluate or purchase a competitive Product.
6.            Beta Customer agrees to provide reasonable access to the Product site for the purpose of displaying and demonstrating equipment and technology to various parties, including Company employees, vendors, and potential clients.  All such site visits will be conducted in a cooperative, professional manner, in accordance with Beta Customer’s guidelines, not to interfere with the ongoing activities of Beta Customer’s operation.
7.            Beta Customer agrees to provide Company with access to data for performing performance analysis.  See Exhibit C for a specific list of the information Beta Customer agrees to provide Company.  All such information provided shall be the sole property of Company.
8.            Beta Customer agrees to use any software provided by Company relating to the operation, information storage and retrieval, record keeping and communication of the Product only in the manner described in the written materials accompanying the Product.  Beta Customer agrees not to use it in any other way.  Beta Customer agrees that the design, structure, and organization of the Product is a valuable trade secret and agrees to protect it as it would other copyrighted material.  Company owns the Product and any software provided with it.
9.            Beta Customer shall promptly and fully disclose to Company any and all inventions, improvements, discoveries, developments, original works of authorship, software, trade secrets or other intellectual property conceived, developed or reduced to practice by Beta Customer during the term of this Agreement and in any way relating to (a) the Product, or (b) use of the Product by Beta Customer under this Agreement (the “Information”).  Beta Customer shall treat all of the Information as the proprietary property of Company.  Beta Customer agrees to assign, and does hereby assign, to Company and its successors and assigns, without further consideration, Beta Customer’s entire right, title and interest in and to the Information whether or not patentable or copyrightable.  Beta Customer further agrees to cooperate with Company in executing all applications for patents and/or copyrights, domestic or foreign, assignments and other papers necessary to secure and enforce rights related to the Information.
10.          Beta Customer acknowledges that the Product is a beta version, pre-production prototype undergoing further development.  The Product is provided "as is." Company warrants that it has the right to grant temporary use by Beta Customer to the Product provided hereunder.  Company makes no further warranties of any kind, express or implied, (including all implied warranties of merchantability and fitness for a particular purpose) relative to the product or services provided hereunder.
11.          In no event shall Company be liable for any lost profits or other special, consequential, or incidental damages arising out of this Agreement, however caused and whether arising under contract, tort, strict liability or otherwise, even if Company has been advised of the possibility of such damages and notwithstanding the failure of essential purpose of any limited remedy.
12.          Company is not responsible for any losses or injuries arising from the installation, operation, condition, possession or use of the Product.  Beta Customer agrees to reimburse Company for and to defend Company against any claims for losses or injures arising from the Product, other than losses or injuries arising solely from Company misconduct.  Company agrees to defend Beta Customer against any claims for software copyright infringement regarding Company software, provided that Company shall control the defense and settlement of all claims.
13.          Company agrees to be responsible for any loss, damage, liability or expense arising from (i) damage to property and injuries to persons which may arise out of the negligence of Company in providing services or equipment pursuant to this Agreement, or (ii) infringement of any patent, copyright, or other intellectual property right of any third party which may arise out of, or be caused by, Beta Customer's use of the Product.
14.          Beta Customer hereby grants to Company the royalty-free right and license to utilize the Product to collect information (the "Information") with regard to the use of the Product provided that Company shall have no right to use any personal identifying information (such as name, address, telephone number, or social security number).  All Information shall be owned by Company and Company shall have the right to use the Information for any purpose.  Company agrees to keep confidential the name of Beta Customer in connection with the Information unless otherwise agreed.
COMPANY                                             BETA PARTNER:
Signed:  _____________________________     __________________________
Name:  ______________________________     __________________________
Title:     ______________________________     __________________________
Date Signed:  _________________________     __________________________

Beta Product provided:
Product _______________ model ______________ quantity ________
Product _______________ model ______________ quantity ________
Product _______________ model ______________ quantity ________

Services provided: (list installation, training, maintenance)

Log Form (Date Used and Comments)
Date:  _________________ Comments: ____________________________________________
Date:  _________________ Comments: ____________________________________________
Date:  _________________ Comments: ____________________________________________
Date:  _________________ Comments: ____________________________________________
Date:  _________________ Comments: ____________________________________________
Date:  _________________ Comments: ____________________________________________
Date:  _________________ Comments: ____________________________________________
Date:  _________________ Comments: ____________________________________________
(continue as many pages as needed)

List any specific performance data that must be collected during the beta period.

Disclaimer:  Material provided herein is for illustrative and educational purposes only. If you require the use of these or similar documents, you should seek the advice of a legal attorney.