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What is the tradeoff between time spent in testing a product and getting into the market first? 

I think it depends more on the market situation. Many times, in the hi-tech market you are going to be able to sell only if you are the first guy out with the product. It is really important to be the market pioneer. If the market demands it, you better get the product out and ask the developers and testers to go to hell. Getting a prototype of the product into the market is the least you can do.
At the same time, if you can afford the time (no pressure from competitors, new entrants, subsitute products or buyers) then do as much testing as possible. The balance between testing and the release should totally depend on the market!