More often than not, it’s pseudoscience, especially for consumer-facing internet products. It’s very possible that the demographics you are targeting has very little overlap with your family & friends.
There are several cases.
Whatever you do is awesome
Your family members & your best friends will compliment you no matter what you do or whether they understand or not. This totally gives you wrong signals.
But who are you?
Many (or most) people on your LinkedIn are just connections. They are busy in their personal life and work life. When you send a beta testing request to them, they may have a hard time to remember who are you. So it’s very possible that these “connections” will just ignore your beta testing requests.
Everything is bad
You may have some friends who make negative comments for almost anything in the world — well, we all have a few such friends during our lifetime. If you invite them for your beta testing, it’s very likely that you get a lot of bikeshedding-type negative comments. And you become upset. You are wondering why they are so mean. Hey, it is you who invite them for beta testing in the first place. Don’t blame them.
This is awesome, but…
This may be the most common case. They try to provide constructive comments. They’ll carefully balance kind words & critiques. But they are not your target users. They’ll just open your world-changing app once and only once in their entire lifetime. They’ll say, “This is awesome, but it could be even better if you add the following 231 features that the 35000-employee 15-year-old $500B Facebook has”. Again, they use your world-changing app once and only once in their entire lifetime, no matter you add these 231 features or not.
Real user & True fans
There’s very very little chance that several of your friends are your target users, and they actually provide useful feedback. But the chance is tiny. Probably the best use of this luck is to buy lottery.
You can just launch the basic prototype to the public and iterate from there, unless you are very famous & have the need to protect personal reputation. What if your app sucks? Well, most people in the world won’t have a chance to see your app. Even you launch or re-launch several times of your app, most people in the world won’t know the name of your app in their entire lifetime. Don’t worry too much. Everyone’s too busy to think about your app or you.
Just launch the basic prototype to the public and iterate from there.
Don’t do beta testing. Especially don’t do beta testing with your family and friends.