diff --git a/Makefile b/Makefile
index 3e0c36da6a..b35e3f5c9a 100644
--- a/Makefile
+++ b/Makefile
@@ -204,7 +204,7 @@ build-docker-gaiadnode:
 
 # Run a 4-node testnet locally
 localnet-start: localnet-stop
-	@if ! [ -f build/node0/gaiad/config/genesis.json ]; then docker run --rm -v $(CURDIR)/build:/gaiad:Z tendermint/gaiadnode testnet --v 4 --o . --starting-ip-address 192.168.10.2 ; fi
+	@if ! [ -f build/node0/gaiad/config/genesis.json ]; then docker run --rm -v $(CURDIR)/build:/gaiad:Z tendermint/gaiadnode testnet --v 4 -o . --starting-ip-address 192.168.10.2 ; fi
 	docker-compose up -d
 
 # Stop testnet
diff --git a/networks/local/README.md b/networks/local/README.md
index 3a0f855be0..ef5e27803d 100644
--- a/networks/local/README.md
+++ b/networks/local/README.md
@@ -61,7 +61,7 @@ rm -rf ./build
 make build-linux
 
 # Create configuration
-docker run -v `pwd`/build:/gaiad tendermint/gaiadnode testnet --o . --v 1
+docker run -v `pwd`/build:/gaiad tendermint/gaiadnode testnet -o . --v 1
 
 #Run the node
 docker run -v `pwd`/build:/gaiad tendermint/gaiadnode
diff --git a/server/testnet.go b/server/testnet.go
index d7e4ec9ac7..93f563005f 100644
--- a/server/testnet.go
+++ b/server/testnet.go
@@ -20,7 +20,7 @@ import (
 var (
 	nodeDirPrefix = "node-dir-prefix"
 	nValidators   = "v"
-	outputDir     = "o"
+	outputDir     = "output-dir"
 
 	startingIPAddress = "starting-ip-address"
 )
@@ -49,7 +49,7 @@ Example:
 	}
 	cmd.Flags().Int(nValidators, 4,
 		"Number of validators to initialize the testnet with")
-	cmd.Flags().String(outputDir, "./mytestnet",
+	cmd.Flags().StringP(outputDir, "o", "./mytestnet",
 		"Directory to store initialization data for the testnet")
 	cmd.Flags().String(nodeDirPrefix, "node",
 		"Prefix the directory name for each node with (node results in node0, node1, ...)")