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Do Stealth Startups Suck?
glinden writes "In 'Stealth Startups Suck,' Bloglines CEO Mark Fletcher argues that 'stealth mode for a web start-up is the kiss of death.' He says that moving quickly and getting feedback from early users is much more important than protecting the core idea or trying to launch a perfect product. Is there any good reason for a web startup to not be open about what it is doing? What about other kinds of software startups? What about hardware startups?"
While I agree with him in general, one thing you need to be aware of is: Be careful that advertising before your product is ready doesn't tarnish your company's reputation. While such a thing can be turned around later, it can easily kill your company early on.
:-)
;-)
One other interesting thing he did say, though:
My rule of thumb is that it should take no more than 3 months to go from conception to launch of a new web service. And that's being generous. I'm speaking from experience here. I developed the first version of ONElist over a period of 3 months, and that was while working a full-time job. I developed the first version of Bloglines in 3 months. By myself. It can be done. And I suck at it! Just ask all the engineers who have had to deal with my code.
This somewhat ignores the amount of business development that has to go on behind the scenes. It takes time to get funding for one, and much more time to build a network of providers. In fact, building that network can still be going on years after the service has launched! You may not even be able to launch the service if you don't manage to find an existing provider base that's willing to go with your idea. Most of them will want to sit on the fence and see how it goes first.
Of course, this strengthens his original point in that you can't gain a provider base until you get the word out to your customer base.
On another topic, this talk of investors has me curious. How does one connect with a VC or angel investment firm? Most of the more public ones don't seem to want to do business with you unless you're something other than a caucasian male. It seems that it can pay off to be considered ethnic.
What about other kinds of software startups?
You do need a product before you can release 1.0. Also, you need to have an advertising campaign in place with a one-two punch. First, release the product with much fanfare. This will generate interest and some sales. Then follow up with an army of salepeople and catchy advertising to prevent those initial sales from waning.
What about hardware startups?
Surprisingly similar to software products, only it can be much harder to release a patch. In fact, if the hardware fails to live up, it may be the death of your company. i.e. You may not be able to do another manufacturing run until you generate sufficient sales of the initial run.
Javascript + Nintendo DSi = DSiCade
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The War of 1812... the good 'ol days when the federal government actually tried to save New Orleans.
I spent about a year working for a consulting company that was developing the presence for one of these "stealth start-ups". They were certainly not counterevidence to the thesis.
They spent millions, much of it on our programming fees, as we went through endless iterations of design-as-you-build. We tried repeated to reign them in, get them on a rigorous development process, and convince them to get a basic system live and build from there. They insisted on dotting every i and crossing every t, and rolling out from day one with ridiculous bleeding edge multimedia features that had nothing to do with their business model, before ever revealing the site. All the while we billed them T-and-M. They went broke and dark within a month of their actual debut on the Web.
It was stupid, frustrating work for a stupid, frustrating client, but the paycheck sure was nice...
Trouble making decisions? Just flip for it.
.. only the failed stealth startups suck. The rest are successful!
This sounds just simply... for lack of a better word... stupid. I mean, it is like "Let's have a TV show that does X Y and Z, but we can't let ANYONE know what it is about, EVEN THE VIEWERS, or they might steal our idea!!!!!!!!!!!!"
I'd have to say if your business model floats on that, you better have some arm floaties.
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
A stealth startup is a risk. When it is done smartly, the cash is bigger, when it is done badly, the failure is bigger. If you get more feedback early on, you can be more sure in the product, but on the other hand you face risk from the competition.
Nothing new here, it's been like this for hundreds of years.
It takes a man to suffer ignorance and smile
Be yourself no matter what they say
Dear Mr. Gates,
I have just released a new product to surf the "World Wide Web". I call it "Netscape".
I think something as important as this should not be kept under wraps. I would appreciate any feedback you may have!
Yours,
Marc Andressen
Toronto-area transit rider? Rate your ride.
On another topic, this talk of investors has me curious. How does one connect with a VC or angel investment firm? Most of the more public ones don't seem to want to do business with you unless you're something other than a caucasian male. It seems that it can pay off to be considered ethnic
Call or write them and ask for a meeting. Chances are you'll get 5-15 minutes of their time. If they're interested, you'll get more. VCs have a lot of money sitting on the sidelines right now, so they're eager to hear ideas.
Oh, if you want them to sign an NDA, forget it. Almost never happens.
"I'd rather be a lightning rod than a seismometer." -Ken Kesey
Be open and perhaps a larger company will buy you. This could open up all sorts of opportunities now that you'll have a larger resource pool (assuming you are still included in the project of course). However, you do have to have a quality deliverable. While being open is very nice, being available for public scrutiny while your product or service is still in its formative stages may be a bit much. You have to draw the line somewhere and balance is important. While getting constructive criticism is great, opening up your project too early could lead to ridicule and hurt your future growth.
"If we hit that bullseye, the rest of the dominos will fall like a house of cards. Checkmate." -Zapp Brannigan
Or else someone might have stolen our ideas for presenting textual information with visuals, navigating with links, and entering information into form fields to interact with the customer.
It depend on 3 things mostly... * How much funding you have... if resources are low then sales are everything. * How totally awesome and stealable the idea is. * Who your competition is... and of course everybody says their ideas will or have been stolen from microsoft, but honestly most ideas aren't even that good. for the most part very few startups should prioritize anything above sales.
I'm working on a start-up at the moment (Virtual Village Square), and you NEED to be open with your soon-to-be customers. It will do you a lot of good, from getting feedback to building up good relationships with your customers, and it makes them feel like they're on the inside, too.
jason
http://www.virtualvillagesquare.com/ Online Communities: The Next Generation
Is there any good reason for a web startup to not be open about what it is doing? What about other kinds of software startups? What about hardware startups?
One giant reason for all of these is protecting your Intellectual Property. Assuming you're a small startup, you want to make sure your IP is protected against the big boys with loads of cash. Otherwise, M$ or anyone else with billions on hand can go "hm, look at that idea. Jones! You now have a $1.2 million budget. Makes something like this, market the hell out of it, and let's go".
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
You are trying to graft logic onto statistics. While I agree that the parent post is ambiguous, it should be obvious that he is commenting on the statistical liklihood of a stealth startups failure being relatively high..
Actually, I think the more cutting edge it is, the more stealth like it's startup should be..
...to your newsletter. Put me down for $100,000.
Stealth Startups Don't Suck
2) Wait for someone else to actually make it or something vaguely like it work.
3) [have your lawers knock on their door] Profit!
This issue is a bit more complicated than you think.
Well, it doesn't have to be all or nothing. I didn't want to advertise my game, Warband 1066, until it had been through a few rounds of testing from my friends. They gave me valuable feedback while I honed the gameplay over a period of months. Now, while it's not finished, it is ready for a larget audience, and I have confidence that I won't chase away early adopters with a game that sucks.
So there is a gray area between keeping it hidden and telling the world.
Sxip operated in stealth mode for about two years while it was ramping up. All discussion of merit aside, sometimes it takes that long to get the ideas and the team solid. Identity management is a good example of the old saying, "Things of quality have no fear of time."
Parity: What to do when the weekend comes.
Anything you are working on, 1000 other people have thought of but didn't FINISH. Being secretive gets you nowhere, doing stuff does.
Anything you design will not be what users wants until you show them your prototype and then ASK THEM what they really want. You are a geek, not a user you cannot possibly comprehend what they want, so stop trying.
And most important, a stealth startup can't get you laid.
Stealth = bad.
- Adam L. Beberg - The Cosm Project - http://www.mithral.com/
Having been in this situation before, I would never join another so-called "stealth mode" startup. Why? Here's a few lessons I've learned, most of them at one startup:
1) "Stealth mode" = "Our product is a piece of crap and we want to make it look like the next big thing".
2) Customers? It's the "build it and the customers will come" view of the world. Sooner or later, you need to sell your product to the masses.
3) You're typically not given information about what they're trying to do, even after signing an NDA. If you can't tell me what my job entails, how am I supposed to make an informed career decision to join your company?
4) They have lots of money, but no ability to execute a business plan.
5) After finding out that their product is a piece of crap and won't sell (see #1 and #2), they decide to change the product entirely. Translation: rewrite from scratch.
6) After step 5, perform mass layoffs because the rewrite is also a total failure.
Stealth start ups do suck, being open on things goes a long way with building trust on your soon to be customer base, no one wants to trust a company that has too many things in the dark..
www.brido.com : not your average blog..
There's a big difference between being stealthy to make a good first impression and being stealthy to hide a poor solution.
I speak from experience that I would *love* to get my product out there. I wrote a custom messaging product from scratch that I have wanted to "open source" for about a year now. The problem? Resources. It seems to me that I shouldn't just throw code out there. It needs to be presented and packaged in a way that's more suitable for an end developer (as distinct from end user). Then, it's not just getting it out there, but with some expectation that it could be supported and managed as an open project.
Unfortunately, my time is almost exclusively devoted to servicing my customers in the financial services industry. When I put in a new release, I have to show up on site at 6:30 am for about three weeks straight just to make sure everything goes well and people don't have questions. Given the degree to which they rely on the product, minutes of downtime could "cost' them millions of dollars.
Regardless, it's a pretty difficult situation. I don't make enough to hire someone else and more importantly the revenue is not consistent enough, but I constantly feel as though I'll hit a wall with how much one person can do before it's too late.
So perhaps there's a new designation representing stealth by force, not by choice.
It depends on why you are being stealthy and for how long you intend to be that way. I'm working on a new startup now that I don't want to talk about. Its not that I'm really afraid of someone stealing our ideas. Its just that we don't yet have anything to show and there is no reason to go talking about a million and one things that our software will do when it is done. At some point we will get something that works and then put it outthere.
Right now most of our company is a lot of notes on a wiki.
Erlang Developer and podcaster
Hold on, you're discussing the theoretical merits of different ways to start a business? This is pointless. The capitalist system has a very simple, very clear method of determining worthiness. If your plan sucks, you go out of business.
There are times that licensing issues could kill you straight-out.
A stealth period allows you to get a working demo up and going for a prospective licensee without having people flooding the crap outta your site.
Chas - The one, the only.
THANK GOD!!!
Secretive work may not be the best strategy for web design, which has ridiculous competition. It's better to get the product out there to fend off competitors. But I have a feeling it could become a major component of software development, especially for more industry-specific niche applications.
Specifically, I've been thinking about how OSS is being embraced by major IT players, and how releasing proprietary software as open source can benefit the development process. The traditional view is that OSS projects should be open from the beginning, in order to cut down on development costs.
But the reality is that most successful projects were open sourced after they were already quite functional, only to be further enhanced by "the community". After a little polish by interested users, the original developer can then go on to support and even sell the project, in competition with the released, free version and those who contribute to it. In some cases (plex86/win4lin), the original free version can even be successfully "re-closed" and removed from the market even after having been released and improved by the community.
By doing most of the original work in-house, the original developer can gain a step-up on any later developers who contribute. This creates a barrier of entry for anyone who wants to support projects like OpenOffice.org and Mozilla, which sprang forth almost fully-formed from the heads of their creators.
Of course, keeping a tight grip on the evolution of development of the original project is necessary for this model to work to the original developer's advantage. This is why we see friction in projects such as Fedora. It's in RedHat's best interests to maintain control of the original project. But it's also in their best interest to have a group of outside developers making small contributions without paying them. Keeping control of the free version also allows you to kill or cripple the project when it comes time to move to a more proprietary model.
"I assumed blithely that there were no elves out there in the darkness"
When you're in the business of publishing something, almost everything about the way you do it depends on the audience you're trying to reach. I've been involved with several directory-style sites that we will have done "stealth" releases for, by the rough definition being used in this article. The idea wasn't to broadcast to a mass audience, and we were just fine letting the first trickle of users see things without all the dots connected. We weren't measuring ourselves by a "branded release" model where we needed to appeal to a general audience; the people using this sites when they were fully up and running would be accessing them through a controlled set of sources.
(And your high class steak joint probably doesn't measure itself by Subway's standards, either, except in very general terms. Doesn't take out billboards to advertise, doesn't open in the same way at all.)
"Fundamentalism" isn't about divine morality. It's about human authority.
Every single time I meet someone who tells me that he can't tell
me anything because his company is in "stealth mode", I can't
seem to think anything other than "what a dork, he's doomed
for failure".
I think the one thing that "stealth mode" get a company is a
sense of self-importance for the staff. If you don't think about
it and haven't heard it a thousand times before, it makes it seem
like there's really something important going on. Secret.
Confidential. Just like those foreigh agents in the movies.
And if you tell people you're "in stealth mode", there's less likelyhood
that they'll look at your idea and mention how bogus it is, and
take away from your boundless enthusiasm for your clever
new javascript front end to some sql database.
Phantom startups?
... sorry ...
Sorry
I'm thinking about it, therefore I might be.
But 24 Hour Laundry or 24HL is not stealthy at all, everybody knows that they are a new online dating service that will rename on launch date to "Two For Harmonic Life"
If programs would be read like poetry, most programmers would be Vogons.
Release early, release often.
This process is also known as "beta".
Seriously, any startup needs to have a userbase (and the easiest way to get a userbase is to get them hooked BEFORE your main product comes out). Indeed, there were many good computers developed in the 80s and 90s. Most failed, because nobody had written anything for them and no user had anything that would work with them.
If those companies had circulated enough information to get software written prior to release, and had enough pre-release demand from users to keep things moving, it would have been easy. They preferred to keep things secret, their products died as a result.
Product publicity is like watering a plant. Water with toxins will kill, as will overwatering, as will not watering at all. The right amount of information, in the right-sized doses, would likely produce something with a better chance of survival.
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
I'm still working on the time machine so I can send the 1995 version of me a copy!
I just discovered Slashdot and it sucks pretty much!
If your idea is unique in some way, stealth may keep your competitive advantage while you perfect the product/service. This can be especially true when the product is being developed slowly by a small group, whereas a larger team could replicate the idea much quicker.
DUH!
This guy has coded one little program that he runs on internet ("web service" as he calls it) and then he considers himself expert of everything and generalizes the work it took him to code that application to every program that has html interface. I would really like him to code for example a multilanguage e-commerce platform for real world use that handles tens of thousand simultaneous customers in 3 months and without "lot of money" and then write another article about the subject.
Our company has been programming a business "web service" for a global customer for about 1,5 years now and it definitely was not even in a prototype stage in 3 months, few real world projects that have real customer are. AND we are profitable, still in slight stealth mode and have no VC money.
My quality social news site.com.
I agree with the article, I have posted my senior year project here before and it's great to get feedback. CmdrTaco wrote me and told me to keep hacking at it. As you can probably tell I haven't done as much hacking as I should, I've been busy with a VC startup. It was still great to get some feedback, especially from the founder of slashdot! I will probably do something similar when I have something to show for my new company.
Slashdot is an excellent group of people to get some feedback from because they are generally more willing to put up with bugs and poor layout to try out some new tech. They are also more likely to give their brutally honest opinion, as I'm sure your all well aware of.
There are also advantages to a stealth start-up. For example the 24 Hour Laundry project (that he talks about) has Marc Andreesen as a member. With that kind of name they are guaranteed to get big press when they 'come out'. It's still possible to get feedback from (a private group) of users in stealth mode and take it into account. And they will be able to continue that after launch with a larger group.
A Multiplayer Strategy Game for Mac OS X, Windows, and Linux
I've seen numerous smart people with smart ideas go absolutely nowhere because they are paralized by fear of having their idea stolen. I tell them, don't worry, nobody is going to steal your idea. You probably couldn't cram it down their throats if you tried.
Its not until you are making big money that anybody will take notice. No matter how good your idea is.
Even great ideas need marketing, and marketing is the opposite of secret keeping.
Besides, your idea is not new. You think it is, but a little checking will show that its been kicked around since the 50's. Just nobody has gotten it together enough to sell it.
Is there any good reason for a web startup to not be open about what it is doing?
Because Jeff Bezos is still out there. Watching.
Weaselmancer
rediculous.
An exerpt:t up.html
http://blog.softtechvc.com/2005/06/stealth_star
I fully agree that involving users as early as possible in the development process is an absolute must, but doing it too early can also be "the kiss of death". There are so many applications, services, cool web sites out there - crying for our eyeballs and attention - that launching something in front of users that is half baked, limited or too unstable might turn them off for a while, or for good. And will certainly not generate the positive buzz that is required for viral marketing to work.
The second argument for laying low is that your ideas might not be unique, but your overall product approach, and implementation, might be - for a period of time. Since very early stage startups generally don't have a lot of development "manpower", coming out of the closet too early might make it very easy for competitors to replicate some of these (good) ideas.
There might cases where Mark's suggestion is applicable, but I don't see them as being majority. And then I would ask whether these companies are the ones that are "built to flip".
This is just a rip-off of the numerous other browser based 'feudal simulations', so no worries about spoiling your position on the "market".. -Nothing new to see here.
Go to the web site of any major product that you're not already familiar with. Try to see if you can find a clue about what it actually does. The best you can hope for is O'Reilly comes out with a book, Cleaning Up with 24hourlaundry, a guide for startups.
First, there is such a thing as a unique idea and it can be important to keep it quiet. You certainly need to get your patents filed first. The fact that the author suggests otherwise simply means he has never worked in a truly inovative environment.
The first mover is important argument is not a truism. In fact, the first mover usually looses. Netscape is a poster child for that.
I'd suggest trying a couple more startups. The author can then look back at this article and smile at his naïveté.
When I read it, I could have sworn is said Do Stealth Starships Suck?
I thought "How esoterically geeky, even for Slashdot."
It's my opinion that if stealth mode gives you a tactical advantage, why not?
Discuss.
I'm reminded of a quote:
"Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats."
-- Howard Aiken
Alright, many of the preceding posts have hinted at it, but I'll lay it on the line:
If you're a startup, you have limited resources across the board. Okay, okay, If you have tons of VC money, feel free to follow his advice, then explain to the VC dudes why you didn't get them the massive ROI they expected two years down the road.
The worst thing you can do in any business is advertise a product too soon. Whether you're selling the Osbourne 2 or Team Fortress 2, early hype is "the kiss of death".
A previous poster commented something to the effect of the mantra I've followed for a while: Ideas are cheap; it's execution that matters. TFA seems to think that Ideas are what matters, and that stealth is all about protecting those. While I agree that stealth is a dumb way to protect ideas, it is a great way to shield your staff from "outside distractions" while they execute that idea. And it's also a great way to control the media -- and there's no business in the world that doesn't benefit from positive media control.
I still do not understand why VC companies use all this wording to convey simple concepts. I think they believe that investors and banks need to be amazed by their wording, since that is, in most cases, all they will see for a long, long time until the actual stuff comes out from development. And they'll realize they put a lot of $$$ to get a closed-source Xaraya or Mambo look-alike. Pffft.
I get mod points all the time, and I'm happy to "waste" them on stuff like yours, because my 5 little points are among thousands and thousands out there at any given time. You seem to place too much value on mod points - moderating is something to do efficiently and not worry about. Who cares if I "wasted" a mod point? Not like it cost me anything.
Besides, there's too many crappy comments that make +5 but should be modded redundant. Any joke involving Slashdotters not getting laid, for instance, is trite as hell, and a poor, outdated stereotype. Yet, consistently, they get +5 Funny mods. Modding down needs to be done too.
And some AC comments are insightful, so no, not everyone has them below threshold.
And if I could, I'd mod this whole thing offtopic, because I could. But I can't, so I'll feed a troll, and a poor one at that.
Having worked with a couple of specifically-focused VC's (content management) before, they show a strong preference for people referred to them by mutually-known acquaintances. Rationale being that these third parties have/will do a bit of filtering before referring them on. Most have no lack of ideas sitting on their desk; they don't have a lot of time to do sanity-checking and even basic background research for the various segments the entrepreneur wants to operate in. The obvious BS can be thrown out pretty quickly (and it is indeed pretty obvious). Everything else kind of waits around, unless it has a champion pushing it, preferably one with some kind of track record with the VC.
I actually asked a few of them about whether this was a common trait or their own idiosyncracy; based on their comments, this would appear to be SOP througout their community.
So you can take your chances with cold-calling. However, your time would probably be better spent networking with entrepreneurial types, IMHO.
NDA--agree with the parent. Lots of legal and practical headaches associated with an NDA, the biggest being that the VC can't (legally, at least) sanity-check the idea with his/her brain trust under NDA. Don't bother. If you're truly paranoid, don't try to approach VC's with a track record of funding potential competitors.
I do also concur with the parent that there's lots more money available to be put in play now than in the last few years. So get out and start schmoozing, inventors!
Sxip is a horrible example. They've become unsecret yet they still don't have a working product (I know what I'm talking about: if they did, my employer would probably buy it), so what did the secrecy get them? It certainly didn't protect them from competitors, because Microsoft has been trying to give away a product (Passport) in that market for years. As far as I can tell, Sxip's secrecy is mostly about making them cool, which surely does give them a financing and hiring advantage...if only that let them produce something.
I think the idea is to start out with a easy to reach goal first (like a small e-commerce package), release it, and then scale it up later.
Here is the first tech preview of teh w3bsite. We'd like our product to be clearly disclosed to the public, and prospective VCs.
http://www.zombo.com/
Yet you waste time posting about it.
Idiot.
Isn't the actual issue (related to 24 Hour Laundry) that announcing a new web site as "coming soon" sucks? Covering a store front window in black paper makes sense; It is a physical presence and can't be hidden. However a web site that you go to and has a "coming soon" web page is, essentially, garbage.
Under Construction signs have always sucked on web pages so this isn't very new. Nor is overhyping web services that are coming soon.
they need to be stealth in order to even get going.
.com business models can easily be replicated, and then overtaken by better-funded advertising.
Most
It's pretty much vital (to a certain degree) to keep the details of a business model 'stealth' until the plans start being executed, or sometimes even until the execution of plans are complete.
the only permanence in existence, is the impermanence of existence.
Segway counts as a stealth startup failure, doesn't it?
Does it?
Sure buddy. And which startups would those be? You're just another worthless Slashdot troll. Previous examples of your work:
"Just run so basic qa tests on the program. If it crashes, chances are that the authors have integrated an OpenSource library into it."
"If Linus were not such an arrogent retard he would have told the truth..."
"You're an uninformed retard.
"Very Funny. Retard.
Mr. IHateSlashDot is simply karma whoring to make up for all of his previous flamebait/troll downmods.
...that read that as "stealth starships"?
Someone else will get it so don't worry yourself. In fact someone already has.
Every Playstation, XBox, nintendo, gameboy, etc, etc. game is launched in stealth mode without testing it on the general public. I can think of at least one or two games that were successful in doing it this way. They have internal testers but that isn't the same as a full disclosure beta release. Even the significant PC games are launched like this. Did any one know about Half-Life before it came out with the official 1.0 release? On the flip side, do you remember the Quake betas? That was hot stuff.
In the end, make a sucky proeduct, get sucky results. It doesn't matter if it's stealth mode or not. That depends on so many variables that it is difficult to nail down (as per the comments so far). Some cases it is good to be stealth and in others it's better to have public betas.
Nope, guess not. Well at least until step 5. (see below)
Our new service http://www.sportsvite.com/ is intended to help people organize and play sports. We had a whole slew of a priori ideas regarding the features people would want for this type of service... BUT, after getting great feedback from our initial users, we were able to prioritize our requirements and fine-tune our plans for following releases.
Bottom line -- for these types of web services, it makes all the sense in the world to get it out there fast and essentially evolve the service alongside the users.
Our company has been programming a business "web service" for a global customer for about 1,5 years now and it definitely was not even in a prototype stage in 3 months, few real world projects that have real customer are.
That's interesting, isn't it? I think you and Mark Fletcher are both right. In my experience you're about one order of magnitude faster developing something with no customer in sight at all, while doing something for a classic "b2b" customer can drag on and on forever, sometimes with no or even catastrophic results!
Possible reasons may be: if you're coding according to someone else's ideas, there is always tremendous inefficiency involved just by transporting the idea across. Also, if the customer is a non-developer (like almost always), they tend to have some very strange ideas about the product, thus prolonging and endangering the project. And, the customer is traditionally never satisfied, even if everything is conforming to spec - on the other hand, if you'r a small startup coding for yourself, you have a vision and just go ahead and manifest it, way simpler and faster!
...there was a CEO who decided to mostly stealth a portable music player. It actually ended up working out pretty well. He did the same thing for his music store. iTunes and the iPod rock, despite naysayers constantly nagging "Why do we need yet another portable music player? How exactly is this revolutionay?"
But then again, maybe veterans are different vs startups in this respect.
-- Political fascism requires a Fuhrer.
First, they wouldn't tell me what they were up to in the interview (red flag #1) then of course it turned out the idea was lame, then they were funded through VC only with no revenue. Then it was the classic catch 22 of a stupid dotcom. They had to convince a bunch of online merchants to adopt their solution so that consumers would use their portal which required them to subscribe a bunch of merchants. Needless to say they are long dead and buried. Bad idea (so bad they were embarrassed to openly talk about it), bad execution (lots of so called solution architects hired who didn't contribute very much) and a terrible marketing/launch plan.
Never again will I join a company that will not tell me what the hell they are trying to build.
Those were tough times however, so I'm glad they tied me over until 2004 when the market rebounded somewhat.
Your pizza just the way you ought to have it.
Unless Safari is freaking out, I'm getting the exact same CSS style for 24h Laundry site, and for the site that has the FTA.. Judging from the extremely poor quality of the article itself this has to be a publicity stunt of some sort?
On another topic, this talk of investors has me curious. How does one connect with a VC or angel investment firm? Most of the more public ones don't seem to want to do business with you unless you're something other than a caucasian male. It seems that it can pay off to be considered ethnic. ;-)
To me it seems to pay off to be the son of a wealthy,white, male, republican yale alumni.
Oddly enough, when thinking up this post I did not have our current President in mind.
But there's a second and even more important reason why stealth startups are foolish. It shows that the management has delusions of grandeur. It shows arrogance, self-importance and being out of touch with the real situation. The real situation of a startup is trying to do R&D and marketing and sales starting from nothing and trying to do it on the tightest budget possible. That's the reality. The delusion that these "stealth startup" guys fall into is that what they are doing is as magnificent as discovering the Philosopher's Stone, and therefore the normal rules of business and finance don't apply. These guys are doomed.
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Mobile web applications
Look at Zombo.com... total stealth startup. The website just sat there with no defined purpose, as far as anyone could tell.
And now, look at it. You can do ANYTHING at Zombo.com.
-- I prefer the term "karma escort."
Maybe someone will find it interesting and help. .. but most likely noone will. And the guy will blew his only chance to make good first impression (which he is wise enough to care about actually).
3.243F6A8885A308D313
Maybe....
When I released the first version of FWReport, it lacked a man page, RPM packages, etc. I wrote the man page later, but the RPM's were contributed.
Additionally, several bugs were fixed by other contributors, and some internationization added.
Most successful open source projects use the release early release often technique because it is easier to get people involved in the beginning. Since the target audience is technically inclined and would have the skills to help, you want to assume that they will. Moreover it is a good idea to *ask for help.*
LedgerSMB: Open source Accounting/ERP
is something i've always found amusing. great new company, great technology, real cutting edge. can you tell me anything about it? no. and oh yes, we are a startup so you'll have to take a pay cut. are you interested?
Sxip is funded by the founder, Dick Hardt. If it was funded by VCs, there would have been more vetting of the soundness of the company's business strategy -- not to say it's necessarily bad.
What Sxip is, IMHO, is a startup promoting a very cool new technology for identity management. They just haven't found the right market yet. This is a fine way to run a startup. It just might take them a while before they find the sweet spot.
Plus, Sxip's not operating in stealth mode at all. Stealth mode by definition means not telling the world what you're doing. Sxip has published the details of their technology and products in intricate detail and provide open source implementations of the Sxip protocol. How is that in any way stealthy?
Sxip is not now in stealth mode, but the publications just started flowing a few months ago.
Sxip itself has been running for a couple of years. During that time, if you landed on the Sxip website, you'd see a notice saying "We are running in stealth mode right now. Check back later."
Parity: What to do when the weekend comes.
The article makes some good points, but I see a lot of post-hoc fallacy in the postings here. Most stealth-mode startups will fail because most startups will fail.
I worked for a startup which was never in stealth mode - in fact our chairman of the board announced a very ambitious product in the Wall Street Journal before the engineers even heard about it. We were doomed whether people knew about us or not.
On the other hand, this article brought to my mind thoughts of Danger, which was in stealth mode for what seemed like an eternity before the first HipTop (now known as the T-Mobile Sidekick) came out.
I'm not criticizing the article here. It was rightly focused on web services, which probably require a lot of customer input and gradual refinement to succeed.
Coming to the 'webbed' guys: Was google paranoid with pageranking before they launched it? Any web product is about communicating and reaching out (however secret the insides might be), so showing up early helps.
The Business 'Game' can be played with many a strategy. Stealth being just one of them, Surprise being another (offshoot of stealth?) One cannot generalise from the type of market or the size or the nature of products or services, which strategy works best. Better still, the system being dynamic and complex, you know what works only after it works.
No Greater Friend, No Greater Enemy! (Lucius Cornelius Sulla)
I read the title as "Do stealth Starbucks suck?" Nuff said.
"Anonymous could not immediately be reached for further comment." - International Business Times
If you are working on something completely new then this might be possible but if you are doing something that has already existing solutions, you better make sure your solution is at least in some way par with them.
My quality social news site.com.
most likely noone will
Nope, never happens
1. Engage best-of-breed infrastructures, monetize out-of-the-box communities and strategize integrated e-business
2. ???
3. Profit!!
And some AC comments are insightful, so no, not everyone has them below threshold.
Actually, when I get mod points I drop my threshold to -1. There's no point in surfing at +3 (my default threshold) and modding stuff up to +4/+5. Find five gem/trash posts, mod up/down accordingly, back to +3. That way, every post has a chance of being modded up, but I normally only read those that have been modded up. There's no point wading through crap to find a gem, if I can't do anything to make others read it.
Kjella
Live today, because you never know what tomorrow brings
First off, you should never have a "slump" in your build-up, that's worse than having a too slow start. If you hype too early, market a beta that's just terrible you have a very very short window to deliver through. If you don't, and customers leave, you're well and seriously screwed. For a web start-up, you can rather continously improve the service, but it can't be too much to handle. With applications this is much worse, because you don't get users to download daily patches.
The second real question is, what will the market do if you reveal your idea? That depends a lot on your position. Some people here have mentioned the iPod, Apple is a "trendsetter" and play by different rules. 99% of the companies out there, certainly all small start-ups are not. If noone will pay attention, go for it.
The question is really if you believe someone else is better at "the process". You can have a good idea, but someone else will take that idea, slap it in a good, solid, easy to use interface, effective marketing and essentially overrun you.
If your primary market power is the network effect (everyone goes to blognet because everyone is on blognet), you might as well get started early. If you are selling on product features (try my online tax software), stealth may be wise. Particularly if there are things that are actually unique and/or patentable, but I would take a very narrow definition of unique. Not what the USPO will approve, but what you are really willing to defend. Not "doing X... OVER THE INTERNET!".
Kjella
Live today, because you never know what tomorrow brings
There is a subtle difference between most likely noone will and never happens. Not sure if you can see it ..
Stealth startups run the risk of "groupthink"... when everyone in the room is so invested in their own ideas that they can't imagine anything is wrong with their baby. By facing a public audience, you are forced to own up to weaknesses in the product or service, spotty support, poor design. The core message seems to be to get your stuff in front of real, live customers as quickly as possible (with caveats about not overpromising). Only when you have customers do you have a real business.
He is definitely right about Segway. Segway was a brilliant invention (it still is a brilliant invention) killed by Kamen's paranoid mania for secrecy. Codename Ginger is a very entertaining and interesting book retelling the story of Segway's conception, invention, development and the business that was (mostly wasn't) clumsily built on top of it. If Dean Kamen wasn't constantly worried about Honda stealing his ideas and (in violation of or designing around around his patents) building a 100$ knock-offs, he might have allowed his marketing people to do user testing or something. It turns out that he didn't. Another blow to Segway was the hype, which too resulted from secrecy. When rumours about the product started circulating, Kamen did the worst possible thing - he didn't tell anyone anything. During the year that followed speculation ran rampant and when time came for Segway to be released, anything short of a teleportation device or a time machine was simply not enough.
Had Kamen not be as paranoid, we might have been all segwaying around already.
Future Wiki -- If you don't think about the future, you cannot have one.
It's not a waste of time if you bite - congratulations, YHBT.
Idiot.