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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?"
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.
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
>Be open and perhaps a larger company will buy you.
Good for the investors and execs, bad for everyone else who would rather have a job than a severence package.
-fb Everything not expressly forbidden is now mandatory.
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/
What about the Segway? They made a big publicity stunt out of being secrative. In some cases, how much information, and the timing of the information that you reveal about a new product is important for marketing purposes.
But yet... (wait for it)... They suck. Next example?
How does one connect with a VC or angel investment firm?
Contacts. The Real Money (tm) comes from knowing people who know people, who can get your pitch into the right hands. I have relatives who do this (both as angels and as VC firms), and it's all from who you know. There're very few, if any, 'cold call' plays that end up with money from their VC firm.
Also, it helps to be doing something in China.
-EvilMagnus
Could you please post the name of your company, so I can never, ever use your services?
Does it bother you that you're a parasite?
I think his point was that good consulting advise can not make up for bad management.
The reasons startups fail, BAD MANAGEMENT
Your post hurt my brain to read.
I would add that sometimes you want to keep quiet until your idea/plan/design/whatever is more concrete and refined.
If you let people take a peak at what you plan on doing and it looks like crap, then they're going to be less interested by the time you get working.
You also want to avoid over-hyping, which can lead to disappointment once you finally release.
So my advice would be:
1. Keep quiet until you have something of high enough quality that people would pay real money for it.
2. Don't say how great your product will be unless you know for sure it will be that awesome when you finally put it on the market.
3. Don't start hyping your product when a deadline isn't even in sight. When you finally do get out there, people will be so annoyed with your out-dated hype that they won't care about you anymore.
What?
You're kidding right. From the parent post it sounds like it went something like this:
Consultant: Your business idea is stupid.
Customer: We are brighter than you, take our money and do what we say.
Repeat.
At what point does the consultant not become a parasite? He indicated they told the customer it was a dumb idea, multiple times.
Eventually you just have to except the fact that your customer is stupid and you might as well take the money as compared to someone else taking it.
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.
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.
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.
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.
Having been involved in several startups with budgets ranging from hundreds of millions of dollars down to one that's self-funded, I've found that the key is in knowing when to listen to your customers versus when to tell them what to do. Most people don't believe this, but there are times when you need to tell people what they should be thinking. After all, you're hired not only for your ability to service a customer's needs but also for your expertise, and if you keep asking people all the time what they want then they start wondering whether you know what you're really doing. The message that you want to convey to any new customer is "Hey, I know what I'm doing, and I want to use that knowledge to help you with your needs."
If you don't want crime to pay, let the government run it.