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Do Stealth Startups Suck? 219

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?"
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Do Stealth Startups Suck?

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  • by AKAImBatman ( 238306 ) * <akaimbatman AT gmail DOT com> on Monday June 20, 2005 @01:49PM (#12865512) Homepage Journal
    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.
    • by EvilMagnus ( 32878 ) on Monday June 20, 2005 @02:17PM (#12865757)
      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.
      • Also, it helps to be doing something in China.

        More generally, it helps to be doing something that's trendy. Most VCs aren't the business gurus they'd have you believe they are. After all, not every investor can be Art Marks, John Burton, or Mario Morino, just like not every programmer can be Steve Wozniak or (thank $DEITY) Charles Simonyi. The rest of them watch what the Big Dogs are doing, and try to do the same thing. Thus the "security is hot - are you a security company?" phase 12 to 24 months ag

    • 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. ;-)

      There are many different networking events where people can get in touch with VCs. VCs aren't trying to hide themselves, they're always looking for good, developed, non-crackpot ideas as investment fodder.

      If a pe
    • by jd ( 1658 )
      Not only did Transmeta start totally stealthy, but they also produced hardware that failed to live up AND needed to release a patch.

      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 informatio

      • by toddbu ( 748790 ) on Monday June 20, 2005 @04:10PM (#12866817)
        Product publicity is like watering a plant... The right amount of information, in the right-sized doses, would likely produce something with a better chance of survival.

        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."

    • 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.

      Well, I keep spending $49.95 on my pre-release, pre-advance version of Duke Nukem Forever in hopes that it'll come out sooner, so maybe advertising your product (wayyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy y yyyyyyyy) before it's ready isn't su

  • by Rei ( 128717 ) on Monday June 20, 2005 @01:49PM (#12865518) Homepage
    This comment intentionally left blank (for now - come back later!)
  • by aborchers ( 471342 ) * on Monday June 20, 2005 @01:50PM (#12865521) Homepage Journal
    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...

    • All the while we billed them T-and-M. They went broke and dark within a month of their actual debut on the Web.

      Hey, wait a minute. That was my client.

      But seriously, it's hard to believe that after a jillion of these exact same profiles that any investor would pony up so much for exactly the same thing to happen. On the other hand, a lot of VCs (still!) assume that most of their projects are going to die young and in the red, so this isn't exactly anything new. The trick is to make sure that you've got
  • No .. (Score:2, Insightful)

    by Anonymous Coward
    .. only the failed stealth startups suck. The rest are successful!
  • Stealth? (Score:4, Interesting)

    by TheRealMindChild ( 743925 ) on Monday June 20, 2005 @01:51PM (#12865538) Homepage Journal
    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.
    • This sounds just simply... for lack of a better word... stupid.

      How many startups have you participated in? From the other side of the coin, sometimes it feels like you have to maintain silence if you are competing against well-established entities, especially if they already have fab facilities and high-end test and measurement equipment ready to go.

      Back during the dot-com boom I worked for an FFRDC, and I knew many people that were leaving the lab to go to startup companies. Some of these were sen

    • 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!!!!!!!!!!!!"

      You may want to tell this to the producers of The Contender. If I remember the two the right way around (the confusion over it only goes to prove the forthcoming point all the more), the people behind The Contender announced they were making it, Fox jumped on the idea too with
  • by A beautiful mind ( 821714 ) on Monday June 20, 2005 @01:52PM (#12865545)
    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.
    • Except for the cash isn't bigger when done smartly because they never succeed. Can anyone name even one example of a successful stealth startup?

      That being said, his point about the first-mover advantage being huge is bullshit. Look at Google. They entered a market that was already at 100% saturation and they are now dominating it.

      • Can anyone name even one example of a successful stealth startup?

        If they succeeded you wouldn't know about it, that's the point. A successful stealth company would have appeared, said "hey buy my stuff!" and people would have bought it. Under Fletcher's proposal, a company would appear and say "hey buy my stuff!"... this is different to the naked eye how?

        Unlike kids who have this curiosity to "do the math" and discover they were conceived about 5 months before their parents married, very few people loo
    • by zuzulo ( 136299 ) on Monday June 20, 2005 @02:33PM (#12865877) Homepage
      Basically it seems to me that there is a very simple dividing line between companies that *should* stay below the radar for as long as possible and those that should attract as much attention as possible.

      If you have real, defensible intellectual property in an emerging market, stealth mode is, in my experience, a really good idea. You need time to figure out what follow on patents are needed - solving some of the problems that always arise when developing innovative technology often generate *more* innovative technology that also needs to be patented. In addition, quite frankly if you are *actually building* something innovative, most likely the big players are at least 24-36 months behind you. And they wont start catching up (and they will, and they can afford better lawyers than you can) until they find out what you are doing when you go public. So the time you spend below the radar is invaluable.

      On the other hand, if you are building product in an existing market, staying below the radar is the last thing you want. In this case, you want as high a profile as possible well before you are even ready to release product.

      As always, there are no real hard and fast rules. Sometimes you want to be below the radar, sometimes you want to be as visible as possible, and sometimes you just want to be hidden in plain sight in the middle of the pack. Common sense just isnt that common, i suppose. ;-)
    • Segway counts as a stealth startup failure, doesn't it?

      Does it?
  • by s20451 ( 410424 ) on Monday June 20, 2005 @01:52PM (#12865547) Journal
    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
    • by Anonymous Coward
      Something like that did happen.

      Mr. Gates decided it wasn't going anywhere and decided not to invest in it for several years.

      Then it became evident that he was wrong, and Internet Explorer was hurridly created and pushed out. By 4.0 it was the best browser on the market (at the time).

      By the time Microsoft started work on a web browser, almost everyone was using Netscape 2.0 anyway. They had already passed on the idea and Netscape was already making money.
    • I have a new idea for Slashdot moderation points: -1 (RTFA). The article is about launching new web services, not new standalone software products. Not to mention that even taking standalone products into account, Netscape is a bad counter example. Microsoft was slow to wake up and smell the Internet, not Netscape. Once Bill Gates got the importance of the Internet, it was all over, regardless of how long Netscape Navigator had been out there.
  • Meeting VCs (Score:5, Interesting)

    by winkydink ( 650484 ) * <sv.dude@gmail.com> on Monday June 20, 2005 @01:52PM (#12865548) Homepage Journal
    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.
    • Hmm... this seems to be misplaced. But, a response is a response. :-)

      Call or write them and ask for a meeting.

      Mmm... call who? That's the key issue. As I said, all the VCs and angels in the public eye are targetted toward minority groups of some sort.

      Oh, if you want them to sign an NDA, forget it. Almost never happens.

      Indeed. If anyone wants to get into business, the first thing they need to learn is that their idea is the least important of your concerns. It's all in the execution of the business m
      • Re:Meeting VCs (Score:3, Interesting)

        by winkydink ( 650484 ) *
        Sorry, replied in the wrong spot.

        Take a look at http://www.sequoiacap.com/ [sequoiacap.com] and http://www.usvp.com/ [usvp.com] for two examples. If you can't figure out how to contact a VC from there, you have larger problems to deal with. I don't see any references on either site to "ethnics only, no whites".

      • Mmm... call who? That's the key issue. As I said, all the VCs and angels in the public eye are targetted toward minority groups of some sort.

        You're not looking hard enough. None of the big VC funds are targeted at minority groups, and most angel groups (at least the ones that survived the 1998-2002 squeeze-out) are more industry-focused than Section 8a-focused.

        If you don't know a VC personally, start by surfing the "About our company" and "Our Board of Directors" pages for companies that are in the sam

    • A better chance of getting a meeting is by networking. If you know someone (who knows someone) that's gotten venture funding, ask them for a reference. Most VC get there leads on new businesses from referals.
    • by EricTheGreen ( 223110 ) on Monday June 20, 2005 @03:30PM (#12866446) Homepage
      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!

    • Re:Meeting VCs (Score:3, Informative)

      by odin53 ( 207172 )
      It's true, there's a lot of money out there. The easiest way to connect to VCs is through networking. If you don't have personal contacts, the easiest way to network is by retaining a law firm that represents a lot of VCs and venture-backed companies. I'm constantly reminded by our VC clients to send them potential investments. (I like my anonymity here, so I'm not going to name my firm.)
    • Oh, if you want them to sign an NDA, forget it. Almost never happens.

      If your idea is such that if explaining it to an investor would "give away the secret," then you probably don't have something worth their time anyways.

      • Oh, if you want them to sign an NDA, forget it. Almost never happens.

        If your idea is such that if explaining it to an investor would "give away the secret," then you probably don't have something worth their time anyways.

        Besides, that sort of idea is what Submarine Patents [wikipedia.org] are for. </snark>
  • by strongmace ( 890237 ) on Monday June 20, 2005 @01:52PM (#12865554)
    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.
    • by fishbowl ( 7759 ) on Monday June 20, 2005 @01:58PM (#12865611)
      >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.
      • Good for the investors and execs, bad for everyone else who would rather have a job than a severence package.

        If an acquisition brings you a severance package, you weren't contributing value to the company before it was sold. People who are important to a startup's business get brought forward, and should also be rewarded via stock options, etc. People who aren't important to a startup shouldn't have been hired in the first place - the startup phase is not the time to bring on folks you don't need.

  • gdfhdfh (Score:2, Interesting)

    by radiumhahn ( 631215 )
    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.
    • Re:gdfhdfh (Score:4, Insightful)

      by Peyna ( 14792 ) on Monday June 20, 2005 @02:20PM (#12865791) Homepage
      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.

  • Yes. They do. (Score:2, Interesting)

    by stagmeister ( 575321 )
    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
  • by chia_monkey ( 593501 ) on Monday June 20, 2005 @01:58PM (#12865609) Journal
    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".
    • by Anonymous Coward
      This is very true.

      But sadly, the Patent Reform Act of 2005 is attempting to undermine the beneficial aspects of patents so that all we have left are the undesirable aspects we've complained about for so long.

      If passed, the reform will put a cap of $1,000,000 or $5,000,000 on damages. The first cap for intentional and willful breach of patents and the second cap for particularly bad cases involving intent to defraud.

      Think about the impact of this. Patents will no longer be a deterrant for big companies.
    • Huh? The whole point of patents is to *force* disclosure, in exchange for short-term ownership of the invention. It's precisely to avoid the concern you mention.

      (Not that I think business model patents are a good idea, just that his understanding of them is completely backwards...)

    • As I commented above, this is especially true with hardware companies. A startup might need to setup fabrication facilities, get all their test&measurement hardware ready and work out the kinks, while the big guys don't have these steps to do.

      Startups begin with small pools of capital, but big guys have alot more. Of the people I've known to go into hardware startups, all of them had to be very secretive because companies like Lucent, if they found out what they were working on, could have swung som

  • by NotQuiteReal ( 608241 ) on Monday June 20, 2005 @02:01PM (#12865636) Journal
    1) Get a really a great and clever idea and patent it.

    2) Wait for someone else to actually make it or something vaguely like it work.

    3) [have your lawers knock on their door] Profit!

  • All or nothing (Score:5, Interesting)

    by wishus ( 174405 ) on Monday June 20, 2005 @02:02PM (#12865655) Journal
    Well, it doesn't have to be all or nothing. I didn't want to advertise my game, Warband 1066 [warband1066.com], 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.
  • by starfishsystems ( 834319 ) on Monday June 20, 2005 @02:02PM (#12865657) Homepage
    Take for example Sxip [sxip.com] which is developing an identity management infrastructure.

    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."

    • Is pointy-haired-manager language among your company's merits? Sorry, I couldn't resist commenting on your website's marketing statement.

      "Sxip [HARD-TO-PROUNCE BRAND WORD] Identity provides identity management solutions [MEANINGLESS BUZZWORD] that leverage [NOT A VERB] the Sxip Network [BUZZWORD] and drive Identity 2.0 infrastructure [BUZZWORD]. Sxip empowers [BUZZWORD] individuals to create and manage their online digital identities and enables enterprises to instantly provision [NOT A VERB] and manage th
    • From TF web site:

      Sxip Identity provides identity management solutions that leverage the Sxip Network and drive Identity 2.0 infrastructure.

      So.... you mean that.... Sxip does... oh, it needs more Sxip stuff to work...? huh?

      Sxip empowers individuals to create and manage their online digital identities and enables enterprises to instantly provision and manage their users.

      In other words, Sxip provide a branded CMS?? What's hot about this?

      I still do not understand why VC companies use all this wordin

    • Horrible Example (Score:4, Insightful)

      by Vagary ( 21383 ) <jawarrenNO@SPAMgmail.com> on Monday June 20, 2005 @03:35PM (#12866497) Journal
      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.
    • Since two out of two followups have both mistakenly assumed that I speak for Sxip Networks, I offer a clarification.

      I'm not associated with Sxip in any way. I happen to be interested in identity management, that's all. Sxip is a player in that space.

      Also, while we're at it:

      • Identity management is not a meaningless buzzword but is instead an established field of software engineering. It delivers one critical element required to securely integrate and extend a set of distributed systems. It can be
  • The rules... (Score:4, Insightful)

    by Duncan3 ( 10537 ) on Monday June 20, 2005 @02:03PM (#12865661) Homepage
    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.
  • 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
    • 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
  • There's a big difference between being stealthy to make a good first impression and being stealthy to hide a poor solution.
  • 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.
    • Sill, I would assume you are talking with potential customers, looking for beta testers, etc. and getting feedback about possible needs that they have.

      For example....

      My firm was working on a hotel reservation management package. However after talking with hotels, we decided that they were unlikely to adopt the package. If you don't talk with your perspective customers, how do you know whether they are likely to use your product or service?
  • by frankie ( 91710 ) on Monday June 20, 2005 @02:09PM (#12865712) Journal
    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.
    • Usually it's cheaper to look at history than to rediscover problems others have already found. Most entrepreneurs would prefer not to spend their time and money creating start-ups that will fail.
    • I don't understand your point, Francis. Crappy products don't do well in a free market (is that really it)? No entrepreneur starts a company thinking his product sucks; they try to make everything line up in their favor to be successful. How and when a new company and product are presented is certainly among the top 10 most important factors to consider.

      I don't see why this kind of discussion is "pointless".

  • Not necessarily (Score:4, Interesting)

    by benjamindees ( 441808 ) on Monday June 20, 2005 @02:11PM (#12865723) Homepage
    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.
  • by ianscot ( 591483 ) on Monday June 20, 2005 @02:12PM (#12865727)
    This story would be analogous to saying "Small, vanity press publications suck" or "mass market paperbacks suck." For the wrong purpose or the wrong people, anything sucks.

    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.)

  • Phantom [phantom.net] startups?

    Sorry ... sorry ...
  • 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"
  • Open source motto (Score:3, Insightful)

    by Spy der Mann ( 805235 ) <spydermann...slashdot@@@gmail...com> on Monday June 20, 2005 @02:25PM (#12865831) Homepage Journal
    Release early, release often.
    This process is also known as "beta".
  • 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!
    • I'm not worried about someone bigger stealing my ideas anymore.
      I also steered a failure startup and crashed it because I wanted to perfect the product untill we had no more money left for marketing. It was an user friendly intrusion detection system without a firewall. Auto config firewall was planned for the 2.0. The network security business was next to none those days and I thought I had something so special that no-one should know about it before I had something to sell.

      Small team can develop a product
  • by mikkom ( 714956 ) on Monday June 20, 2005 @02:35PM (#12865894) Homepage
    But creating a new web service is not rocket science and does not take a lot of time or money. 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.
    What an utter bull%&#!

    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.
  • Feedback is great! (Score:2, Interesting)

    by 3cents ( 741537 )
    I agree with the article, I have posted my senior year project here [slashrank.org] 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
  • I don't think it's fair to say that stealth start-ups suck 100% of the time. Fletcher does make some good points, and he's certainly right in some cases.

    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

  • by Anonymous Coward
    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 che
  • 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.

  • Jeff Clavier [softtechvc.com] has a very interesting counter to this argument.

    An exerpt:
    http://blog.softtechvc.com/2005/06/stealth_start up.html

    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 f

  • by IHateSlashDot ( 823890 ) on Monday June 20, 2005 @03:04PM (#12866205)
    I'm currently on my 6th startup and can say that this article is not very accurate (yes, I've taken one from the beginning all the way through public offering). There are plenty of reasons to start off in stealth mode.

    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.

    • Great point. Were those six startups all web startups? Or were some of them software or hardware startups?

      Mark's argument might be a bit stronger for web startups, especially the kind of web startups that benefit from engaging a large community of users.
  • by presearch ( 214913 ) on Monday June 20, 2005 @03:06PM (#12866220)
    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.

  • obquote (Score:4, Funny)

    by sshore ( 50665 ) on Monday June 20, 2005 @03:08PM (#12866250)
    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
  • Redux (Score:5, Insightful)

    by DingerX ( 847589 ) on Monday June 20, 2005 @03:13PM (#12866292) Journal
    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.
  • ...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.
  • by MSBob ( 307239 ) on Monday June 20, 2005 @05:03PM (#12867248)
    I did. Between 2000 and 2003. What a disaster that was.

    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.

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