I came across this article, which rationalizes stealth mode startups. I do agree on some the issues especially so in markets such as Kenya…and Africa in general where funding is not easily accessible.
– First mover advantage is important.
Fair enough. It’s sometimes good to be first. But many times (more?) it’s not-so-good to be first. Look at the history of personal computer industry. Or hard-drives. Or more recently, look at web search tools. In the last case along we chewed through at least five companies, all of whom were in the market long before Google, before Google came along and swept up the market. Don’t get so swept up in your urge for perceived primacy that you launch a product thinking that first-mover advantage is that big a deal. It isn’t.
– There is no such thing as a unique idea. I guarantee that someone else has already thought of your wonderful web service, and is probably way ahead of you. Get over yourself.
Okay, but again, so what? The reason why rational venture capitalists (and some rational entrepreneurs) go the stealth route isn’t necessarily because they think they’re the first ones to do technology X, Y, or Z. Sometimes that’s the case, but more often it’s because they see no need to prematurely advertise what they are doing. Reminding people about an emerging category in a marketplace flush with venture capital is dumb.
– It forces you to focus on the key functionality of the site.
Fine, but it comes at a risk and with tradeoffs. Sometimes it’s a good idea, sometimes it isn’t. See the prior two points.
– Being perfect at launch is an impossible (and unnecessary and even probably detrimental) goal, so don’t bother trying to achieve it. Ship early, ship often.
Fine, but again, this doesn’t preclude stealth. You can ship early and often to a highly-controlled list of users without exiting stealth. Semi companies do it, so do software and web services companies. Shipping early and often is great, but shipping early and often and wide is often just a way to piss off a lot of people quickly.
– The sooner you get something out there, the sooner you’ll start getting feedback from users.
See the prior point. You can get feedback just fine, thanks very much, without exiting stealth prematurely.
I take Mark’s point about stealth & web services companies, and I don’t want to sound utterly enraptured with the whole stealth thing (despite being in the process of selling a stealth company!), because it is a kind of instant ticket to plausible deniability in the venture business (“Oh, we never announced funding a company in that area”).
But you have to keep the role of stealth in context. It is a rational response to a marketplace with too much risk capital, low barriers to entry, and many entrepreneurial teams looking for ideas. Saying that many people will come to variants of the same idea at the same time is not the same thing as saying you should ring a bell and invite everyone and their favorite VCs to come and feast on your nascent startup