Stealth Startups, Get Over Yourselves: Nobody Cares About Your Secrets

http://www.techcrunch.com/2009/12/19/stealth-startupsget-over-yourselves-nobody-cares-about-your-secrets/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+(TechCrunch)&utm_content=My+Yahoo

by edw519 • 17 years ago

46 34 17 years ago

techcrunch.com

Mz2• 17 years ago

If you’re competing with the big guys and are worried about them stealing your ideas, it’s the same story—it boils down to execution. As Eric Reis says, “If a startup can’t innovate faster than a much larger competitor, stealth isn’t going to make the difference —they’re toast”. It may also be that fear of big companies is overblown: those who have worked for one know that it’s incredibly hard to get a manager at a big company to do something new, even if your goal is to give your ideas away.

I really don't worry that someone will steal my idea(s). I don't think it is stealable. But even if I did, I wouldn't worry that a big company would steal it. As I understand it, Bill Gates got rich doing something IBM basically gave away to him.

The only worry I have about big companies is a paranoid fear that stuff I do on the web might some day get me fired from my current job before I am ready to support myself via my off-hours activities. So I try to not do any of the things that have gotten other people fired from big companies over online activities (like talk trash about the company I work for).

pxlpshr2• 17 years ago

TechCrunch likes to stir the pot and create controversy, but I do get tired of them acting like they do no wrong. Maybe it's just me but I rarely see them mocking themselves. As mentioned in the comments by another entrepreneur:

When I launched OtherInbox at TechCrunch50 in 2008, being “stealth” was a requirement for participation. We had to be launching something new that no one had heard about and secrecy was so important that we were told that we would be kicked out if anything leaked.

Maybe this should be reconsidered for 2010?

However, I do partly agree with the article. Some people are wayy to tight lipped about what they are working on, there's rarely a reason why someone can't speak in generalities about their project without going into exact details.

j_baker2• 17 years ago

Controversy gets attention. I mean, say what you will about it, but I'd like to point out that you did at least look at the article if not read it.

sachinag• 17 years ago

I think you miss how TechCrunch becomes a town square on the weekends with guest posts by contributors. As the comment you cite points out, surely Arrington would disagree with Vivek, at least as far as TC50 is concerned. Perhaps he would tie himself in knots to agree with Vivek aside from the awesomeness that is TC50, but the idea that TechCrunch is just Arrington's voice at this point is a bit off the mark.

And it's not just TechCrunch. Henry Blodget doesn't agree with everything Frommer writes at TBI, Dean and Matt at VentureBeat don't even write about the same stuff, and so on.

wheels• 17 years ago

That's a sign of a maturing media outlet. Wouldn't it be bizarre if the New York Times never had differing opinion pieces?

(Note: I'm not putting TC and the NYT in the same bucket, but this is a bad point to call them out on.)

pxlpshr2• 17 years ago

Good point. My comment was also in regard to other stories I've read there, I just opted not to go into too many details for the sake of staying on topic.

icey• 17 years ago

I'm not sure why, but this seems funny to me in light of all the Crunchpad / joojoo shenanigans going on.

vaksel• 17 years ago

stealth doesn't mean you don't show your product to anyone, stealth means you don't show your product publicly until you have the bare minimum ready.

j_baker2• 17 years ago

I think another big factor is that a lot of startups simply might not know exactly what they want to do. They don't say anything to the outside world because they themselves don't know.

jasonlbaptiste• 17 years ago

Being stealth is seriously a detriment most of the time, if not all. Get out there and start getting feedback while meeting awesome people who are interested in what you're doing. You never know who you will be connected with or who will share your passion. You can only meet those people by putting yourself out there. It's not like you have to put your source code, algorithm, and five year road map out there for everyone. Even if you did do that... what are the odds that someone is interested in the same thing, has the same vision, is competent enough to execute on it, and most importantly actually DO IT? The odds are a number somewhere very very close to zero, whereas the odds of putting yourself out there and meeting someone who can help you are very very close to one-hundred.

10ren• 17 years ago

Another good reason to be in stealth is if a company is built around a technology or idea that it hopes to patent but has not yet filed.

I think this exception can be generalized to pure technology development, even without the patent legal requirement of non-disclosure. It applies if you are developing a new technology that already has a known market; or an entirely new technology (in which case you are more an inventor or scientist than an entrepreneur). So, Edison got his light-bulb working well enough; Birdseye discovered the freezing rate for fish that worked well enough.

Of course, most internet startups are not pure technology. They're mostly about market development, and at best, applying technology to that new market.

A final factor is that, even for pure technology, it helps if you can discuss it with someone. So it's good to have a team. This is one benefit of working in a big corp lab.

vlad• 17 years ago

The headline does not do the article justice.

zaidf3• 17 years ago

The smartest guys give the illusion that they are very open. But that is only because they have so much to share, they can keep talking(without being boring) and yet not get to the stuff that can really hurt them. That has been my experience.

Make no mistake, even the biggest preachers of being open withheld information. I'd like to see a more nuanced discussion about what to share and what not to.

newhouseb2• 17 years ago

I fall largely into the bucket of "if you can give away your idea in one sentence, then you're toast" but I personally break down my projects into three parts:

1. The idea itself in the way you'd present it to the layman

2. The engineering problems you face in implementing the idea

3. The solution to said problems

You can come off as being "open" by disclosing only the first part. If another person overhears (1) in your discussion, in order to implement the idea they first need to figure out (2) what makes it hard before even (3) devoting resources to solving the problem. And how you approach (2) and (3) in addition to just (1) is what determines success (read: execution). Note that I am making an assumption that whatever you're working on requires actual engineering.

So for the example of Google,

1) A search engine that lets you find stuff

2) Relevance is really freakin' hard

3) PageRank

None of this of course applies to negotiations with VCs, where the rules turn on their head and you don't want to make yourselves look like you are effortlessly delivering solutions. And unless you're looking for a certain type of leverage, acknowledging the fact that negotiations exist to other people is probably a bad idea too.

zaidf3• 17 years ago

Well put.

I gauge how much to share from person to person, or even town to town. I know being in a college town, I can get away with sharing a lot more, even down to the details because it is rare I am talking to someone who has the motivation or skill to even try to execute.

The same would not be true in Frisco where I know there are serious executors and I'd be a little more wary of the depth I go into.

I have this perspective because I am someone who regularly gets great ideas from listening to other folks talk. I am surprised by the depth they go into and as a consumer, welcome it! But if I were in their shoes, I am not sure I'd share the same information.

Having said all this, very few people anywhere will say that I am a secretive guy. I just try to be deliberate about what I share. I also believe in reciprocation, especially with numbers. And I am happy to lead.

gruseom3• 17 years ago

Great comment, as is the parent. But I'd question your Google history. PageRank was talked about from the beginning. The list went more like this:

1. Hey everybody, check out this new search engine with a genius algorithm called "PageRank" that returns much more relevant results!

2. ?

3. ?

In other words, Google is a prime example of what zaidf is saying. PageRank was a huge marketing hit. Over 10 years later, it's still the first thing anyone mentions when they talk about Google's competitive edge, yet this has been a fiction for ages and may largely have been so from the beginning. How much of a technical edge was it really, compared to the other things Google did right? That remains totally obscure (see 2 and 3 above).

Mz2• 17 years ago

Some thing I made sure to not mention publicly: The exact domain name I planned to buy for several months before getting around to it. Anyone could have bought it and squatted on it if I had mentioned it publicly. Only a few people close to me knew what it was while I developed a new site without having a domain name. I did spend some time wondering if that was really the right name while I worked on developing the site idea and eventually decided it was.

As I have stated here previously, one of my plans is to learn a programming language and write a simulation for my health site. I don't think it can be stolen because it will be rooted in the things I do for my own health -- ie it is rooted in first-hand personal life experience. Even if someone stole the general idea to create a "game" to help people with wellness, I don't think they could really steal my idea to create a game to help people with my diagnosis get healthier. I know plenty of people doing alternative stuff and seeing better than average results. I don't know anyone who has had the kind of results I and my son have had. So I don't think anyone else knows what I know, therefore any other simulation would not contain the mental models I have in my head. Thus, I don't worry about that.

On the other hand, I mostly talk about that plan here and have also mentioned it in passing on a health list for a different type of medical condition. I don't think I have mentioned it on any of the CF lists I belong to. I think it would get point-and-laugh type reactions: "Yeah, sure, you are going to cure my deadly medical condition by having me play a video game. Har-dee-har-har." I also have no idea how long it will take me to implement. I have yet to even learn any code. So that is another reason I am keeping that plan to myself in the communities where a few people might be interested in it. I don't want people to be tired of hearing "empty promises" by the time I actually implement it.

baguasquirrel• 17 years ago

Saying that you're stealth is actually a great excuse to not have to spend half an hour yakking to people when you actually want to code.

Goladus• 17 years ago

Yeah that was my first thought after reading that cartoon.

DaniFong• 17 years ago

While I think this can be great advice in the internet space, there's a pretty big difference between having a consumer product pre-vc funding which you can bootstrap to a release, and a biotech or cleantech based startup post-funding with roughly a dozen serious potential customers.

tonystubblebine• 17 years ago

To provide some balance, does anyone here have any positive experiences with being in stealth mode?

I have one. We launched Twttr in a stealth private beta for at least a few months. I think the period coincided with the period it took to get an official SMS short code. During the stealth period we were serving SMS traffic out of an SMS modem attached to an office laptop. We got the normal benefit of polishing the product that you'd get from a private beta. Plus we got to develop the product without any public scrutiny. But we were very conservative about who we let know about the project, basically close friends and family who didn't work for a major internet company.

I think the hardest part about changing your product strategy is going back on your promises (in our case we'd promised customers, investors, and employees that we were going to build a world-changing podcast product). I don't know if it would have been fatal, but it definitely would have been uncomfortable to be accused of abandoning our initial product before knowing we had a success (and contrary to some statements, there were a big chunk of internal users who knew we had something important from the first day we used it).

DanielBMarkham• 17 years ago

Lots of successful startups spend time in stealth mode.

As another commenter pointed out, it's a lot more nuanced than writers want to let on. Writing is about drama and hyperbole. Real life is about finding balance.

davidmurphy• 17 years ago

Personally I like nuanced writing, too, though.

bjelkeman-again• 17 years ago

Well, stealth has its place. But in the end, you need all the marketing you can get.

bretpiatt• 17 years ago

Summarized real well on Twitter:

@GeorgeReese: The real reason that stealth mode is daft is that there's no such thing as a unique idea.

@GeorgeReese: If your idea is unique, it's very probably a stupid idea.

pg• 17 years ago

The most dangerous part of being in stealth mode for a long time is the long time, not the stealth mode.

If you launch fast, as you should, the question of how secretive to be before launching shrinks in importance.

Our advice is generally: you can tell people about some of your plans, and others you should keep secret, but above all, transform them into actions as soon as possible.

joshuabaer• 17 years ago

Most startups aren't an invention like electricity. Many new companies these days are pretty easy to re-create once you have a working model to look at - ie. a less competent programmer can probably recreate your site in less than half the time it takes you to make it the first time.

Hopefully you have some other competitive advantages besides just having a good idea. It's those things combined with great execution and some luck that will make you succeed. If its that easy to rip off your idea and do it then being first isn't going to that much of a difference compared to execution and some kind of marketing advantage.

What's more interesting to me as an angel investor than the idea is what problem you are trying to solve. Your first idea of the perfect answer is probably wrong, but if you're trying to solve a valuable problem, you're smart, and you have some other competitive advantage then I might be willing to bet that you'll find the right answer.

With OtherInbox we were in 'stealth mode' for 9 months. We had about 200 alpha testers during that time, but our learning accelerated much faster after going public. In hindsight, I think we would have been better off being more open about it right from the beginning.

Note: Just because you're not in stealth mode doesn't mean you have to drop your pants and tell everything. Every company has confidential information and trade secrets.

eru• 17 years ago

> Many new companies these days are pretty easy to re-create once you have a working model to look at - ie. a less competent programmer can probably recreate your site in less than half the time it takes you to make it the first time.

I agree about re-creating the site. But not about re-creating the company. You say yourself:

> We had about 200 alpha testers during that time, but our learning accelerated much faster after going public.

You have to re-create this learning experience, too. Otherwise you may be cloning accidental complexity, but miss the spirit.

Stealth Startups, Get Over Yourselves: Nobody Cares About Your Secrets

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