Ask YC: Why are startups secretive?

https://news.ycombinator.com/item?id=113057

by rzwitserloot • 18 years ago

13 55 18 years ago

news.ycombinator.com

Startups tend to be secretive. Some are secretive about their startup plan ('stealth mode'). Most are secretive about for example number of (active) users.

I wonder why that is. There are definitely more ideas floating around than capable entrepreneurs, which suggests that spilling the beans on your idea isn't a big risk. Being secretive about your statistics is even more confusing to me. Is there some sort of upside to valuation that I'm missing?

johnrob3• 18 years ago

I think there is a catch 22 when revealing your start up idea. Imagine if you posted it on this site. You'd end up with two scenarios:

- Nobody liked it. Your idea is probably unspectacular.

- People responded well to it. Your idea, which just got validated, is now also available for public consumption. This is troubling because the idea also has a stream of positive comments, making it that much more attractive.

Neither of these outcomes are good, which is probably why start-ups are secretive.

webwright4• 18 years ago

"- People responded well to it. Your idea, which just got validated, is now also available for public consumption. This is troubling because the idea also has a stream of positive comments, making it that much more attractive."

You should add to that what REALLY happens when people respond to it. They start talking about it. They bury you in great ideas that never occurred to you. They sign up to be notified about your private beta. You are incredibly energized and motivated all of a sudden. You are no longer fearful that your idea will totally fall flat. Recruiting gets easier. Good developers who are interested in your problem/space seek you out. Investors (who know all of this) don't think you are a total noobcake. You don't have to invest time or money in stuff like NDAs or other secretive measures.

Stealth mode is 95% of the time totally ridiculous, with the risk of being out there totally eclipsed by the reward. There is the 5% case, I suppose, where you've truly invented something unique rather than just making something suck less.

I'm also absolutely FLOORED by your statement that the "...Nobody liked it. Your idea is probably unspectacular." scenario is not a good outcome. That's a spectacular outcome compared to pissing away months or years building something that you later realize nobody wants.

(IMO)

johnrob3• 18 years ago

I agree with all of your (webwright's) points. However, I was trying to explain people's behavior rather than highlight what logically makes the most sense.

tptacek2• 18 years ago

Awareness is only really valuable if you're in a position to capitalize on it. Has it been super valuable to RescueTime? You're still 3 "owner-operators", plus "the occasional contractor". It obviously hasn't solved your recruiting problems. From what I can tell, you've "closed" a "round" of YC funding. Got a real term sheet yet? Did awareness do it for you?

I'm not trying to be petulant.

For you guys, awareness may convert directly into users, and users to a shot at VC funding (though, if you're up and running already, god I hope not).

And on the flip side, in my field (security), there's an obvious need for secrecy; we're a bunch of cutthroat motherfuckers over here. So my experience doesn't translate to yours directly.

Just saying, the answers to questions like these aren't always straightforward.

jamesbritt2• 18 years ago

"You should add to that what REALLY happens when people respond to it. "

On what do you base this claim? Can you, for example, point to several threads here where someone declared the plans of their startup and there was a strong, valuable response leading to favorable business results?

The "Don't bother with secrets" meme is something of a permathread, but there seems to be scant tangible evidence for what many people claim (either for or against keeping mum).

tptacek2• 18 years ago

I can give you two good reasons for being secretive that you may not have considered:

* If you're entering a competitive space --- and particularly if you have a direct sales model with medium-long sales cycle (ie, you sell to companies) --- your competitors can neutralize you without copying your features. All a company with a shipping product has to do is "roadmap" your features for you to lose competitive advantage.

* There's what Joel calls "The Marimba Effect". As long as you keep quiet about what you're doing, your failures and missteps don't count against you. Once you launch, prospects can start to form an opinion that's hard to shake off.

I can't say that these are dealbreakers if you're starting some social calendaring service for pets, or (like most YC'ers) considering some kind of social network code autoindentation product for MzSchemers. But we are not awash in examples of companies that opened up early, launched small, and went on to huge success.

johnrob3• 18 years ago

If your startup is hovering near another more established one, outing the idea could lead competition quickly. I find this to be particularly true for facebook applications. There are several powerful companies that have the reach and the expertise to quickly clone your idea and beat you to it.

mechanical_fish• 18 years ago

I think the Marimba Effect is the key point. You've highlighted a problem with the original submitter's question: It focuses too much on how the competitors will react when you announce an idea before shipping a product, whereas the primary concern should be how the customers will react.

I just watched a talk by Mac developer Wil Shipley, whose advice is "Don't announce until it can be downloaded. Don't let it be downloaded until it can be bought." Otherwise you spoil a lot of perfectly good hype.

There are, of course, some exceptions to this rule in the webapp world -- for example, if you're starting Ptacek's social calendar for pets, you can't even build the product without having customers, since social networks without members are completely useless. So you're forced to bootstrap.

DarrenStuart3• 18 years ago

In this day and age its fairly easy to take a concept and build it out for little outlay.

sanj• 18 years ago

Does that explain all of the posts on this site saying "we're looking for a hacker!!"?

And lack of any saying "We're looking for a business idea guy!"?

imsteve• 18 years ago

So easy, and yet only one in 100,000 people can be troubled to do it.

bitsantos• 18 years ago

And with 6 billion people in the world, that would mean that there are about 60,000 people who can be troubled to do it. :P

pg4• 18 years ago

I don't think it is, or probably ever will be. There are always 1000 details you have to get right.

I'm suspicious of projects described by appending that word "out" after "build." It implies the speaker is underestimating the importance of execution. In the best projects, execution is not merely important, but even flows back into design.

DarrenStuart3• 18 years ago

If the idea is extremely simple and your team has talent then you could do a better job with someones idea than they could.

I think build out is perfectly valid way to explain building more functionality on a idea.

google didn't build ad functionality into from the start their search engine it was built out afterwards. I come from a family of builders so this makes sense to me.

I also don't agree with being secretive, ideas are a dime a dozen so no need not to share.

NSX29• 18 years ago

People are secretive so they can avoid the likes of a Marc Andreeson or a Mark Zuckerburg. As you can plainly see, despite all the talk of "honor" and "our reputation is the basis for our business" and not dealing with companies that are being sued under suspicious circumstances, etc., even "top-tier" VC firms will put their stated ethics aside and jump into bed with the money makers, regardless of how they came to be that way. Who the heck wants to go around for the rest of their life wondering "what could have been" if they kept their mouths shut. And here's a little clue - just because VCs tell you they think you're a noob for using NDAs, doesn't mean they respect you for mindlessly taking their advice. Learn to think for yourself. What would you rather invest in, as a VC - a guy who's taken measures to ensure that everyone who knows about the idea is either part of it or prevented from copying it, or a guy who spoke about the idea with 100 programmers who may very well be trying to secretly implement it behind his back even though they pretended not to be intested? It's called control, and when you're starting up, it's one of the few things that are actually "in your control".

theoneill• 18 years ago

I know what Zuckerberg is supposed to have done, but what did Pmarca do that was iffy?

NSX29• 18 years ago

Well, he was a student, one of quite a few, working on the base code of what became Netscape Navigator. One weekend when nobody was around he decided he wanted more out of the project than research credit, so he let himself into the research lab when nobody was around, copied everyone else's code and took off to get VC funding. Later he would dismiss the whole thing in typicall dirtbag fashion, ie, "Well, you know, it's hard to recall who wrote what code, and what counts was I got it out to market first, etc." So basically he stole somebody else's work, took credit for it, and then hid behind the legitimacy that financial success brings in this country.

lanceusa• 18 years ago

Here is my personal opinion:

I've been working on a project now for almost 5 months. I've been more free to discuss my project lately because I think to myself that most are not going to be as motivated as I've been nor are they going to sacrifice the long hours and weekends I've poured into it.

I commend the creator of Pageflakes...if you read this guy's blog or articles the guy practically hands it to you on a plate...yet I haven't seen many take advantage of it. Except maybe Yahoo :).

I also believe that if your passionate about your idea you don't want it contaminated with others ideas and views. Now, this definitely plays a role in the future phases, but in the beginning you want to create your own idea...not someone elses. We all want the credit, so we keep it under wraps until the time is right.

ubudesign2• 18 years ago

I've been doing the same thing for the past 6 months. I agree. I guess the details of an idea is what I would care most about before the release. I wouldn't mind sharing my overall idea with a few people just to see what details they have in mind. If it's good, I'd ask them to be my partner. And if they take the idea and develop it into something better then me, then so be it. they deserve it more.

mattmaroon• 18 years ago

Mostly out of unthinking reflex and herd mentality. Startups are secretive because past startups were secretive.

There certainly are benefits to it in some cases, but in most it's probably best to just open your doors ASAP.

trekker7• 18 years ago

Are there really lots of great ideas floating around, more than we can all use? If so, please tell me two or three!

ubudesign2• 18 years ago

I have too many ideas and not much time to develop them all. If you narrow down what area you are more interested in and what your skills are I'll give you some of my ideas

tx• 18 years ago

Just pay attention to what you are reading. The problem of micro-payments has been voiced many times on YC news, PG himself mentioned it in one of his writings. Yet it took forever for TipJoy to materialize.

Why? Because of all the details. When I first saw this obvious micro-payments problem I thought about it for about 30 seconds but did not come up with anything significantly different than PayPal. I moved on, but someone decided to spend more than 30 seconds on it.

nostrademons3• 18 years ago

Most are not. I've been amazed at how much various startup founders have been willing to share.

Most, however, are selective as to who, what, and how they reveal. If you've met a few times with a startup founder and gotten to know them, they'll tell you a lot about their future plans. It's great to get feedback, after all. You're expected not to blab that info about, but that's why they bothered to get to know you before telling you stuff.

There's no point to indiscriminately spewing your vaporware all over the Internet. If you don't have a demo or UI for people to react to, you probably won't even get good feedback, and it'll lessen the impact when you actually do launch (case in point: Arc). But if you do have something for people to react to, or you have people in a similar space that know your target market, you can gain quite a bit from sharing your idea.

TheTarquin• 18 years ago

As Howard Aiken said: "Don't worry about people stealing an idea. If it's original, you will have to ram it down their throats."

That being said, previous commenters have pointed out that getting ideas stolen isn't exactly the point.

Yeah, okay, so this comment is basically an excuse for me to spout a favored quote, but really, it's one that's definitely helped me get over secrecy paranoia in developing my own ideas.

a-priori• 18 years ago

As someone who's been working in a "stealth mode" startup for the last few months, I can relate. It wasn't my idea to work this way, but my partner insisted. The reasoning is that there's two parts to the business and the other part, the non-technical one, won't be ready for public consumption for a while yet. Disclosing it now, when we won't be ready to fully launch for a relatively long time, could be disasterous. As mechanical_fish said, we'd lose a lot of perfectly good hype.

Mind you, I'd love nothing more to be able to answer people openly when they ask, "so what are you working on anyways?"

pg4• 18 years ago

Though inexperienced founders usually err too much in the direction of secrecy, it does have its uses. For example, because they didn't talk too much about what they were doing, Justin.TV was able to catch Ustream napping when they launched. Ustream had to frantically launch the next day with something that was way behind JTV's technology.

pyrillix• 18 years ago

Interesting commentary but not factually accurate, Ustream actually was ahead of JTV in its launch. JTV has found a comfortableniche in lifecasting which was never Ustream's business model. Virtually every feature found on live video sites was a response to Ustreams features. You only assume the founder were inexperienced because you havent really delved into their history, try again..

jackdied• 18 years ago

For the same reason that open source projects are started by one guy with running code and not by committees talking about what to do. Everyone with an opinion isn't necessarily your customer - they are just guys with opinions.

You could be non-secretive without being interactive or not taking opinions. But that seems like burning PR early for a product you will be releasing soon anyway.

Do talk with people who's opinions you already value. But you aren't Microsoft so pre-announcing a product won't intimidate others into not competing with you and it won't whet potential customer's appetite. Make something you know you would use and then see how others like you respond.

samwise• 18 years ago

There is HUGE difference between talking to people you meet and posting your idea(s) on the internet.

However most entrepreneurs seek a one solution fits all and try to follow the foot steps of others success. When in reality every idea/start up is different and what might work for one startup will kill the other.

Ask YC: Why are startups secretive?

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