Pros and Cons of Stealth Mode Startups
Point and counterpoint around Mark Fletcher’s (CEO of Bloglines) post last week, “Stealth Startups Suck“.
Here’s a sample of Mark’s post:
Why go fast? Many reasons:
First mover advantage is important. 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. It forces you to focus on the key functionality of the site. 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. The sooner you get something out there, the sooner you’ll start getting feedback from users. …
Some people think that they need to stay in stealth mode as long as possible to protect their exciting new idea. I hate to break the news to you, but unless you’re Einstein or Gallileo, your idea probably isn’t new. I have this theory. The success of a web service is inversely proportional to the secrecy that surrounded its development. There are exceptions of course. But I also think this can be applied to other things. Segway, anyone?
Paul Kedrosky (Ventures West and UCSD) has written a good counterpoint, “Stealth Mode Startups Don’t Suck“.
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.
More from Mark Fletcher here, also see Russell Beatty’s Yeah, They Are Nice People
Anyway, it’s not like 24 Hour Laundry needed any more buzz. But the discussion about the value of collaborative development, marketing and validating with early users, vs. handing over precooked plans to a competing team illustrates some tradeoffs that are especially pronounced for new web businesses.
Stealth mode can be a lame excuse for not shipping to real customers, but it can also keep your worked-out user web interaction model from being used as the engineering model for a team of offshore coders that otherwise wouldn’t be able to put together the design spec. On the marketing and alliances side, it’s less useful to be in true stealth mode, since you’ve pretty much got to tell your prospective partners and customers what you’re about if you want to sell with them.
update 2005-06-20 14:34 comments from Jeff Clavier, plus the Slashdot crowd weighs in.
update 2005-10-04 17:12 PDT 24 Hour Laundry is Ning
Tags: ning, startup, marketing
