Stealth Start-Ups Suck ? Yeah, right.

I have genuine respect for Mark Fletcher and what he has accomplished with ONEList and Bloglines, and therefore consider that he has credibility when writing about entrepreneurship. His ETech presentation on the topic was actually very practical and interesting. That's why I was surprised with  the title and the content of his post: Stealth Start-Ups Suck. Because in most startup cases, I believe in the contrary.

Mark contends:

[...] Here's the thing, stealth mode for a web start-up is the kiss of death.

Stealth mode is when a company is operating in secret for some length of time before launching their product or service. In many industries, creating a new product or service takes significant time and effort. During this time, being in stealth mode may make a lot of sense. 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. 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.

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.

[...]

Why is this post a dangerous generalization ? Because this "advice" only applies to certain types of startups, in certain markets/features, led by certain teams. Mark's "3 months to build" rule does not work with companies having to develop "deep IP" algorithms and complex implementations.

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 for a while, or for good. And will certainly not generate the positive buzz that is required for viral marketing to work.

The second argument for laying low is that your ideas might not be unique, but your overall product approach, and implementation, might be - for a period of time. Since very early stage startups generally don't have a lot of development "manpower", coming out of the closet too early might make it very easy for competitors to replicate some of these (good) ideas.

There might cases where Mark's suggestion is applicable, but I don't see them as being majority. And then I would ask whether these companies are the ones that are "built to flip".

Update: Paul Kedrosky also disagrees.

I have been browsing through the Slashdot thread on the topic, and there seems to be a bit of confusion around building 1) a startup in stealth mode and 2) being open and leveraging standards, 3) engaging with customers/users and 4) using a short/iterative production cycle.

I am advocating that not being stealth until the product is in some form of alpha or pre-alpha form is only applicable to a portion of the startups out there. These might be open source (Monty Widenius announced his intention to build an o/s SQL database to gather requirements, and co-development support), category creators or first movers (like Bloglines as a Web-based RSS readers "for the masses"), etc. Feel free to suggest any other "non stealth mode" candidate.

But I am totally for 2), 3), and 4) as characteristics of early stage startups.

Update: Just came across the account from SiliconBeat on the whole 24 Hour Laundry "saga". Be sure to check the comment left by Gina Bianchini, the CEO of 24HL.

And let's leave them in (stealth) peace.

Comments

[Eric Rice]

Could it be the issue is not that the 'stealth' startup that sucks, but the over-hyped nature of things? Think of recent examples of hype with no product.

I don't necessarily think stealth sucks, but once upon the time, you followed certain rules with software development and release. And if it's stealth, you'd keep your mouth shut.

But then that would be old-fashioned thinking, now, wouldn't it? ;-)

[Dennis Howlett]

It can work both ways buyt Jeff is largely correct. As a software reviewer there's nothing more guaranteed to be a turn off than something that's incomplete, unstable or lacking in 'obvious' features.