On my travels I talk with many startups and occasionally come across a few that are so protective of what they are doing, they are unwilling to even tell you about it – other than how great it will be and how it will change the world! This is often touted as ‘stealth mode’, keep the product under wraps until you are good to go and launch with a bang. Unfortunately this approach is often damaging, to the point where it could be fatal.
There are some valid reasons for remaning in stealth mode, but I’ve yet to meet a startup that falls into any of these categories:
- Competing for VC funds – I have been told that particularly in ‘The Valley’, there are frequently many startups competing for a limited amount of cash. The worry is that someone else gets wind of your idea and uses it to secure investment before you do, cutting off a potential investment partner from you. While this may be true, VCs, as with most investors like to hedge their bets because as any investor knows, you don’t always get it right. If a VC loves your idea but feels for whatever reason that it may not become a success, they may hedge by investing in other teams with very similar ideas. In such scenarios, someone else beating you to the pitch with a similar idea isn’t necessarily going to mean that the investor no longer wants to put money into that sector.
- Too many distractions – If there is something unique about what you are doing that just cannot be ignored, the amount of attention you and your team will receive could prove to be very distracting. This is unlikely to be what you believe is a magical idea, but more likely to be something that the press love, such as involvement from a celebrity. Only people with incredible track records will get hounded when they start talking about their next big thing, recently witnessed by Elon Musk’s talk of the Hyperloop. Who would bet against him failing to deliver?
- You plan to patent your solution – This is not such an issue in the US, but in the UK, if your idea is in the public domain it will prevent you from patenting it. If you believe there is a real chance that you could secure one or more patents, going public would be a mistake. Seek out a patent lawyer, have the patents filed, then start talking about it.
I’m yet to talk with a stealth startup that falls into any of these categories. The overriding reason I am given for operating in stealth is to prevent the idea being stolen so that they are able to gain ‘first mover advantage’. On face value, this may sound like a good reason but the reality is that it is bad decision built upon misconceptions and poor assumptions.
- Your idea is worthless – For me, this is the biggy that is most likely to cause an heated argument. People don’t like being told that their ‘world changer’ has no value but the likelihood is that it doesn’t, and here’s why:
- Other people have already had the same idea. It’s more than likely that there is a team out there now who has already started working on it and they are going to produce something better than you could even possibly imagine. Don’t be naïve in thinking that on a planet of 7 billion people, you are the only one who has thought up this particular idea.
- You will not be first to market – There are no original ideas, we live in a world of gradual evolution and iterations on existing solutions. If you believe you have no competition, then you haven’t looked hard enough.
- My idea is better than yours – There are a plethora of ideas out there right now, and millions of people trying hard to make them work. There are more ideas than there are teams to build them. Better ideas will likely attract higher calibre teams to turn them into reality – and you don’t have the best idea.
- Businesses make money, ideas don’t – Ideas don’t generate revenue and profit; successful, well run businesses do. What’s the best way of making a business successful? Ensure it is run by people who know what they are doing and have a good track record. The success of your idea will be entirely down to the execution of the business and the people that make it happen. Even a poor idea is capable of turning big profits if the business is run well, whereas a great idea will be doomed to fail if good business practices are not followed.
- Your idea isn’t very good – I’m sure you love your idea, but do others feel the same way? It’s no good listening to your family and friends because they will probably just tell you what you want to hear. You need to speak to the people who will actually part with cash for your idea – what do they think? You’ll be surprised to find that no-one seems quite as excited about your idea as you.
- Your idea will not work – There could be a number of reasons for this that you are just not aware of right now. It could be that technically your idea cannot be done. It could be that it doesn’t solve the problem you think it does. It could be that it does solve the problem but people don’t care and would be unwilling to pay for it. Either way, if you are not out there talking to people, you are not going to find out these issues until you’ve already wasted time, effort and money.
- You’re solving the wrong problem – Pivot rates for good startups are high and for good reason. They start out with an assumption, build something to test that assumption, receive feedback, adjust and iterate. In developing a killer product, setting out assuming you are wrong is a good thing because you probably are. We truly don’t know what people want until we try and give it to them, and they don’t know what they want until they try it. Only by following a repeating pattern of build, test, change will you ultimately arrive at a great product.
Hopefully I’ve shed some light about why you should be out there talking to as many people as possible about what you’re doing. You can’t protect yourself from being copied, but don’t worry about it. Back yourself to do a great job, but keep an eye on those competitors because they will be doing some things better than you – steal something back!!!
Yes, very much.