Is Stealth Mode the Right Choice for Your Startup?

stealth

Secrets are hard to keep, everyone knows that. When then, do some startups choose to keep their very essence a secret, a practice referred to in the startup world as “stealth mode”?

In an age where open source technology is a given, and startups are building products and solutions that are collaborative in nature, getting developers to work on a secret business venture may be tough to do. But, despite the challenges that come along with working in stealth mode, many startups still choose it.

Wondering why? So are we! Let’s weigh the pros and cons of launching your startup in stealth mode and see whether it’s the right approach for you!

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The Pro’s

✓ Idea protection

If you are building a startup that will drastically change a vertical, you probably want to keep your idea under wraps. In that case, launching your startup in stealth mode is the best way to ensure that your intellectual property remains protected until you are ready to share it with the world.

✓ Everyone likes a little mystery

The moment your startup is shrouded by an air of mystery, it automatically gains more appeal to the outside world. Alongside the mystery is the ability to be relatively anonymous while in stealth mode. During this time startups can fine tune their strategy, perfect their features, and build a go-to-market plan that is well thought out.  

✓ Avoidance of a pre-buzz hype

One of the major benefits of being in stealth mode is the ability to avoid pre-buzz hype and focus on your product. When startups try to build up buzz while working on a product that is not yet ready for launch, they risk losing focus of the true mission and spending too much time on building the buzz. When in stealth mode, you have the chance to focus on your product without the pressure of meeting expectations.

✓ No time crunch

One of the biggest pros in launching in stealth mode means that you are likely not in a time crunch to launch by a certain date. For startups looking to really perfect their product, this means that the hiring process can be a lot more targeted. Instead of settling for an employee that might not be the best fit, but is available at the moment, stealth mode startups can take a little more time to hire the right people who will take their startup to the next level when they do launch.

The Con’s

× Collaboration and acquisition limitations

If you are in stealth mode in order to protect your idea, but your long-term goal is to be acquired or work in collaboration with enterprises, stealth mode might not be the right fit for your startup. When enterprises see good ideas, they are far more likely to let the startup fine-tune the product themselves and then bring in a well-oiled machine rather than allocate resources to building the product themselves. While still testing out your product, it may be easier to launch proof-of-concepts with enterprises if they know who you are and what you’re offering.

× Higher risks

Part of the risk of launching your startup in stealth mode is that you may put off potential investors, clients, and partners from your product because they will not understand your idea fully and determine its relevance to their needs.

× Gauging feedback is difficult

While being in stealth mode is a great way to work on your product until it is ready for the market, it comes with the risk that there simply may not be a market for your product. Without revealing your idea, testing it out, and getting feedback, it will be difficult to determine whether or not there is a need for your solution.

× Harder hires

If you are looking for rapid expansion, stealth mode may prove to be the wrong launch strategy for your startup. If potential employees don’t know your company exists, chances are they won’t know that you are hiring either.

When Stealth Mode is Right

While stealth mode is not for everyone, it does have its advantages, and companies have certainly been able to succeed while remaining in stealth for years. Business management software company Domo operated in stealth mode for five years and unveiled with a valuation of $2 billion in 2015. In 2012, cyber security company Shape Security, raised $26 million from two investment rounds before anyone knew what they did. 

Ultimately, the decision on whether or not to launch in stealth mode depends on your industry, your need to run a proof-of-concept, your long-term strategy, and your desire to launch in stealth mode or not.

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