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The Value of Stealth Mode

Stealth

About one year ago, I began drafting a short piece for HBR on whether startups in India should consider or shun keeping their startup in “stealth mode.” I never got around to writing it, but stumbled upon the notes and outline today cleaning up old papers. I started thinking about it more after reading an interesting TechCrunch article entitled “Stealth Startups, Get Over Yourselves: No One Cares About Your Secrets” and a thoughtful an constructive post by Chris Dixon called “Developing New Startups Ideas,” which encourages entrepreneurs to be the “opposite of secretive” and to keep a Google docs spreadsheet of ideas and share them constantly with people. The conventional wisdom seems to be that keeping an air of “stealth” about a startup — or simply using that word, which seems to bug people — may not be a good idea.

As I started to think about, it occurred to me there are five (5) stages of initial entrepreneurship and, just perhaps, there are stages where being in “stealth” mode is not only an advantage, but necessary. Briefly, they are:

  1. Inception: The time and place in which the idea comes to the entrepreneur.
  2. Concept: The time when the entrepreneur begins to flush out, define, and refine the idea.
  3. Formation: The time when a team forms around the idea, either with technology or not.
  4. Capitalization: The time when the team funds the idea and/or raises money.
  5. Execution: The starting and doing of everything else.

Unfortunately, I do not think I could advise when and where the idea of being in stealth is either good or bad. It’s too nuanced for that, and probably a reason I never got around to writing up the full essay. But, what is clear is that sometimes it is a good idea to keep your ideas to yourself, but it may depend on who you are and at what stage you’re at for your startup. For instance, first-time entrepreneurs who are just at various inception stages may be wise to take Chris’ advice and talk to as many smart, experienced people as possible. On the other hand, when you and your team come to a point of formation and need to raise money, there may be an incentive to be very quiet about your intentions. If you happen to have an idea and experience in an area of scarcity, and also happen to know any potential competitors, it may be to your benefit initially to keep mum about your intentions. It all “depends” on the stage, context, and situation.