Gijs Verheijke

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There is no point to building in stealth

18 July 2023

Wisdoms:

All three of these have truth to them, and while they are somewhat contradictive they all lead to the same conclusion: Building in stealth is pointless, but not without cost, hence a waste of energy.

Building in stealth is pointless

There are successful examples who started in stealth. Looking at historical data I found one good reason to do it: The founder team is so famous that the announcement that they are building 'something' secret leads to so much press coverage and pre-launch anticipation that the eventual launch becomes a super viral event.

Successful examples: Nest and Zillow.

In deep tech, successes Siri and Magic Leap were in Stealth, but OpenAI was very public.

The reality is that almost any idea will face competition anyway, so even in some successful deep tech examples like Siri and Magic Leap, was there really any point to being in stealth?

There are significant costs, potentially fatal

The number one danger is that building in stealth prevents your company from getting feedback. Without feedback, you won't know whether what you're building actually needs to be built.

I can think of ways to mitigate this somewhat, mainly in B2B companies that could be in semi-stealth. But in consumer startups, it is just too risky to build secretly. The reality is that it's very hard to stand out as a consumer business. You really have to ram it down people's throat: AirBnB launched publicly 4 times before it started to take off!!

A smaller, under appreciated cost is that it takes some effort to be in stealth. There is the difficulty in hiring without telling prospects what they'll be working on, and the wasted energy from telling employees to be secretive about what they are working on. And then there are the awkward semantic hoops the stealth founder has to jump through in trying to explain his company to others.

So in summary, don't be the secretive founder who goes to great pains trying to tell me what they're working on without telling me what they're working on, unless you are super duper famous and you're using stealth as a marketing gambit.