Stealth startup or loud startup?
There’s an age-old debate in the startup community of whether it’s better to keep your product on the down low pre a launch or be as loud as humanly possible. At EH we have products that we’re loud about but also some being developed in stealth for a good reason, at least we think so!
The debate of stealth or loud still rages on today but what’s the answer? As with most strategies, it’s ambiguous, it really depends on your company, technology, market and a myriad of others factors. We’re going to breakdown the benefits of each and hopefully debunk a few myths in this article. Let us know your thoughts in the comments section and let’s figure it out!
A stealth startup is defined as a company that avoids public attention, with the intention of hiding from competitors, to conceal information or as part of mysterious marketing strategy. A startup could also be stealth to quietly test and improve its product or service pre a mass launch and for a million other reasons.
Should your startup be in stealth?
A lot of the reasoning for startups being in stealth is opinion, but there is one key criterion that if you hit, stealth is usually a preferred option. If you’ve developed a new technology or innovation that’s going to disrupt a market and could be easily replicated by competition or near enough, stealth should definitely be considered an option. A good situations and reasons below for when you should consider stealth as an option for your startup:
- Because odds are there are better funded, better known and more developed direct/indirect competitors out there who could simply copy your technology, change it slightly and legally completely dominate the market you’re in before you have the chance to start selling.
- In the worst case scenario, your technology could simply be stolen by a foreign or domestic competitor. It’s not only big American giants like Lockheed Martin who are at risk of IP theft, but there are also many businesses now battling Chinese rivals who are alleged to have stolen technology and IP.
- A competitor may have developed or be developing a similar technology/ innovation, and if they go to press, you can guarantee they’re going to steal your thunder, potential investors and clients. First to market has a lot going for it.
- You may also be hastily acquired before you hit the market. This isn’t common, but it does happen, you can get bought out at a fraction of your potential value. It may seem good in the short term but in the long term this acquirer may shut down the project and keep it quiet or integrate into their own service. There are plenty examples of early acquisitions that made founders rich but incredibly unhappy.
Overall there is no hard and fast on whether you should be stealth but new game-changing technology/IP is an excellent reason to do so. One thing we will say having worked with 1000’s of startups is really consider if what you’ve developed is really that innovative. Many founders get sucked into their own hype, and it’s something to be avoided because as we’ll explain in the next section, the benefits of stealth are destroyed by the lost traction from not being loud if it’s not right for you.
We’re pretty sure the urban dictionary version of loud, meaning “a slang term for high-quality marijuana” is not the definition we’re looking for. So let’s define a loud startup as a company that creates as much noise as possible pre-launch and is trying to gain as much public attention as possible. Generally, if you’re launching a startup/ product that requires traction to be valuable and doesn’t rely on innovative tech, then you should be as loud as possible! You have nothing to lose from building traction at this stage and everything to gain!
Why should you run a loud startup?
- Because you can build a lot of buzz and start building a brand before you’re even in the market. Gaining awareness is often the hardest thing.
- You can launch pre-launch versions and get testers giving you feedback on upgrading/ changing the product to meet customer demands.
- If you’re fundraising and you don’t have a dedicated VC network on call who buy into your product, then making noise is key to attracting attention and getting on investors’ radars.
- Finally, with market validation and traction you can begin the journey from startup to business, a company making revenue, building investments and ultimately putting you much closer to your goals.
Be loud! This strategy should be pursued for most startups, it’s not for everyone, but it comes with massive potential benefits that could be lost from keeping quiet.
The big question: To stealth or not to stealth?
In most scenarios, it’s better to be loud. Often founders overestimate their innovation/ tech or don’t properly understand the market, no one’s perfect but unless you’ve built a hyperspace gateway or something of a similar innovation, be loud! The damage, time and resources you could lose from being in stealth are extensive. On the other side, if you really do have the next big innovation then it’s likely, being in controlled stealth is a good move. There’s no hard and fast answer here, let us know your thoughts in comments and let’s get a debate going!
Related: Create a winning startup