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Stealth start-ups suck

Update 6/22, 10:45am: 24 Hour Laundry CEO Gina Bianchini responds with comment, below.

stealth.jpgDo you stay stealth or not? Not long ago, we interviewed with the partners at Kleiner Perkins Caufield Byers, a respected Silicon Valley venture firm. Partner John Doerr carries quite a dose of credibility, having backed Sun, Netscape, Google, you name it. He argued that stealth for most companies is a good thing. By and large, in the weeks following that published Q&A, we talked with many other venture firms that seconded that sentiment -- so we thought case was closed.

But news of a stealth Marc Andreessen start-up 24 Hour Laundry has whipped up criticism of staying stealth, and the consensus seems to be leaning toward transparency -- at least as far as Web start-ups are concerned. This is an important question, since so many Silicon Valley start-ups grapple with how open to be. Mark Fletcher's critique of stealth start-up (we copied his headline) seems pretty convincing. Stealth sucks because it ropes you off from valuable user feedback -- the real fuel of success. He too knows what he's talking about: He recently built Bloglines very quickly and sold it successfully to AskJeeves. And before that, he co-founded a company that became known as eGroups, bought in 2000 by Yahoo for $420 million.

(Update 11:18am: Here is a post by Diego Doval, an actual insider at 24 Hour Laundry, shedding more light on why it has remained stealth. Fair enough.)

Meanwhile, Jeff Nolan, over at SAP Ventures, says "I can't think, off the top of my head, even one of these famous stealth companies that went on to greatness, can you?" Good challenge, Jeff. Gosh, there's got to be a few out there, but we can't think of any. Even if there are, the point is a good one: Stealth might be overrated. It's easier to think of the stealth companies that didn't succeed as expected. Segway, the high-tech scooter, came to mind before Fletcher mentioned it too. Wonder if it would have been adopted more swiftly had Dean Kamen opened up and consulted with potential corporate customers, individuals and transportation officials (about regulatory challenges of using it on roads and sidewalks) before presenting it as a done-deal? And were there really competitors lurking to steal the idea? Even if there were, they might have helped grow the market -- two companies lobbying the Kafkaesque bureaucracy, instead of one.

Though Russell Beattie comes to 24 Hour Laundry's defense.

What do you all think? And can you think of any examples of stealth web companies that made it big?

Update 6/23: A more nuanced take by Jeff Clavier, favoring stealth in many cases.



Comments

Why all the griping about stealth? Does everyone know what's going on inside Google? Does everyone know everything that's going on inside Yahoo? They have cool projects that aren't yet public, don't they?

It sounds like whining "they won't tell me their secret. Wah!" All stealth is - is waiting until the right moment to launch your story. With whatever you feel is complete and ready to tell it. Tell your story too early - you may get criticism for an incomplete or uninteresting story, or get copied too quickly. Tell it too late, well, that's your own market risk.

But in this day and age of blogs, anything you say becomes public almost immediately. So what's wrong with trying to take control of that moment. In fact, it is kind of sad that it's come to a place where people can't talk about something in confidence without it getting blasted to the net.

Josh E on June 21, 2005 9:30 AM
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Great points, Josh.

Stealth isn't a marketing strategy.

Stealth is the recognition that the company would rather spend time *working* on the product, than to talk about it.

Great products aren't built overnight. They take a focus of passion, and time, and care.

I admire 24hourlaundry's ability to put their heads down and roll their sleeves up, and do the hard work that it takes to build their product.

Adam on June 21, 2005 9:47 AM
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24HL laundry IS NOT BEING STEALTH. They obviously are inviting press attention and talking to media in a coy (read passive aggressive) manner to create hype. Loudcloud followed the same strategy. . .! Real stealth startups we wont even hear about

will on June 21, 2005 12:11 PM
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Adam,

I agree with you. If we had our way, you would never have heard of us and I wouldn't be responding to your comment. However, you have something wrong that I want to clarify. We have never spoken to the press. We've had our heads down working on our product which we will hopefully get out the door soon. CNET took it upon themselves to write something about us, without even asking for a comment from me. They used my Linked In profile for the meat of the story and got a lot of things wrong.

We are huge believers in getting something out there early and iterating often. However, we also believe in getting a product out there that doesnât suck. Right now, the latter is preventing the former, but hopefully that will change soon.

Gina
24 hour laundry

Gina Bianchini on June 22, 2005 10:34 AM
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