New Thoughts on Stealth Mode

We’ve been having a running joke within Foundry Group for several years about “stealth mode.”  My partner Seth alludes to it in his blog post a few years back titled To stealth or not to stealthI’ve always been on the side of “not to stealth” but after watching the remarkable stealth experience of Trada, thinking about how Niel Robertson (Trada’s CEO), Seth, and the Trada team have effectively used stealth mode, and reflecting on what “stealth mode” actually means, I’ve changed my mind.

Niel wrote a brilliant post on this titled The Stealth Mode: Trada’s Position on Staying Stealth.  I read it carefully when he first wrote it.  I just read it carefully again.  You should also.  It’s one of the best posts I’ve ever read on this topic.

Even though I enjoy hazing Seth, after reading the post again this morning, I thought about how other companies in our portfolio have been effective at using stealth mode principles from Niel’s post.  Even though Zynga is extremely visible these days, a number of the principles have consistently applied throughout the business, especially in the first year.  Oblong, which is absolutely crushing it, has been “playing their own game” for a long time.  AdMeld, another company that Seth is on the board of, adhered to many of these principles as they built up a massive position in their market.  And we’ve got another stealth company quietly building something amazing which I’m sure they’ll start talking about when they are ready.

Niel redefines stealth mode very nicely in his post and then applies it to how Trada went from an idea being bounced around between him, Seth, and a few other folks to a very unique business, growing like crazy, with no direct competitors or fast followers.  Sure – competitors may appear over time, but the head start that Trada has is dramatic and their ability to lead their market segment now that they’ve emerged from stealth mode is insured.

Read Niel’s post The Stealth Mode: Trada’s Position on Staying Stealth.  Actually, read it once, send it around to your executive team, read it again, and then discuss how it applies to your business.  It’ll be worth your time.

  • http://twitter.com/dealhorizon @dealhorizon

    Brad, thanks for the link to Niel's post – that was a great read.

    The only suggestion I would add is that there are alternatives to going "full stealth" – one of my start-ups is front-ending the data collection interface to a customer group that is not anticipated to be the core contributor to revenue two years from now.

    By keeping our target group in stealth (while providing value to both target customers) we're able to get valuable feedback on bugs, gather the data we need, and prepare for the higher-priced offering "in full view" of a large amount of traffic.

  • http://intensedebate.com/people/KevinVogelsang KevinVogelsang

    It all comes down to delivering value, does it not?
    By going "stealth," you're able to play your game under the radar and get a start, but you're risking the help and info you get by being open.
    Would you say stealth is a weapon better used by more experienced/knowledgeable entrepreneurs with good understanding of the market and the necessary networks?

    • http://intensedebate.com/people/bfeld Brad Feld

      I’m not sure if you need to be “more experienced” to use stealth effectively.  I think ultimately it comes down to playing your own game at your own tempo.

  • http://ventureswell.com Luke G

    Nice post.

    Publicity should be used as part of the scaling/company building process – which you avoid like the plague until you've reached some sort of identifiable product/market fit (e.g. traction + retention).

    There seems to be a typical pattern to screwing up the stealth vs. publicity approach. Companies "bake the cake" in private without validating the product with real users/customers and then pursue a big press launch. What happens? Well, unless they've gotten particularly lucky, something like this:http://ventureswell.com/this-is-what-happens-when

    If you can't convert and retain users & customers, public exposure can do more good than harm. That being said, if you're aren't telling anyone about what you're building, it's tough to to validate your product. The right approach – which Trada used/found – seems to be to quietly validate your product with real customers and then open up (and pour fuel on the fire) when you're ready to scale.

    • http://intensedebate.com/people/bfeld Brad Feld

      Yup – right on.

    • http://twitter.com/blindfocus @blindfocus

      Right on Luke. Baking a cake in a vacuum tends to only taste great to the chef.

  • http://twitter.com/blindfocus @blindfocus

    Brad- Thanks for the link, and the thoughts. I think that sometimes start-ups forget that the product is the most important thing- without it customers cant buy. I sometimes fear that entrepreneurs get caught up in the buzz and fund raising that they don't realize that they are not selling stock in the company as an end game, they have to have people that buy their "thing". and it just happens that the investors that they are pitching for capital are betting that the management can develop, ship and sell that thing… Stealth is an interesting tool if you can keep the "right" people in the know, and competitors in the dark.

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  • http://twitter.com/tuneyfish @tuneyfish

    From Niels post: "So my definition of stealth mode is simply to not do all the things that come with being a public player."

    Stealth, by Niels definition (as I understand it) is when your heads down building the product. Not necessarily stealth as in "I can't tell anyone what I'm doing" but "Its not the right time to tell everyone what I'm doing"

    Once it's the right time to come out of stealth, in Trada's case it was 18months when they had the staff and a product and customers

    Out of stealth and the realization that you can't "hover over the company and the product" – great stuff! http://www.youtube.com/watch?v=4XpQ7YVXv_0#t=87m2

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  • http://www.pass4sure.eu/Cisco/642-515.html 642-515

    I can't agree with more.

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  • http://intensedebate.com/people/fiwedding fiwedding

    I’m not sure if you need to be “more experienced” to use stealth effectively. I think ultimately it comes down to playing your own game at your own tempo.

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