Stealth Mode: Competitive Positioning or Hogwash?

It is almost a daily occurrence that I am scanning TechCrunch posts and come across a company announcing that they have received funding from a leading venture capital firm, but it releases no more details. These start-ups are said to be in “stealth mode.” 

Leave for a moment the irony in a “stealth” company supposedly shrouded in secrecy, in many cases issuing a press release to a widely-read tech blog to talk about their recent Greylock fundraise, and you are left with a discussion of the merits of such efforts. 

The argument for start-ups to be in stealth mode is that they are able to develop their products outside of the public eye, and more importantly, outside of their competitors’ web of awareness. The degree to which some of these companies have gone to maintain the ultra-secrecy of their businesses is a bit silly. Take the announcement today that Flipboard has raised funding from Kleiner Perkins, one of the better known venture capital investors. No other information was provided. Not even a general industry grouping. The company’s website shows nothing and the company’s Twitter account has a benign post, “Flip. Flip. Flip.” This is a perfect instance of the fruitless nature of the stealth identity. How does a company expect to generate buzz about itself when no one knows what the product is to be, who it is to be used by, or even what sector it is in?!

The fear of stealth entrepreneurs that someone might steal their idea or that public awareness will harm their launch is false. If you are worried about a large technology company or other business hearing/reading about your idea and being able to recreate your efforts, then maybe your idea isn’t so great! 

Society has always been fascinated by imperfect information. Knowing something that not everyone has access to has a certain appeal. Knowledge is power, right? Wrong. This high school-esque desire to keep secrets will in most cases backfire. 

The best defense is a sound offense. Great companies are built by knowing their customer, getting constant feedback from that customer, and refining the offering. Creating competitive positioning is all about targeted marketing, client awareness and effective execution. A great company is one that constantly works to better understand their consumer, innovates accordingly, and uses media efforts to announce how they are crushing their competitors, not how they are hiding behind a blank webpage.