Benjamin Kuo’s Blog

I’ve noticed an interesting trend in Southern California, which is an increasing number of stealth-mode, funded companies. Stealth mode–which is to fund and build a company without letting anyone know what you’re doing until at or very near launch–is something which has typically been a Silicon Valley phenomenon. The reasons given to me for starting in stealth mode are usually something about not letting the competition get wind of what you are working on, not letting competing venture capitalists fund similar companies, or to provide an air of “mystery” around a product. Typically stealth mode firms do not have a web site, or only have a single page with contact information and jobs; won’t talk to the press; and are not listed on VC firms portfolio pages, even if funded.

In some cases–semiconductors come to mind–stealth mode seems like it might be useful. In particular, where there are just a few possible customers, and where you don’t need exposure to a larger market audience, it might make sense to avoid cluing too many people into what you’re doing. However, I’ve seen an increasing number of consumer-focused or online web services who are staying stealthy, and won’t talk to the press–even when they have product, are open for business, and trying to attract customers– because they feel like if they let people know what they’re doing, someone will copy them.

How can you possibly expect to get any traction in a market, if no one knows you exist?

This entry was posted on Friday, August 10th, 2007 at 9:11 am and is filed under Startups. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.