Stealth Startup
As the business world keeps growing continually with new entrepreneurs stepping into the world of business with their respective startups, the marketplace becomes more and more saturated with this increasing trend and as a result, entrepreneurs (especially the new entrants) find it relatively difficult to cope and do thrive amidst the tons of competitors with similar products and business operations. In view of this, business experts developed and came up with a way that is known and recognized as Stealth Startup with which new businesses or perhaps new products, as the case may be, can thrive in the marketplace without having to worry about their potential competitors.
Over the years, you would have been conversant with a specific startup mode which is recognized as the regular startup mode; here enterprises and businesses (including new and existing) get all the resources they would need to get into the public limelight, as a result, resources which include marketing, advertising, campaigns and promotions et cetera, are tailored and geared towards making these businesses and their respective products known to the public.
In contrast however, a stealth startup does quite the opposite, that is, instead of leveraging the euphoria of publicity, a stealth startup prefers leveraging and exploring the world of privacy and secrecy.
According to research, although the stealth startup mode is relatively uncommon and less popular in the business world even today, the mode has been proven to be quite responsible for the growth and development of several businesses including many of which are now recognized as multi-billion dollars corporation today.
Nonetheless, it is pretty imperative to understand that while this mode of business can work in diverse business markets and industries, there are still perhaps some business areas as well as seasons it would witness little or no progress due to their nature. For example, in the technology industry, stealth startups would witness little progress in that this industry embraces publicity rather than secrecy.
In view of this, this article will address and reveal to you extensively everything there is to know about Stealth Startup, including addressing why you might want to consider your startup going the stealth way, how to spot or recognize startup(s) operating in stealth mode, the appropriate time to launch a stealth startup, as well as the pros and cons attached to stealth startups.
Stealth Startup – What You Need To Know
First, before delving into addressing all there is to know about stealth startups, it is imperative to know the basics and what the business mode simply implies. The business mode “Stealth Startup” is a derivative of the word “stealth” which in English simply means “privacy or secrecy”. Stealth Startup is thus defined as the business mode of conducting or launching a business startup which technically nullifies the regular business startup mode which embraces publicity (that is, channeling all resources into making a product or business become a public figure), but rather prefers or seek to leverage secrecy or privacy into building a strong and reliable brand. In simple terms, stealth startup implies conducting or launching a startup in private.
When a company is operating in stealth mode, its stocks are not available nor traded in the public markets, investors are gained or absorbed directly rather than publicly, and all information which includes but is not limited to the company’s mode of operations, its financial statements, its products offerings are kept away from the public eye, as a result, hardly will you find or garner substantial information about the company even upon logging into to their official website.
However, according to research, some entrepreneurs leverage this mode of business in order to focus on building their new discovery projects and protect their intellectual properties from being infringed by competitors as well as nurture it to maturity stage. It is, however, imperative to also note that there are some existing companies who leverage this mode of business too. Nonetheless, existing companies use this mode perhaps to launch a new products or redefine existing ones. Here, their motive could perhaps be to protect their idea against theft from competitors, or in some cases, they had considered the products to be disruptive in the marketplace, hence they prefer it would thrive using stealth mode.
When You Should Consider a Stealth Startup
Perhaps you are an entrepreneur looking at launching a new startup for new customers, or peradventure yours could be that you are looking at redefining your product(s) or launching a new one to existing customers, in any case, there is specific periods in your business life when you might want to consider why you should operate in stealth mode. Amongst this period include:
– When your proposed project or startup could be disruptive in the marketplace
– When you have a strong customer base & Market Fit
– When your proposed startup/project would require a lot of time to before its completion
– When you are looking at redefining an existing product
Types of Stealth Startups
In its entirety, stealth startup is of two different types, and the state and nature of the two types differ from each other extensively. They include In-company Mode and Total Stealth Mode. The two types are addressed below.
In-Company Mode:
An in-company mode refers to the stealth mode when an existing company that is already thriving in the marketplace or already has an existing customer decides to operate privately perhaps in order to redefine its existing line of products or launch a new one entirely. During this mode, companies tend to keep all information about their proposed projects or products out of the public eye, and in some cases, decide to keep information confidential such that even some internal staff would have no access to it until it reaches the period where it is deemed fit for such startup or product to go public.
Total Stealth Mode:
Total stealth mode on the other hand is when a new startup without an existing customer decides to be run privately and secretly with several varying reasons which may include but are not limited to (1) owner(s) are trying to focus more on nurturing and building the product or startup (2) owner(s) are trying to observe the market trend of the startup before going public (3) owner(s) are trying to protect their relatively new innovative idea against intellectual theft from exiting and potential competitors. As aforementioned in the introductory part of this piece, in this mode, owner(s) tends to source funds privately, stocks are not made available to the public view, and investors are absorbed directly and privately rather than publicly.
How to Spot a Stealth Startup
Albeit it is relatively difficult to spot a business operating in stealth mode, nonetheless, the following hints may help in spotting a stealth startup.
– A company or brand with a subterfuge name or brand
– A company or brand whose official website reveals little to no substantive information about the company’s dealings
– A company or brand with heavy financials yet seeks no investors nor trade stocks publicly
– A company or brand whose dealings are surreptitious that is, avoiding publicity or limelight but rather embracing secrecy and privacy.
Pros and Cons of a Stealth Startup
Frankly speaking, there are relatively tons of benefits and drawbacks with stealth startups. However, for the sake of brevity, this section would address them in detail as quickly as possible
Pros
Stealth Startups Take Competitors Aback:
One of the astounding advantages of stealth startups that owners leverage (especially the existing ones) is that they often come as a shock to competitors, as a result, owner(s) are able to penetrate the market more to enjoy the benefit of competitive advantages.
Avenue to Focus, Nurture and Grow
Another benefit of this business mode is that it gives owner(s) ample time to focus, build and nurture their startup from scratch to completion stage.
Draws no Public Attention:
This could be the best benefit for you especially if you are trying to build or launch a tech startup, the mode keeps it away from public attention so that bigger tech companies like Apple, Microsoft, and Google would not be able to integrate your idea into re-energizing their enterprise.
Protects Intellectual Property:
As noted in the foregoing point, stealth startup mode lets you to protect your intellectual ideas and properties from public theft.
Avails You Absolute Control:
When you go the stealth mode, you have absolute control over your startup against any external interference, including press influence, competitors’ reactions, et cetera.
Cons
Relatively Low Feedback
You tend to experience relatively low feedback when you go the stealth mode as customers who would test-run your startup have little to no access.
Low Funding
Since your stocks are not traded publicly nor your investors absorbed publicly, thus you might experience a relatively low funding
Popularity Challenge:
Stealth Startup embraces secrecy, hence your brand or product would attract little to no popularity until it is made public.
Conclusion
Finally, after a close review of all, there is to know about stealth startups with extensive detail running from section to section, I hope you are able to garner substantial information with regards to Stealth Startups as promised in the introductory portion of this piece.
