Do your startup need to be in stealth mode?

Usually, the earlier you show yourself, the better for your startup’s public image. Investors and clients want to see history. If you don’t have history, then most probably something fishy is happening behind the scenes.

Photo by Matt Artz on Unsplash

I saw multiple startups with a one-page website during my career, claiming that they will get Serie A funding in a couple of months. I don’t believe VC will invest in a startup with only a one-page website, and I was sure something is wrong with this organization. But let me list the different reasons why founders can operate a startup in stealth mode:

Reasons:

• There is no legal entity: Sometimes, founders want to verify their idea before creating a legal entity. There is no need to show something to the world and later abandon it. Better try to develop a proof of concept without a legal entity and after that try bootstrapping it.
• Bootstrapped business: As a follow-up from the previous bullet, usually bootstrapped companies are relatively underfunded before they got traction. In that case, your budget for marketing could be pretty low, and better do not show anything, rather than revealing something poorly made.
• No clear business plan: Some startups start their journey without a clear business plan. Entrepreneurs can decide to do business research and technical research with the start of the company. During that time, it is a sound decision to invest the first couple of months into bringing up the infrastructure and creating the initials of their technological stack. Meanwhile, the business unit can do their research and try making a business plan.
• R&D-based business plan: Sometimes, business owners create their business with a sale in mind. Instead of scaling the company, their business strategy is to make the R&D part, aka innovation, and sell the company. In that case, you can work in stealth mode until you have the invention, and after that, try selling your idea.

As a rule of thumb, I would advise the business owner to take such decisions carefully. From my personal experience, the earlier you have traction, the better. However, as listed in the previous paragraph, there are valid reasons when you want your organization to operate in stealth mode.