Stealth mode is mounting a comeback. It disappeared for awhile in the aftermath of the dot com crash but there are signs of its return, even with a swagger in things like Craigslist job advertisements (“We’re a hot new start-up, still in stealth mode, operating quietly . . .” and hubris too (“We always get a tremendous response to these postings.”)
But as Tina Turner might ask, “What’s stealth’s got to do with it?
In the really old days, even before television became common, the term “skunk works” was coined to denote a project, or group, or piece of work that was operating undercover within an organization. It originally was the official alias for the Lockheed Martin Advanced Development Programs (formerly Lockheed Advanced Development Projects) in the 1940’s – the folks who produced planes like the U-2 spy plane.
Skunk works morphed to stealth mode which means many of the same things: development and planning taking place in secret. It often refers to the position that startup companies take when developing a product they feel will be very competitive in the marketplace. They swear everyone to secrecy and keep a very low profile until they are ready to launch.
The psychology behind stealth is simple: people are working on something so terrific / new / revolutionary that when it launches it will take the world by storm. Stealth assumes that the first to market takes the market.
Unfortunately, as Ray Poynter and others have shown, generally it’s second or third mover advantage, not first.
So why do it? Likely, because it seems cool. Like the urban legend that has taken on a life on its own, it lives on its own hype: “of course we’re in stealth – that’s what you do when you’re a start-up.”
But once you cut through the hype, what’s left: people who believe they’re on to something that they need to keep secret. As Dharmesh Shah writes, what’s often at play is lack of direction, lack of focus, or a lack of confidence in their product.
Stealth, at least in the Internet age, has its limits. Remember that Apple – famously secretive – announced its stealth iPhone some six months before it went on sale. Why? Because of required FCC regulatory filing.
Lakota Technologies, Inc. is a company that’s surfacing from deep stealth to perhaps mid stealth mode. [Disclosure: Ben Quinones, Lakota’s CEO, is a good guy and neighbor from the Dolores Park area but anything I know about Lakota is from research on the Web.] But Lakota, like Apple, can only stay in stealth mode so long: filings behind a “patented a novel diode structure that we believe will dramatically improve the efficiency and performance of power supplies” have a trail and if you know where to look you can find a lot about a firm like Lakota before things go public.
So the upside for stealth is maybe an increase in “cool factor” and on rare occasion you steal some time from competitors in launching what you hope are game changing products.
And the downsides? Many.
Stealth means you initially talk to would-be investors, employees, and collaborators at arms-length. Like the Wizard of Oz, you hope that you convey great things but might also be hoping no one pulls back the curtain.
Branding from an employee recruiting perspective is impossible, and creating a public presence is the same: tough to market yourself when you can admit you’re really even exist.
The reason for the original skunk works was to shield secret military technology that would be hard to develop and copy. Today it just takes a quick trip to Guangzhou to find any number of firms that can replicate most technology.
Last word: when you’re doing stealth mode the greatest fear is not that any secrets get out, but that when the launch time hits (or the secrets do get out) someone will comment, as Peggy Lee might say, “Is that all there is?”