I have made some incredibly stupid mistakes as an entrepreneur. For example, as a 23-year old co-founder, I thought that being represented by a notable law firm, the same one as both Google and Facebook, actually meant something (hint: it doesn't). I also used to talk about our then fledgling company so covertly that it was almost in some form of code, deliberately ensuring that no one would understand exactly what we were doing.
Like many first-time founders, we believed that our idea was so groundbreaking that the competition, both large and small, was immediately going to try and rip us off, so we took great strides in keeping it a secret.
Sadly, this is an affliction that still impairs many startups, often leading to their demise. It's commonly referred to running your business in "stealth mode," and the problem with stealth mode is that it does considerably more harm than good.
While I'd thought that the startup community had largely abandoned the concept of stealth mode, this year's scores of meetings with founders has proved otherwise. The startups have been a geographical mix, including England, Spain, and America, and they've ranged from sports and food to automotive and virtual reality. Consistently, we saw founders, even experienced ones, hurting their companies by remaining in stealth mode.
Especially early on, no one values your idea more than you do. And while it may be brilliant, ideas are like belly buttons; we all have them. More than the idea, success is about sound execution. In most cases, only by executing well and gaining customer traction will your competition ever respond your idea.
If you don't properly expose your company, you'll miss out on three essential areas of value creation.
Customers are the lifeblood of every company. Even if you're business is trying to acquire free users, they are essential to your growth. When you're in stealth mode, it's very difficult for customers to find you. You want your customers to know exactly who you are and how you can help them.
Make sure that you have a website that is clear and concise; you'll also want create the appropriate social media channels and insure that your digital presence is consistent. You may also want to issue a press release to announce the company, ideally involving truly relevant news.
Regardless of the size of your company, talent is critical to your success; you have to have the right team. Like with customers, you need to raise awareness to potential hires and quickly demonstrate why they should join your cause.
At a minimum, post your open positions on your website and distribute them across platforms like LinkedIn. From a talent standpoint, being in stealth mode is like hiding from the search and rescue team when you're marooned on an island.
You always want to have the option to raise capital. Even if you've bootstrapped your company and are operating in the black, you'll likely reach a point where your company's growth is constrained by cash flow. Especially as a first-time entrepreneur, you want potential investors to know about you and to have established rapport long before you need their money. Being in stealth mode may hide you from the competition, but it usually limits your fundraising options as well.
There is, of course, one exception where stealth mode is appropriate, and we saw one such company this year. If you have abundant access to capital, customers and talent, you may stay as covert as you'd like.
This startup, however, was run by extremely experienced entrepreneurs, who had made more money than many of the investors that they pitched. They had easily raised a lot of capital, constructed an all-star team that had secured a host of large clients, and even locked up all intellectual property for their products.
If this isn't the case for your startup, do yourself, your team, and any existing investors a favor and get the heck out of stealth mode.