The more I think about it, there’s something funny going on in StartupLand, and it seems to centre on declarational information asymmetry – the notion that knowing more (but not telling anyone) helps make Startup A worth more than a similar (but overtly open) Startup B, better known as “stealth mode”.
Having just endured 20 years being told by VCs and their media lapdogs how wonderful stealth mode is, we’re now encouraged to be completely open, even to the point that we should disclose what we don’t know, i.e. push our business development learning curve out into the light. We are all (the argument du jour goes) running ‘learning enterprises’, engaged not so much in driving technological development as in rolling with customer engagement – i.e. the logical linearity of engineering has been supplanted by a kind of spiralling helix of user feedback.
According to this worldview, the you-are-what-you-know of development experience has been replaced by the you-are-who-you-know of customer development. ‘Intellectual capital’ is out, ‘social capital’ is in. So, building customer relationships is now deemed to be startups’ primary business focus, while building things is just a secondary issue. In this brave new world, business only makes sense as a ‘pure service play’: others way of constructing value are just quaintly nostalgic virtual reality-esque diversions. You’re actually building stuff? Get outta here, lame-brain, and come back when you get the Internet and viral social media, haw haw!
To me, this kind of shallow nonsense comes across as the legacy of two toxic decades where financial services have been in near-perpetual ascendancy: to many modern ‘experts’, product, experience, credibility, imagination, and creativity have become mere marginalia compared to the financial service angle of any given business. How can a service business ever be in stealth mode, they ask, when your customers need to see you from Day One?
As with most stuff, this is hardly news to most switched-on startup people: and for quite a while I’ve been taking this services-vs-products non-war in a bit of a negative spirit. But… if practically nobody is going to invest in anything tangible for quite some time, this is – in a weirdly twisted way – great news looking forward. Why? Because it means that the kind of busy & large global marketplaces that get me particularly excited will gradually empty, if only from attrition.
All in all, I’d say that, in a purely contrarian sense, right now is arguably the best time ever to be building IP in stealth mode… as long as you’re talking with loads of lead customers at the same time. Nanodome operated in stealth mode for about 18 months while all the patent and IP stuff got really locked down, but I still talked with plenty of customers and buyers during that time (and I have a box-file full of NDAs to prove it). Basically, why ever would you not want to have the best of these two worlds? There’s no business law that says you can’t, right?