Introducing your stealth startup to the world is an exciting and monumental time. It’s the first step in determining whether your product is the right solution for the problem you’re trying to alleviate. It’s a way of getting data and a way to identify the market that resonates most with your product. And when the press opportunities start filtering in, you can’t help but feel like you’ve made it.
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But when entrepreneurs release their product too quickly and botch their first impression, all the blood, sweat, and tears could be rendered useless.
Choosing whether to go public or stay in stealth mode hinges on a variety of factors. By staying stealthy, you resist press and public attention and can continue nurturing your product to life. When coming out as a public enterprise, you can experience increased awareness and new business opportunities. But you must be prepared to scale quickly and possibly lose a little bit of that precious control.
The healthiest decision for your startup isn’t always clear-cut, so it’s important to address every aspect that going public will affect. Here are five questions that will guide your decision to take the leap or continue building your brand under wraps:
1. Have you mastered your differentiation?
You need to distinguish yourself in the market before entertaining the idea of going public — or face confusing your audience and ultimately driving them away. If you’ve clearly differentiated yourself in the market and you’re well ahead of the competition, it might be time to scale up.
Having the spotlight on your brand could damage your competitive advantage if you haven’t differentiated your product. By staying behind the scenes, you can keep proprietary information a secret and monitor the competitive landscape. This is especially important when launching a highly technical startup. You want time to build it and perfect it. Waiting for your competitors to launch will give you extra time to work out the kinks and release a superior product.
When Dropbox arrived on the scene, it was entering a crowded marketplace. Staying in stealth while it nailed down its point of differentiation allowed it to become a leader in its field.
2. Are your product and strategy solidified?
Going public means you’re telling your story to the world. You must be sure that your product and strategy are set for the next six months and that you’re clear on what objectives you’re looking to accomplish with this launch before taking the plunge.
Inviting the press and the public to weigh in on your idea will add fuel to your fire, and changing details like team members and funding sources after you’ve made your public announcement is a risk. You should be 100 percent sure you don’t need that extra flexibility before launching.
Consider the app Color. The company launched before the app was created. At its release, it showed screenshots and announced it had raised $41 million. It wasn’t proven enough, and momentum quickly fizzled. After scaling back and pivoting to another idea, it still couldn’t recover from the bad press.
Staying flexible until your momentum and strategy are secure could give you an edge. This means you can change your name, brand definition, and press message without facing the hurdles of relaunching. Companies rarely keep the exact same product they started with.
3. Do you need to land top talent and investors?
Going public gives you access to talent that startups in stealth mode might not attract. Your company will be much more visible to potential talent, which will save time and fuel your development stage. Plus, your venture will be much more attractive to investors, if that’s what you need.
If you’re equipped with solid talent and funding, going public could disrupt your period of growth and development. My advice would be to let all that mind power and money get to work on your product and go public after it’s ready for feedback.
4. Will a spike in users help your company?
Increased press can attract more users, sales, and investment opportunities. This is especially important when you’re building a consumer app and trying to acquire a large user base quickly. A public launch can help generate signups and expedite your startup’s growth.
If the thought of extra traffic, usage, or downloads makes you feel uneasy, you might want to reconsider going public. Taking on more than you can handle will only hurt your company.
5. Will more press distract you?
Feeling the urge to share your ideas with the world is a perfectly natural part of the early startup stage, but you can’t let passion cloud your good sense.
The spike in traffic, traction, and downloads that accompanies press can cause entrepreneurs to lose sight of their mission and real metrics that will make the company sustainable. There’s no harm in staying humble and realistic about your startup if an uptick in publicity will distract you.
Just look at Elizabeth Holmes, the youngest female billionaire. Her startup, Theranos, stayed in stealth mode until it was a massive company well ahead of potential competition. It developed a new way to take and analyze blood samples and revolutionized a previously immobile part of healthcare.
Keeping these pros and cons in mind can help you evaluate tradeoffs and envision the strategy that will work best for your company, product, and market fit. At Node, we performed a cost/benefit analysis and decided to stay in stealth mode. We were building new, complex proprietary technology and chose to conduct a private beta first to perfect the product, given our target market.
Don’t take the decision to go public lightly. Rushing in could offset the huge investment you’ve made in building your company. Consider your startup’s needs, and be strategic about this decision. Then, you can reap the benefits of a successful launch.
What other factors have you considered when deciding whether to introduce your startup to the world?
Image by Eric via Flickr
