Why Going Stealth Could Be Your Startup's Best Move

Expert Opinion By Young Entrepreneur Council @yec

Is long-term success impacted by launching as a stealth startup? How does this approach affect a company during the early days of operations? With so much added pressure from the outside--including external expectations, market timing, and economic pressures--a little privacy and quiet can make all the difference. 

In this article, you'll find a discussion of the pros and cons of operating as a stealth startup with insights from six experts in the field.

Gain a market foothold before publicizing.

Fledgling startups can be targets for more established companies. This can be exacerbated by the "quick exit" strategies that some founders aim for. With these perspectives in the mix, market footholds are harder to establish. 

"When you are a startup, you need to generally operate in stealth mode because you are small and easy to smash by giant, well-funded competitors," says Zain Jaffer, CEO of Zain Ventures, an investment firm based in San Francisco, California. "Until you have gained a foothold in the market with some good long-term clients and formed a moat around your business, it does not pay to publicize it until you need public support."

Perfect your platform without distractions.

Do you want to focus on perfecting your product without distractions? That's what Anthem Software did. According to Joe Amaral, founder and COO of the Florida-based digital marketing company, they spent years gathering feedback from beta users to refine the user experience and scale infrastructure. 

"When I came out of stealth, I had actionable data, scalable workflows, and a polished product ready to disrupt the industry," explains Amaral. "Stealth mode empowered me to build the business I wanted without outside pressure or judgment. I was able to pivot several times based on real customer needs before officially launching. Now I have a solution that provides massive value and a committed user base to propel my vision." 

Iterate privately with future users.

Before launch, you are mostly managing expectations. For those with a broad target audience, it can be a solid strategy to generate interest early or even build in public--as long as you have a hype-worthy product and the resources to pull it off. This was not the case for Fugoya, a productivity software company in Vienna, Austria.

According to founder Thomas Stroble, "It was far more beneficial to spend our resources iterating with a small group of future users in stealth mode. Experimenting and trying things out significantly shaped our product. What we initially proposed and what we eventually launched turned out to be quite different in some areas. If we had been public about our offerings from the start, we wouldn't have been able to move as quickly."

Build organic presence pre-launch.

Taking the time to generate momentum might look like launching a new content-rich website while secretly building your product that could take the market by storm. Instead of monetizing during this stage, you could instead create high-quality guides and blog posts targeting audience pain points to build a following.

"By the time we officially launched our product and emerged from stealth mode, we had already established a strong organic presence on search engines. This allowed us to effectively promote our offering without relying solely on paid advertising," says Ben Bozzay, founder of Tech Lockdown, a parental control platform. "When the time came to introduce our product to the world, we were well-positioned to attract customers at a lower acquisition cost."

Develop and perfect without outside pressure.

Operating in stealth mode can positively impact your company's launch and long-term success by allowing you to scale quietly. Less waves mean fewer "sharks" noticing you in the water. 

Travis Schreiber, director of operations at online reputation management company Erase Technologies in Ontario, Canada, reports that this allowed them to take their time to develop and perfect their product without outside pressure. "When we were ready to launch, we could hit the ground running with a polished offering," says Schreiber. "This approach helped us avoid early scrutiny and build a strong foundation before going public, ultimately setting us up for greater success in the long run."

Focus on core services and market research.

Stealth operations can greatly contribute to long-term success by focusing on core services and market research. You can use this time to make sure offerings are aligned with your target audience's needs. Launching under the radar can also be helpful in differentiating your company from its competitors, says Kristin Kimberly Marquet, the founder and creative director at Marquet Media, a PR and marketing firm in New York City. 

"We could identify gaps in the market and understand our competitors' strengths and weaknesses without revealing our intentions," explains Marquet. "And without the immediate pressure to scale quickly, we could allocate our resources more efficiently. This meant investing in high-quality development, securing top talent, and building robust operational processes that ensured sustainability and scalability once we launched publicly."

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