Startups in stealth mode need one piece of advice. • Hacker News Board

Re: Startups in stealth mode need one piece of advice.

#51

Post by chopsueyar » Wed, Feb 16, 2011, 1:31 PM UTC

_urga wrote: post #43

niyazpk wrote: post #30

I work for a 'stealth' startup. The idea is just a very small part of the reason why we are in stealth. There are some other serious reasons why we don't want to go public right now. Unfortunately I can only talk about the stuff related to the idea itself. Our idea is boring and not revolutionary. We already have some competitors in the vertical and while there is no point in trying to hide the actual idea, there are…

Re: "What if someone with double the money we have can execute in half the time?" See Henry Ford working, by himself, after work, late into the night, for years and years, on his prototype car, while others with more money were doing the same thing. His quote on the subject, "no amount of finance will cure mismanagement". His friends at General Electric said he was wasting his time on the gas combustion engine becaus…

The story of the v-8 engine is a bit different.

From "Think and Grow Rich"...

Early in the age of the automobile, Ford decided to produce his now famous V-8 motor. He chose to build an engine with the entire eight cylinders cast in one block, and instructed his engineers to produce a design for the engine. The design was put on paper, but the engineers agreed, every one of them, that it was simply impossible to cast an eight-cylinder gas engine block in one piece.

Ford said, “Produce it anyway.”

“But,” they replied, “it’s impossible!”

“Go ahead,” Ford commanded, “and stay on the job until you succeed no matter how much time is required.”

Re: Startups in stealth mode need one piece of advice.

#52

Post by jdp23 » Wed, Feb 16, 2011, 3:00 PM UTC

Silhouette wrote: post #28

keiferski wrote: post #21

While execution > idea most of the time, I think it's become a little too accepted, for its own good. Ideas are worthless when they're another spin on a web 2.0 site, or rather a spin on something that already exists. From the link: Oh, and what was the company? It was yet another Web 2.0 flavor of a question-and-answer, poll-your-friends site with a distant revenue model and no user acquisition strategy. Ran if for…

I was thinking similar things all the way through the article. We have a start-up in the works. The technical side is fairly easy, and many people could do it. Our value is built on the non-technical stuff, which relies on a network of people and resources that have taken years to develop. We've also done our homework, discreetly, so we really aren't worried about having to pivot dramatically on day one or about not…

No, I wouldn't. If your network of people and resources is your key competitive advantage, then you want to maximize it -- and you can do this a lot more effectively if you're discussing things publicly. Alternatively if your network is so easily sabotaged, well, that'll happen in any case after you launch, so better to work through the issues now.

Re: Startups in stealth mode need one piece of advice.

#53

Post by Silhouette » Wed, Feb 16, 2011, 3:02 PM UTC

ksks wrote: post #45

Silhouette wrote: post #28

Earlier quoted context omitted.

I was thinking similar things all the way through the article. We have a start-up in the works. The technical side is fairly easy, and many people could do it. Our value is built on the non-technical stuff, which relies on a network of people and resources that have taken years to develop. We've also done our homework, discreetly, so we really aren't worried about having to pivot dramatically on day one or about not…

if those businesses see values in "moving sideways", and in the process sabotaging your network, wouldn't they have taken your clients anyway, even without the benefit of breaking your company? if they don't see the value in it, even if they know what you are doing, isn't it unlikely that they would waste money just to crush a would-be competitor? Unless you are saying what your company is doing is so creative and va…

I think perhaps you're seeing a false dichotomy here.

In a nutshell, we are new and high-tech, our competitors are established and low-tech, and we are aiming to solve essentially the same problem for mostly the same people in an easier way.

Perhaps a good analogy would be Netflix. They saw the potential for emerging technologies to disrupt an existing market and built a successful business around doing so, all but killing the old video rental store model in the process. What would have happened if, before Netflix had become established, one of the major rental store chains or perhaps a coalition of big movie studios had realised the potential of those new distribution models and the danger to the existing happy cash generators, and consequently thrown $100,000,000 into getting their own service off the ground? Whether or not the new distribution models ultimately took off, it's a good bet that the world would be a little less red today.

Now, we're building a different product and we're in a much smaller niche market, but the basic risk is the same: if an established dinosaur knew about the idea and realised the impact it could have on their happy cash generators, then it would make sense for them to move sideways and block us to retain their customer base, even if they would otherwise have no need to adapt their existing offering. They almost certainly don't know how to do that today, but they have so much more money than us that they could hire a dozen consultants until they found someone who did. Then they could afford to hire a team ten times our size to beat us to market, while using leverage from their existing network to make our lives difficult until our money ran out.

Re: Startups in stealth mode need one piece of advice.

#54

Post by jdp23 » Wed, Feb 16, 2011, 3:03 PM UTC

dominostars wrote: post #44

jrussbowman wrote: post #6

The ideas I have for products right now are things I would use. Unscatter.com will be a unified search and social client portal. Fanatastic.com will be a sports community site encouraging users to share and discuss latest sports news. I have an idea for a service, rather than product review site I am kicking around with a friend. Lastly I want to make a site people can make books filled with their personal wisdom to…

In response to fanatastic: I stream a lot of soccer games, and whenever something big happens, my first instinct is to see what people are saying about it. Google+twitter give live updates, but it's not very conversational. Reddit is conversational, but the format isn't quite right: it's hard to follow where new conversations are happening. This is currently my go-to. Justin.tv has chat during a stream (almost ideal!…

And this is a great example of the advantages of not being stealthy: good feedback and a potential early user.

Re: Startups in stealth mode need one piece of advice.

#55

Post by jonny_eh » Wed, Feb 16, 2011, 3:12 PM UTC

NY_USA_Hacker wrote: post #17

Gee, it must be fun to call entrepreneurs silly. My view is that the article is 99 44/100%, fresh, soft, still steaming, and actually destructive, BS. The whole post is based on what is apparently deliberately both an obscure and even ambiguous use of the word 'idea'. So, with such deliberate obscurity and ambiguity, all he has is a way to insult entrepreneurs so that all he has is that steaming pile. Details: So, at…

You don't win Nobel prizes for ideas, you earn them for doing great science, and that takes a lot of time and hard work.

Re: Startups in stealth mode need one piece of advice.

#56

Post by Silhouette » Wed, Feb 16, 2011, 3:12 PM UTC

jdp23 wrote: post #52

Silhouette wrote: post #28

Earlier quoted context omitted.

I was thinking similar things all the way through the article. We have a start-up in the works. The technical side is fairly easy, and many people could do it. Our value is built on the non-technical stuff, which relies on a network of people and resources that have taken years to develop. We've also done our homework, discreetly, so we really aren't worried about having to pivot dramatically on day one or about not…

No, I wouldn't. If your network of people and resources is your key competitive advantage, then you want to maximize it -- and you can do this a lot more effectively if you're discussing things publicly. Alternatively if your network is so easily sabotaged, well, that'll happen in any case after you launch, so better to work through the issues now.

> If your network of people and resources is your key competitive advantage, then you want to maximize it -- and you can do this a lot more effectively if you're discussing things publicly.

Why? We are building our network as fast as we are able, much of it via direct personal introductions within a relatively exclusive club. I don't see how letting other people outside that club know what we are doing gains us anything useful.

Also, if there are lterally only a few people in the world who can provide what you need and you can get most or all of them to sign up to your idea, your network is unassailable. If someone who has contacts with the network from other dealings gets in there first, you're in trouble. So it doesn't follow that a network that is highly vulnerable now would still be so after launch.

Re: Startups in stealth mode need one piece of advice.

#57

Post by ylem » Wed, Feb 16, 2011, 3:45 PM UTC

Silhouette wrote: post #53

ksks wrote: post #45

Earlier quoted context omitted.

if those businesses see values in "moving sideways", and in the process sabotaging your network, wouldn't they have taken your clients anyway, even without the benefit of breaking your company? if they don't see the value in it, even if they know what you are doing, isn't it unlikely that they would waste money just to crush a would-be competitor? Unless you are saying what your company is doing is so creative and va…

I think perhaps you're seeing a false dichotomy here. In a nutshell, we are new and high-tech, our competitors are established and low-tech, and we are aiming to solve essentially the same problem for mostly the same people in an easier way. Perhaps a good analogy would be Netflix. They saw the potential for emerging technologies to disrupt an existing market and built a successful business around doing so, all but k…

There's an excellent book that I'm reading called "The innovator's dilemma" which seems relevant to your case. The difficulty with established competitors is that their middle management gets in the way--that is, if you're charging less and offering less, then they won't bother competing against you because they're focused on up-market customers.

Re: Startups in stealth mode need one piece of advice.

#58

Post by grammaton » Wed, Feb 16, 2011, 4:27 PM UTC

"This is a hard lesson if you're not the one that will do the building, because it means that your contribution is not as valuable as you thought."

For this one quote alone I'd love to meet the author and buy them a beer.

Re: Startups in stealth mode need one piece of advice.

#59

Post by NY_USA_Hacker » Wed, Feb 16, 2011, 5:15 PM UTC

jonny_eh wrote: post #55

NY_USA_Hacker wrote: post #17

Gee, it must be fun to call entrepreneurs silly. My view is that the article is 99 44/100%, fresh, soft, still steaming, and actually destructive, BS. The whole post is based on what is apparently deliberately both an obscure and even ambiguous use of the word 'idea'. So, with such deliberate obscurity and ambiguity, all he has is a way to insult entrepreneurs so that all he has is that steaming pile. Details: So, at…

You don't win Nobel prizes for ideas, you earn them for doing great science, and that takes a lot of time and hard work.

No, not always or really: In research, the 'idea', if it is correct, really is the core of the work. All it takes to win the Abel prize and more is a good idea for answering the question P versus NP. The only difficulty is the idea. Then have to type in the theorems and proofs, and that is likely less than 100 pages, at maybe five hours a page, and not so difficult.

Re: Startups in stealth mode need one piece of advice.

#60

Post by NY_USA_Hacker » Wed, Feb 16, 2011, 5:25 PM UTC

keeptrying wrote: post #19

NY_USA_Hacker wrote: post #17

Gee, it must be fun to call entrepreneurs silly. My view is that the article is 99 44/100%, fresh, soft, still steaming, and actually destructive, BS. The whole post is based on what is apparently deliberately both an obscure and even ambiguous use of the word 'idea'. So, with such deliberate obscurity and ambiguity, all he has is a way to insult entrepreneurs so that all he has is that steaming pile. Details: So, at…

Umm actually the guys who coined the term "first mover advantage" actually wrote a paper explaining why they were wrong. They published it in the harvard business review so u should be able to find it via google.

"First mover advantage" is still an 'advantage'. E.g., Hughes Tool. Xerox and their photocopier that they made for about $1500 and sold for about $29,000. FedEx had a nice first mover advantage: They were flying under CAB regulation Part 91b for unscheduled air taxi, intended for mom and pop air charter operations. So, their planes had to have max gross takeoff weight of 25,000 pounds. With an exception they got 28,660 and could fly the Dassault Fan Jet Falcon DA-20 and quickly bought about all there were. Bigger planes? Illegal for them to operate trucks. That first mover advantage was key for their success. Then Carter appointed Kahn to the CAB, and he killed it. Then FedEx and everyone else, e.g., UPS, could both fly large airplanes and operate trucks. The guy who comes second or later might win, but being first can still be one heck of an advantage.