The Entrepreneur’s Essentials #8: To be stealthy or not?
For this lesson from The Entrepreneur’s Essentials, I’m reflecting on startup launches. We recently invested in Osano, which is led by the very talented Arlo Gilbert and is currently in stealth mode. And we also recently invested in MOON Selfie Light, which is led by the very energetic Eddie Madongorere. By contrast, MOON is going to launch soon and is not in stealth mode at all. I’m also thinking about SXSW, having initially met Eddie there and this week having received my first batch of networking invites, planning my talk there, and collaborating with Brett Jenks, the CEO of Rare, who is both a customer of data.world and a Henry Crown Fellow (he’s attending SXSW for the first time this year). SXSW is the place of startup launches — Twitter having famously broken out at the big event. Over 75,000 people attend annually now!
data.world is the sixth startup that I’ve co-founded and led. We went with the stealth mode approach prior to our launch, as I’ll reflect on at the bottom of this lesson. We also went with the stealth mode approach at Bazaarvoice, but not at Coremetrics. I’ve given stealth-or-not advice to many entrepreneurs, and I pose this lesson to you as food for thought. As with much of my entrepreneurial advice, the right answer very much depends on the unique nature of the startup and its co-founders.
So here we go with this lesson from The Entrepreneur’s Essentials. It was first shared at Lucky7 on Dec. 16, 2012. I made very few edits to the original post below, mostly in the area of readability and grammar (not in substance of content):
When Brant Barton and I founded Bazaarvoice, we decided to be in “stealth mode” for the first eight months. This was because of the incredible response we were getting from our initial conversations with prospective retail clients as well as several other factors:
- Our initial solution had been built by Josh Baer’s team and it wasn’t very hard to replicate at the beginning. We needed time to grow the solution into something that would be harder for competitive entrants to easily duplicate.
- Everyone in the eCommerce industry, including the Shop.org community, was wondering what company I would found next. They expected it to be good based on the success that Coremetrics had enjoyed. At that time, clients loved Coremetrics. This put the spotlight on me with both potential clients and competitors. I could waste no time.
- One of the most fierce, new competitors we had at Coremetrics had been Visual Sciences. They stayed in stealth for 18 months while we, Omniture, WebSideStory, and WebTrends tried to get any information we could on how to compete with them. Alas, we could not, and they did a pretty good job of disrupting all of us. They went on to build a pretty large business and then merged with WebSideStory and later Omniture bought WebSideStory, which had changed it’s name to Visual Sciences because WebSideStory was never a very good name (read #7: What’s in a name?), or frankly a good reputation in the industry by that time. In any case, Brant and I learned from Visual Sciences that stealth mode could be a good thing in the right situation. I think Visual Sciences stayed in stealth too long, though — and that is why they never led the industry like us or Omniture. At some point, you need to aggressively come out of stealth mode and market and sell like crazy to win. Their CEO was ultimately too protective and too conservative. But I’ll grant that he taught us a lot and had crazy-good engineers.
So, by being in stealth at Bazaarvoice, we got a head start in the nascent industry but we knew we had to run quickly to lead it. PowerReviews was founded just a few months after Bazaarvoice — and funny enough, they were initially in stealth too with their first company name being Pufferfish. They were also serial entrepreneurs, having founded the eCommerce site Fogdog.com before. Bazaarvoice came out of stealth mode roaring, though, and Sam Decker, our founding CMO, did a great job blogging on the launch and my long-time friend, Emily Brady at Brady PR, did a great job garnering the media attention that we had been waiting until the right time for — when we had strength. We had the referenceable client base and the funding from Austin Ventures, First Round Capital, Ralph Mack and Julie Constantin (both of whom had backed me at the beginning of Coremetrics), Eric Simone, and Jamie Crouthamel (the founder of Performics) to run fast. We knew we had to quickly branch out and build more solutions than customer ratings and reviews to have a real platform — and today Bazaarvoice has a broad Conversations platform, network solutions (like Bazaarvoice Connections), analytics (Bazaarvoice Intelligence), and now advertising for the network with the acquisition of Longboard Media. [EDITOR’S NOTE: These products have different names in 2019 than they did in 2012 when I wrote this post and there are other new products today as Bazaarvoice continues to broaden its offerings.]
When I meet entrepreneurs that won’t share their business idea, I’m very skeptical on them as entrepreneurs. This doesn’t mean that I don’t believe in being in stealth mode — of course I do. But you should share your business idea with the “right” audience, especially those that can really mentor you or that you can sell your solution to. I’ve actually never seen an overly protective entrepreneur build a very large company. For the eight months we were in stealth at Bazaarvoice, we showed potential clients everything — how our solution worked, how our services worked, and what our product roadmap was — because, after all, they were betting on a very small company with few resources at the time. And we signed and launched clients like CompUSA, Golfsmith, and PETCO, and we ran like hell to lead the industry. Clients will give you all the credibility you need, even when in stealth, as long as they will serve as a reference because you’ve done a really great job for them.
Below is only thing you would have seen when you visited the Bazaarvoice website during our first eight months in business. People thought, “What a bizarre company”, and some probably thought, “Has Brett lost his mind?”. Oh yeah, and the image below when we were in stealth mode didn’t include any of that original text — just the image and our first logo. I didn’t want to give away too much to just any viewer. At tradeshows like Shop.org and eTail, clients would ask, “Does it mean speak no evil?”. Yeah, I guess you could say that. You are going to need to embrace the negative voice of your customers, and quick. They are talking to each other anyway. But remember that this was 2005 — and Facebook was closed to the public, Twitter didn’t even exist, there was certainly no Pinterest, and there were no iPhones or Android phones at that time (where so many social interactions occur today). So, I guess it did look a little bizarre after all… but it worked. The intrigue factor was high and it didn’t make it so difficult to get an audience with the right people. Convincing them to embrace negative reviews, however, was a huge challenge but that’s outside the scope of this post.
BTW, all credit goes to the genius Jacob Salamon for creating the image and text above, which hasn’t been seen outside of Bazaarvoice until now. He was our first intern, and credit goes to my good friend Gary Hoover, the founder of Hoovers (now owned by D&B), for introducing us (Gary’s blog and books are really good, BTW). We paid Jacob in stock only. But I told him that stock would lead to one of the highest paid internships in Austin history. And we laugh now about how I was right. In 2012, he left Bazaarvoice after spending a year as our head of marketing in Europe and around six years with us overall. He lives in Los Angeles now and is pursuing his dream of being a producer. You can see his first viral video series below (it is called Bubala Please and already has 600,000+ views in a few weeks — but don’t watch this with your kids!). I’m very happy for him — he is a real Renaissance man and someone that I am proud to call a good friend. [EDITOR’S NOTE: Wisecrack is the name of Jacob’s company today and it has over 2.5 million subscribers on YouTube. The content is genius.]
So that is the end of the lesson as I wrote it six years ago on Lucky7. How did my co-founders and I apply this lesson at data.world? Well, we were very stealthy. We knew we had a lot of functionality to build and in fact data.world is the most complex technical build of our careers. We wanted to make sure when we launched there was enough functionality for the very broad, global community we were trying to attract that it would “take”. And it worked — today we are the world’s largest collaborative data community and getting cited regularly for changing behavior. We are also helping enterprises with our modern catalog for data and analysis, a new category that analysts like Gartner and Forrester are helping educate the market on.
When we first put up a website at the end of 2015, our website was stealthco.world. We thought that even the name data.world would be too telling. This is what it looked like (data.world redirected to it, but no one knew that name):
And then when we jettisoned stealthco.world and announced our funding for data.world in Feb. of 2016, we queued up interest with the following form. You can see that we didn’t give away much — this is all you saw on the home page (the quote from Mikael Hagstroem at the World Economic Forum may have seemed telling, knowing what we do now but many guessed wrong back then):
When we finally launched the data.world platform on July 11, 2016, we gated initial access both for performance reasons and to really make sure we studied how our initial community members were using our platform. It was only later in 2016 that we took all of the governors off and the floodgate of community members rushed in. Word of mouth had helped our cause.
I want to thank Brandon Gadoci for the images above and our visual design overall. He’s brilliantly talented and we are lucky to have had him with us since almost the very beginning.
How have you done it — or seen it done — as an entrepreneur or startup team member? I would love to hear from you in the comments.
