When Should Your Startup Emerge From Stealth Mode?
“That seems like a real waste of money,” I said to Adolfo. We had just closed our initial funding of $12 million, and my co-founder and VP Marketing had just suggested that we publicize it. In other words, Adolfo was suggesting we come out of stealth mode.
“Why?” Adolfo asked. “It seems to me that we’ll get a lot of great publicity.”
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“You’re right,” I said. “We will get a lot of great publicity, but what can we do with it (the extra publicity) now? We don’t have anything to show for it except the money.”
“But we can use the publicity to help us recruit engineers,” Adolfo said. Again, Adolfo was correct.
“How long will the bump (from publicizing our launch) last?” I asked. “One day? Two days? Even if it’s a week, it will not matter.”
You only get one chance to launch your company and come out of stealth mode.
So, we didn’t announce our funding to world at that point. We stayed in stealth mode. In fact, we didn’t even file with the SEC.
I felt, right or wrong, that we should wait until we would get the maximum benefit from coming out of stealth mode. That moment for us was after we announced our second set of products.
I know what you’re thinking. Why wouldn’t you come out of stealth mode with your first product?
Our company wasn’t the typical, one product startup. Each product, in our model, would generate around $500K per year in revenue when it peaked.
This was typical of an Analog IC company like ours. That meant, you needed to introduce multiple products in order to get to scale and continue growing.
The second set of 16 products was set for release a few months after our initial one-product soft. That would be our main event.
In our case, our first product was a soft launch. We wanted to test our systems to make sure they were all working.
You’ll need to do a lot of planning and co-ordinating for your emergence from stealth mode.
Mary, our PR person, worked with Adolfo, and me on organizing the publicity for our launch. Our goal was to set up interviews with all the major trade publications in our industry.
Mary got the editors to agree to “embargo” the stories until our launch date. This is a normal practice that editors are happy to do. Now we would have stories ready to go on the day we launched the 16 products.
In parallel, Adolfo managed the launch and development of our new website. Until the launch, our website had been a crappy Go Daddy site. But, hidden behind the scenes was a much more professional web site.
It wasn’t complete until about 4 AM of launch day. I remember Adolfo and I checking and fixing broken links until late in the night, but we got it done.
We did interviews with all the major trade publications in our industry. We issued press releases introducing our second set of products and announcing our funding.
Time your emergence from stealth mode to generate maximum benefit.
The morning of our official launch, the stories about us dropped on all the major trade publications. Boom! Our traffic skyrocketed.
For the next three days our web traffic went crazy. More importantly than that, we received a ton of sample requests for our initial products. Orders started coming in. Our launch was a success!
Then, we went back into obscurity (LOL!). Our web traffic fell, not to our pre-launch lows, but about 50% lower than the highs of our launch.
Your launch from stealth mode will only have a short term benefit.
Marketing and publicity is an iterative process. Each subsequent launch we had built on the success of the previous launch. And each time, the process would repeat itself.
We would have a bump in traffic when we launched. Then traffic would drop, but always to a higher level than previously.
However, if we would have emerged from stealth mode with no products, I believe the publicity would have been, in our case, completely wasted. Launching our company with the combination of announcing our funding and our new products gave us credibility and a larger bump in traffic because the story was more interesting.