Guy Kawasaki has a rule of thumb: "The more a company believes they must be secretive, the less they have."
Eric Ries says, “If a startup can’t innovate faster than a much larger competitor, stealth isn’t going to make the difference -- they’re toast."
Vivek Wadha has this to say on his blog at Techcrunch: "Stealth startups, get over yourselves -- nobody cares about your secrets."
There's certainly a role for secrecy in the innovator and startup world. But at a certain point, is there any value to concealing your idea? And in expending so much energy to keep it under wraps?
Here is a partial list of startups currently in, or recently emerged from stealth:
Bloom Energy was in stealth for years until an epic unveiling of its world-shattering product: wait for it -- expensive fuel cells. Despite the spin applied by the Kleiner Perkins hype machine, this product was still decades-old technology powered by natural gas. That leaves Bloom, a now long-in-the-tooth startup, relying on Advanced Equities to continue funding a money-losing business while searching for incentive-laden regions. Did stealth help?
EEstor, another Kleiner Perkins-seeded firm, remains in stealth a decade in and has yet to produce a commercial product other than a cottage-industry of conspiratorial-minded bloggers.
Senergen, a VantagePoint Venture Capital-funded solar firm, never made it out of stealth before it went out of business. Perhaps not being in stealth would have been the right strategic move.
Xtreme Power is an energy storage firm which reveals very little about its battery technology -- presumed to be advanced lead-acid. Here's how the Hawaii Free Press reacted to Xtreme and its stealthy tendencies.
ArrayPower, a solar electronics firm, just came out of stealth, and Solexel, a Kleiner-backed solar module maker, still keeps its technology under wraps. As does Amprius, a battery firm, and, to a lesser extent, Alta Devices, a galium arsenide (GaAs) solar firm.
Another stealth firm, Nest Labs, is creating a "[C]limate control system consisting of a digital thermostat that automatically sets climate conditions based on prior and historical patterns of climate settings selected by users; climate control system consisting of a digital thermostat that can be controlled wirelessly from a remote location; software application for use on computers and hand-held devices to control climate and energy usage in homes and businesses from a remote location." (This information comes from now-removed trademark filings.)
It sounds a lot like EcoFactor, a company we've covered on numerous occasions.
Rumors have Nest funded with $50 million to $80 million in venture capital from Kleiner Perkins and other VCs, along with a "very high" valuation.
Kawasaki adds: "What’s going on in the entrepreneur’s brain? 'My idea is so astounding that if people just hear it, they will drop everything and implement it.' Bottom line: if merely hearing about your idea renders it defenseless, you don’t have a defensible idea."
Greentech Media will continue to keep our eye on these stealth firms in the long run, exploring whether stealth was a sound route to market.