This post is a follow-on to The Scrappy Startup: Asset or Liability?
TechCrunch has a great post today by Vivek Wadhwa:
Stealth Startups, Get Over Yourselves: Nobody Cares About Your Secrets.
The essence of the article is that operating in stealth usually involves a shitty trade off. Operating in stealth offers protection against the risk of others stealing your idea. In exchange, you lose the opportunity to talk with customers, suppliers, investors and smart people outside of your organization. As he puts it:
Learning what a customer needs is an iterative process. You try something, get feedback. Both you and your customer learn more and you try again. You keep doing this until you have something which is so compelling that the customer will pay money to have it—that’s when you know you have a killer product. But you can’t get feedback if you’re in stealth. You only have yourself to talk to.
Most entrepreneurs say they are in stealth because they are worried about competitors stealing their ideas. This can be a risk if you have such a simple idea that just by hearing it, someone can replicate it. If this is the case, then you do have a lot to worry about. But even in this case, what will ultimately make the difference between success and failure isn’t your idea but your ability to execute and dominate your market very fast. You need a superb management team including top notch marketing and sales staff, great industry connections, and deep-pocked investors. You aren’t going to get any of these things by staying locked up in your basement.
I couldn’t agree more! But there’s one other group that the scrappy entrepreneur needs to talk to and attract: Engineers!
Unless you have money, it’s really hard to get talented people to join your crazy, against-all-odds venture. And unless you have talented engineers on your team, it’s hard to get money. Very much a chicken v egg problem.
The solution? Radical transparency.
At the same Columbia Job Fair that I wrote about in my previous post about The Scrappy Startup: Asset or Liability?, I did something fairly radical for a pre-launch startup: I wrote a five-page explanation of our product vision (only some of which had been executed) and our business plans and gave it to every engineer I met or that came to my table. Plus, I answered any and all questions they had.
Mind you, this was an Engineer job fair–these are people who could actually steal and execute all our ideas.
The end result? Even though I missed half the job fair because I was still writing/printing out our propaganda, I left with 150 resumes and access to some absolutely amazing talent. We ended up hiring two guys we met there, and may still hire more.
Now, I’m learning all this shit as i go along like anyone else, and I don’t claim special knowledge. However, I’ve thought a lot about why this strategy actually worked.
Here’s the key lessons:
#1 I showed up in a T-shirt & jeans, which is to say we embraced our startupness and wore it with pride. This doesn’t happen at most Ivy League career fairs.
#2 We made it clear that we were looking for generalists who could solve problems fast and learn quickly and we set the bar low in terms of experience. <b>Young, talented, and hungry? SpeakerText is the place for you!</b> This, I’m gonna guess, attracted a lot of people and created buzz.
#3 Our product description and plans were aspirational, they laid out a vision of a better Internet, and by implication, a better world. We laid out big, hairy, audacious goals and offered prospects a slice of the action.
#4 This is perhaps the most important point: We demonstrated trust, and in doing so, earned their trust. More than anything, being secretive, being stealth and making people sign NDAs up the wazoo sends a message that you don’t trust them, that you think they might fuck you. And when people get that vibe, they assume (consciously or not) that you yourself are not trustworthy, that you might fuck them. This is not the message you want to send to people you’re gonna ask to commit to a journey filled with hardship and that will probably fail.
As they say, you want missionaries, not mercenaries.