

Ask YC: Why are startups secretive? - rzwitserloot

Startups tend to be secretive. Some are secretive about their startup plan ('stealth mode'). Most are secretive about for example number of (active) users.<p>I wonder why that is. There are definitely more ideas floating around than capable entrepreneurs, which suggests that spilling the beans on your idea isn't a big risk. Being secretive about your statistics is even more confusing to me. Is there some sort of upside to valuation that I'm missing?
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tptacek
I can give you two good reasons for being secretive that you may not have
considered:

* If you're entering a competitive space --- and particularly if you have a direct sales model with medium-long sales cycle (ie, you sell to companies) --- your competitors can neutralize you without copying your features. All a company with a shipping product has to do is "roadmap" your features for you to lose competitive advantage.

* There's what Joel calls "The Marimba Effect". As long as you keep quiet about what you're doing, your failures and missteps don't count against you. Once you launch, prospects can start to form an opinion that's hard to shake off.

I can't say that these are dealbreakers if you're starting some social
calendaring service for pets, or (like most YC'ers) considering some kind of
social network code autoindentation product for MzSchemers. But we are not
awash in examples of companies that opened up early, launched small, and went
on to huge success.

~~~
mechanical_fish
I think the Marimba Effect is the key point. You've highlighted a problem with
the original submitter's question: It focuses too much on how the
_competitors_ will react when you announce an idea before shipping a product,
whereas the primary concern should be how the _customers_ will react.

I just watched a talk by Mac developer Wil Shipley, whose advice is "Don't
announce until it can be downloaded. Don't let it be downloaded until it can
be bought." Otherwise you spoil a lot of perfectly good hype.

There are, of course, some exceptions to this rule in the webapp world -- for
example, if you're starting Ptacek's social calendar for pets, you can't even
_build_ the product without having customers, since social networks without
members are completely useless. So you're forced to bootstrap.

------
pg
Though inexperienced founders usually err too much in the direction of
secrecy, it does have its uses. For example, because they didn't talk too much
about what they were doing, Justin.TV was able to catch Ustream napping when
they launched. Ustream had to frantically launch the next day with something
that was way behind JTV's technology.

~~~
pyrillix
Interesting commentary but not factually accurate, Ustream actually was ahead
of JTV in its launch. JTV has found a comfortableniche in lifecasting which
was never Ustream's business model. Virtually every feature found on live
video sites was a response to Ustreams features. You only assume the founder
were inexperienced because you havent really delved into their history, try
again..

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johnrob
I think there is a catch 22 when revealing your start up idea. Imagine if you
posted it on this site. You'd end up with two scenarios:

\- Nobody liked it. Your idea is probably unspectacular.

\- People responded well to it. Your idea, which just got validated, is now
also available for public consumption. This is troubling because the idea also
has a stream of positive comments, making it that much more attractive.

Neither of these outcomes are good, which is probably why start-ups are
secretive.

~~~
webwright
"- People responded well to it. Your idea, which just got validated, is now
also available for public consumption. This is troubling because the idea also
has a stream of positive comments, making it that much more attractive."

You should add to that what REALLY happens when people respond to it. They
start talking about it. They bury you in great ideas that never occurred to
you. They sign up to be notified about your private beta. You are incredibly
energized and motivated all of a sudden. You are no longer fearful that your
idea will totally fall flat. Recruiting gets easier. Good developers who are
interested in your problem/space seek you out. Investors (who know all of
this) don't think you are a total noobcake. You don't have to invest time or
money in stuff like NDAs or other secretive measures.

Stealth mode is 95% of the time totally ridiculous, with the risk of being out
there totally eclipsed by the reward. There is the 5% case, I suppose, where
you've truly invented something unique rather than just making something suck
less.

I'm also absolutely FLOORED by your statement that the "...Nobody liked it.
Your idea is probably unspectacular." scenario is not a good outcome. That's a
spectacular outcome compared to pissing away months or years building
something that you later realize nobody wants.

(IMO)

~~~
tptacek
Awareness is only really valuable if you're in a position to capitalize on it.
Has it been super valuable to RescueTime? You're still 3 "owner-operators",
plus "the occasional contractor". It obviously hasn't solved your recruiting
problems. From what I can tell, you've "closed" a "round" of YC funding. Got a
real term sheet yet? Did awareness do it for you?

I'm not trying to be petulant.

For you guys, awareness may convert directly into users, and users to a shot
at VC funding (though, if you're up and running already, god I hope not).

And on the flip side, in my field (security), there's an obvious need for
secrecy; we're a bunch of cutthroat motherfuckers over here. So my experience
doesn't translate to yours directly.

Just saying, the answers to questions like these aren't always
straightforward.

~~~
webwright
All good questions. The big wins for us at RescueTime (I imagine this would
vary by situation) were:

1) We got crazy excited and worked our asses off and ultimately set aside
great jobs to work on this full-time. I don't know if we could've sustained
the energy if we didn't have our users (and potential users) dragging us
along. 2) We applied to YC. I honestly don't know if we would've done this if
we didn't have such a great response to our "this is what we're building...
coming soon!" page.

3) We got accepted to YC. I dunno if it mattered, but it certainly is easier
to say "we're building something people want" when we've got a line of
thousands of people who have signed up for the beta, contributed ideas,
blogged about us, etc. Showing "love letters" from users was huge, IMO. 4) the
product is HUGELY better than the original vision IMO, because we've been
buried in several thousand emails from people who want certain things that
never occurred to us or didn't want things that we thought were important.

For VCs and for internal morale/energy, traction wins. There is simply no
substitute for being able to say, "people LOVE us" and being able to prove it.
There is nothing that keeps you working harder than users applauding your
featureset and clamoring for enhancements. At least for me.

Regarding funding beyond YC, we currently aren't looking for investment but we
might be eventually. We have been approached by several investors. Ask me in a
few months. :-) Either way, I think being out-there helps on this front, and
stealth would hurt us.

~~~
nextmoveone
hey, i was wondering if you might be able to show me your old 'this is what
were building... coming soon' page?

ty in advance if can/do.

~~~
webwright
You can see it sans CSS and images at:

[http://web.archive.org/web/20070509002443/http://www.rescuet...](http://web.archive.org/web/20070509002443/http://www.rescuetime.com/)

You can look at the live site and get the jist of how the images/css would
look like (it's not much different).

We detailed the process here:

[http://blog.rescuetime.com/2007/07/05/web-biz-how-to-
have-40...](http://blog.rescuetime.com/2007/07/05/web-biz-how-to-
have-4000-users-waiting-when-you-launch/) (4,000 turned out to be a much lower
number than what we eventually launched with)

~~~
nextmoveone
Hey I shot you an email.

------
nostrademons
Most are not. I've been amazed at how much various startup founders have been
willing to share.

Most, however, are selective as to who, what, and how they reveal. If you've
met a few times with a startup founder and gotten to know them, they'll tell
you a lot about their future plans. It's great to get feedback, after all.
You're expected not to blab that info about, but that's why they bothered to
get to know you before telling you stuff.

There's no point to indiscriminately spewing your vaporware all over the
Internet. If you don't have a demo or UI for people to react to, you probably
won't even get good feedback, and it'll lessen the impact when you actually do
launch (case in point: Arc). But if you _do_ have something for people to
react to, or you have people in a similar space that know your target market,
you can gain quite a bit from sharing your idea.

------
TheTarquin
As Howard Aiken said: "Don't worry about people stealing an idea. If it's
original, you will have to ram it down their throats."

That being said, previous commenters have pointed out that getting ideas
stolen isn't exactly the point.

Yeah, okay, so this comment is basically an excuse for me to spout a favored
quote, but really, it's one that's definitely helped me get over secrecy
paranoia in developing my own ideas.

------
mattmaroon
Mostly out of unthinking reflex and herd mentality. Startups are secretive
because past startups were secretive.

There certainly are benefits to it in some cases, but in most it's probably
best to just open your doors ASAP.

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a-priori
As someone who's been working in a "stealth mode" startup for the last few
months, I can relate. It wasn't my idea to work this way, but my partner
insisted. The reasoning is that there's two parts to the business and the
other part, the non-technical one, won't be ready for public consumption for a
while yet. Disclosing it now, when we won't be ready to fully launch for a
relatively long time, could be disasterous. As mechanical_fish said, we'd lose
a lot of perfectly good hype.

Mind you, I'd love nothing more to be able to answer people openly when they
ask, "so what are you working on anyways?"

------
samwise
There is HUGE difference between talking to people you meet and posting your
idea(s) on the internet.

However most entrepreneurs seek a one solution fits all and try to follow the
foot steps of others success. When in reality every idea/start up is different
and what might work for one startup will kill the other.

------
lanceusa
Here is my personal opinion:

I've been working on a project now for almost 5 months. I've been more free to
discuss my project lately because I think to myself that most are not going to
be as motivated as I've been nor are they going to sacrifice the long hours
and weekends I've poured into it.

I commend the creator of Pageflakes...if you read this guy's blog or articles
the guy practically hands it to you on a plate...yet I haven't seen many take
advantage of it. Except maybe Yahoo :).

I also believe that if your passionate about your idea you don't want it
contaminated with others ideas and views. Now, this definitely plays a role in
the future phases, but in the beginning you want to create your own idea...not
someone elses. We all want the credit, so we keep it under wraps until the
time is right.

~~~
ubudesign
I've been doing the same thing for the past 6 months. I agree. I guess the
details of an idea is what I would care most about before the release. I
wouldn't mind sharing my overall idea with a few people just to see what
details they have in mind. If it's good, I'd ask them to be my partner. And if
they take the idea and develop it into something better then me, then so be
it. they deserve it more.

------
jackdied
For the same reason that open source projects are started by one guy with
running code and not by committees talking about what to do. Everyone with an
opinion isn't necessarily your customer - they are just guys with opinions.

You could be non-secretive without being interactive or not taking opinions.
But that seems like burning PR early for a product you will be releasing soon
anyway.

Do talk with people who's opinions you already value. But you aren't Microsoft
so pre-announcing a product won't intimidate others into not competing with
you and it won't whet potential customer's appetite. Make something you know
you would use and then see how others like you respond.

------
DarrenStuart
In this day and age its fairly easy to take a concept and build it out for
little outlay.

~~~
pg
I don't think it is, or probably ever will be. There are always 1000 details
you have to get right.

I'm suspicious of projects described by appending that word "out" after
"build." It implies the speaker is underestimating the importance of
execution. In the best projects, execution is not merely important, but even
flows back into design.

~~~
DarrenStuart
If the idea is extremely simple and your team has talent then you could do a
better job with someones idea than they could.

I think build out is perfectly valid way to explain building more
functionality on a idea.

google didn't build ad functionality into from the start their search engine
it was built out afterwards. I come from a family of builders so this makes
sense to me.

I also don't agree with being secretive, ideas are a dime a dozen so no need
not to share.

~~~
brlewis
You're reading "build out" as "build an addition" while others read it as
"finish the job within a defined space."

<http://www.google.com/search?q=define%3Abuildout>

~~~
DarrenStuart
thanks, yes that explains it. make sense now :p

------
trekker7
Are there really lots of great ideas floating around, more than we can all
use? If so, please tell me two or three!

~~~
tx
Just pay attention to what you are reading. The problem of micro-payments has
been voiced many times on YC news, PG himself mentioned it in one of his
writings. Yet it took forever for TipJoy to materialize.

Why? Because of all the details. When I first saw this obvious micro-payments
problem I thought about it for about 30 seconds but did not come up with
anything significantly different than PayPal. I moved on, but someone decided
to spend more than 30 seconds on it.

------
NSX2
People are secretive so they can avoid the likes of a Marc Andreeson or a Mark
Zuckerburg. As you can plainly see, despite all the talk of "honor" and "our
reputation is the basis for our business" and not dealing with companies that
are being sued under suspicious circumstances, etc., even "top-tier" VC firms
will put their stated ethics aside and jump into bed with the money makers,
regardless of how they came to be that way. Who the heck wants to go around
for the rest of their life wondering "what could have been" if they kept their
mouths shut. And here's a little clue - just because VCs tell you they think
you're a noob for using NDAs, doesn't mean they respect you for mindlessly
taking their advice. Learn to think for yourself. What would you rather invest
in, as a VC - a guy who's taken measures to ensure that everyone who knows
about the idea is either part of it or prevented from copying it, or a guy who
spoke about the idea with 100 programmers who may very well be trying to
secretly implement it behind his back even though they pretended not to be
intested? It's called control, and when you're starting up, it's one of the
few things that are actually "in your control".

~~~
theoneill
I know what Zuckerberg is supposed to have done, but what did Pmarca do that
was iffy?

~~~
NSX2
Well, he was a student, one of quite a few, working on the base code of what
became Netscape Navigator. One weekend when nobody was around he decided he
wanted more out of the project than research credit, so he let himself into
the research lab when nobody was around, copied everyone else's code and took
off to get VC funding. Later he would dismiss the whole thing in typicall
dirtbag fashion, ie, "Well, you know, it's hard to recall who wrote what code,
and what counts was I got it out to market first, etc." So basically he stole
somebody else's work, took credit for it, and then hid behind the legitimacy
that financial success brings in this country.

~~~
pg
This sounds fishy to me. If he was collaborating with other people on Mozilla
he wouldn't have needed to "let himself into" (= "walk into" + furtive spin)
any physical place to get code. Surely he would have had access via a network.
And since Mozilla was open source, wasn't he within his rights to use this
code in a product?

Edit: I meant Mosaic, not Mozilla.

~~~
NSX2
I don't recall all the details since this was about a decade ago, but as far
as I can recall, Netscape got sued by the U. of Illinois & they wound up
settling out of court for millions. In addition, as for the open-source thing,
I believe it wasn't totally open-source originally which is what caused the
lawsuit when Netscape distributed the browser for free.

Anyway these points are off-track; in conclusion startups are secretive
because while execution may be crucial, so is being realistic enough to
realize you're not in the best position to execute properly and that it's best
to keep your mouth shut until you are, lest someone who is in a better
position to execute than you are run off with "your thing." And there are
plenty of people who can/would run off with your thing, take the credit for it
and not think twice about what happens to you as a result of their behavior.

~~~
brlewis
When you make accusations you should not go on recollection.

Mosaic was open source from its earliest days. Marc was not just one of many
students working on it, he was the most prominent developer on the project.
That's my recollection, but it's also what I find when I look for sources to
cite:

[http://1997.webhistory.org/www.lists/www-
talk.1993q1/0262.ht...](http://1997.webhistory.org/www.lists/www-
talk.1993q1/0262.html)

~~~
NSX2
Actually your "source" doesn't cite anything other than that he worked on the
project; I never debated that. As to whether or not he was the "most prominent
developer" on the project, well, according to history as written by rich
successful people, Bill Gates was the most "prominent developer" of the PC,
Larry Ellison was the most "prominent developer" of the database, and Larry
Wynn was the most "prominent developer" of casinos which have nothing to do
with mob connections, and Donald Trump is the most "prominent developer" of
mega-luxury buildings he had no hand in developing other than lending his name
to.

Seriously have you never been in a work situation where your boss took credit
for your work and claimed he was the most "prominent developer" of something
YOU did? I can't be the only one who appreciates Dilbert ...

~~~
brlewis
First, a little context. You're the one challenging the general consensus of
Marc's involvement with Mosaic, so the burden of proof is on you to show that
he was merely one of many students involved with the project. I'm merely
casting doubt on your assertion.

Second, the email I cited was written in 1993, before the WWW was anything
big. If, as you claim, Marc was one of many students, then he was improperly
crediting the work as that of himself and one other. Someone else from NCSA
would have spoken up on the www-talk list to set things straight.

If you want to change your story from him being one of many students to him
being the boss who took credit for his underlings' work, please be explicit
about it. Also, please cite a source.

~~~
NSX2
>> If, as you claim, Marc was one of many students, then >> he was improperly
crediting the work as that of himself >> and one other.

I don't know what email you're reading but the one I'm reading just has him
and one other guy signing off indicating they're members of a group; nowhere
does it say they're the only members, or the most important members, or the
members who did most of the work, or anything other than 2 people looking for
feed back.

Let's say you got an email from "Sue" from Apple requesting feedback on your
recent iPhone purchase. Does that imply that since sue works for Apple and she
signed off on the email, Sue is the most important person at Apple,
responsible for most the important parts of their more successful projects?

No, of course not.

~~~
nostrademons
> nowhere does it say they're the only members, or the most important members,
> or the members who did most of the work

You could also try reading Tim Berners-Lee's _Weaving the Web_ , where he
gives them credit for Mosaic. They're probably not _the only_ members (few
projects have _no_ outside involvement), but it's pretty clear from Berners-
Lee's account that they're the ones pushing things forward and implementing
stuff.

