Keeping our edge: Why we’re operating in stealth mode, and why it’s so common

By Ramsey Taylor, Bill Webster and Anne Bioulac,
July 17, 2020

In his 2007 TED talk, director J.J. Abrams discussed the importance of mystery, arguing that the uncertainty and curiosity it inspires fuels the imagination as nothing else can. “Mystery is the catalyst for imagination,” he said.

Mysteries inspire questions. They force people to interrogate what they know, what they assume to be true, and what may one day be. This is important to businesses because, just as directors want to inspire curiosity in their audiences, businesses want to inspire curiosity in their customers and fuel the imaginative power of their teams.

Understanding stealth mode

Put simply, a stealth mode business is a company that’s working under temporary secrecy to bring a new product or service to market. Many companies have used this approach to free their teams from following a path that’s too narrow, protect their market positioning, and launch truly transformative (and highly coveted) products. 

In 2016, CB Insights investigated the 14 most well-funded stealth mode companies. They discovered that, in just two years, these businesses raised a combined total of more than $250 million. Pensando, an edge computing startup, came out of stealth mode last year after securing $145 million in a Series C. In total, the company raised $278 million

The key to their success is irrevocably tied to the secrecy that surrounded the companies in their earliest years, i.e., to their stealth mode approach. 

Pensando stands as a prime example. They launched their services as a direct competitor to Amazon Web Services (AWS) Nitro. Had the business started its operations in full view of the public (and AWS), Amazon could have activated their massive resources and talent pool to drive the fledgling Pensando into extinction. Thanks to the secrecy afforded to them through stealth mode, Pensando was able to fund, develop, and successfully launch an edge computing platform — one that performs five to nine times better than AWS Nitro in terms of productivity and scale — completely under the radar.

As Jia Wertz notes, the stealth mode approach enables companies “to be first to market, leave competitors trailing behind, and most importantly, doesn’t allow competitors to copy ideas or launch a similar product around the same time.”  It comes as no surprise, then, that in June of 2020, there were more than 56,000 people on LinkedIn who listed their employer as “stealth mode company.”

The key benefits of stealthy operations

Stealth mode is widely known as an effective approach to marketing, one that’s meant to drum up interest via the air of mystery it inspires. In highly competitive tech ecosystems, it’s far more than that. It is a critical tool many tech companies need in their arsenal to protect their intellectual property. For where there are innovative ideas, there are always competitors. 

At Augustus, after detailed conversations with our technical experts, we decided that stealth mode would serve us well, as a number of rivals have expressed interest in expanding their dominance, and it would be all too easy for them to sidestep into our domains.

We have had a sizable and highly-talented team working on our products and capabilities for over a year. It would cause us material harm if someone swooped in, copied our ideas, and took them to market. We would have done the legwork, and they would have been the beneficiaries!

Our teams have secured several patents, but some technologies are still patent-pending, and a few are still in the early stages of the application process. Since we release few details, we are able to entice clients and secure recruits without risking any intellectual property that isn’t fully protected yet. The lead-time this secures also makes scaling far easier in the long term. 

An added benefit of being in stealth mode is that we can focus nearly all of our attention on incorporating feedback that enhances our offering. This allows us to refine our strategies to ensure we intelligently scale in the right direction at the right time. 

In this respect, and perhaps most critically, stealth mode enables us to avoid costly backpedaling. Since some components are still under development, we’re better prepared to accurately articulate our value proposition and positioning. Ultimately, stealth mode has proven to be an effective asset-saver in the content-saturated AI marketplace.

The perfect balance of details and mystery

Of course, that’s not to say that there are absolutely no drawbacks. One downside of using stealth mode is that we aren’t able to receive unsolicited feedback. Admittedly, such unsolicited commentary would allow us to more efficiently address the concerns of all stakeholders. However, instead of disseminating our work to the public at large, we seek input from current advisors, business partners, and select customers. In short, we are presently focused on one-on-one communications. This allows us to obtain critical insights into our business strategies and product functionalities without giving away our key differentiators. 

Our goal, for now, is to try and find the perfect balance of details and mystery.

And of course, stealth mode is not an eternal state but a temporary phase. For now, we will continue to quietly unveil our business to select customers and partners, incorporating the necessary feedback to refine our products and improve our processes as we continue to scale. Over the next few months, we will start unveiling exactly who we are and what we’ve been working on. That work partially begins today — with this piece, which explains just a small part of our approach. 

Eventually, we will fully exit stealth mode. But until then, we’re happy to give our teams a bit more breathing room to develop the unique innovations that spring from the freedom to imagine, and we’re happy to have others enjoy a bit of mystery.

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