By Fernando Berrocal

Stealth Mode Startup is a way of launching a Startup in secrecy due to technical and marketing approaches. So, what are exactly the main advantages of working on a startup in secret, or the famous "stealth mode," before launching it? For years, businesspeople have been perplexed by this theoretical question. This behind-closed-doors technique was popular a long time ago, in the middle of the first decade of the 21st century, to make a startup ready for the big time.

As more young entrepreneurs rise through the ranks (and graduate from different business schools around the globe), everything is shifting toward a more open-source approach in the business and startup world. When you go over in detail the drawbacks and benefits of launching in “Stealth Mode” you will find out why some Startups are still choosing to do it while the majority of other types of businesses won’t.

Here are some of the disadvantages and advantages of going stealth before launching:

Disadvantages:

1. Prevents the Formation of Pre-Buzz: This is one of the primary benefits and a major reason why businesses choose to start in public rather than in stealth mode. Customers and members of the development local community may be anticipating the launch of the business. 

This is what happened to OpenKit, a San Francisco-based social game platform.  Their founders revealed their main product last year before they sat down to figure out how they'd put it together, as part of a concentrated effort to gauge developer enthusiasm. As a result, a large number of people have come out to support the initiative.

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2. Limits Feedback Opportunities: Unsolicited input is another advantage of embracing openness as part of the development process of the business idea, and one that can help you in the long run.

In a prior life as a co-founder of an online gaming company, Danielle Cassley, head of Red Bird Studios, a consulting company in Granite Bay, California, understood this firsthand. Aurora Feint, which has since been bought and rebranded, chose to go stealth during launch and, according to Cassley, ended up going to market without valuable customer and market input.

3. Why a Little Stealth Can Make a Big Difference: Obviously, there are pros and cons to starting up in stealth mode. So, what should a founder do? Here's how to get your startup the best of both worlds. While most entrepreneurs appear to disagree on the benefits of stealth mode, they can all agree on one thing: secrecy in moderation isn't always a terrible thing.

Cassley, a Redbird Studios consultant, agrees, encouraging entrepreneurs to stay quiet about their corporation's main differentiators and instead go out into the business and actively seek advice from counselors, mentors, and potential consumers about the marketplace and overall usefulness of the product.

Advantages:

1. Provides a Valuable Anonymity: Nonetheless, anonymity has its virtues. Jason Chicola, the 34-year-old CEO and founder of Rev.com, a San Francisco-based creative-services provider, says that operating in secrecy for the majority of 2012 allowed the business to solidify a strategy for adding new capabilities rather than wasting resources and funds on branding before it was ready.

“Trying to handle branding and PR is a distraction that may get in the way of entrepreneurs accomplishing what matters most, which is making the product good enough for it to be successful” adds Chicola who goes on to say that the company's name was finally changed from FoxTranslate.com.

2. Protection of the Intellectual Property (IP):  Operating in stealth mode can also assist in the protection of intellectual property until the product is released. Coravin, a wine accessory business located in Boston, has a similar narrative.

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When the business launched this summer, co-founders Josh Makower and Greg Lambrecht revealed that they had been working behind closed doors (and under non-disclosure agreements) for the greater part of a decade, refining specifics on the flagship product so no one would steal the concept. Coravin is a product that uses surgical needles and argon gas to allow wine consumers to get wine from a bottle without having to remove the cork.

“The last thing we wanted after all of our hard work was for someone to see the product, replicate the idea, and bring it to market before we could,” Makower adds. “It's one thing to tell people you're doing something distinctive; it's quite another to protect your intellectual property.”

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