Hush Hush

Quietly Scheming

Being stealthy involves more than just not saying anything. It actually requires a fairly formal set of tactics and strategies. For instance, Sommer says IQ4Hire placed special emphasis on strictly controlling the media and the public's access to employees. Sommer was a well-known software analyst at leading trend-tracking companies before becoming an entrepreneur, and software industry journalists and conference promoters showed acute interest in his activities. In his situation, in which members of his company scoped out trade shows where people were seeking IT professionals, "the most important thing you have to have is clear procedures about who will speak to the media and what kinds of events you will speak at."

Even when reporters aren't prowling around, stealthy firms typically require everyone privy to secrets to sign confidentiality or nondisclosure agreements. Investors, partners, suppliers, customers, prospects, employees and even job applicants may be asked to promise in writing that they won't reveal anything they learn about company activities. Unfortunately, nondisclosure agreements are sometimes difficult to enforce in court. And some people simply won't sign them. Venture capitalists, Sommer says, routinely declined to initial his confidentiality agreements, forcing him to seek money from individuals and corporations willing to agree to secrecy. "If you're trying to raise money in stealth mode," he says, "you've got a problem."

Stealthy strategies can get quite involved. For instance, many companies in stealth mode operate under a code name designed to throw the inquisitive off track. If your secrets are extremely sensitive, take extra care to physically secure them, keeping computers and files under lock and key, and even shredding your trash. That's not as paranoid as it sounds. Last year, Oracle CEO Larry Ellison admitted to hiring detectives to ransack Microsoft's garbage in an attempt to learn its archrival's strategies.

Stealth is not a risk- or cost-free strategy. Being stealthy can cost you customers, employees, partners and sales. You may have to pass on media interviews, meetings with investors and other opportunities that may be scarce later.

Stealth works best when you have a built-in ability to generate attention when you choose to. Most stealth successes involve very well-known people, such as Transmeta's Linus Torvalds, inventor of Linux, and Groove Networks' Ray Ozzie, creator of Lotus Notes. When these famous figures joined start-ups, inquisitiveness about what they were up to was intense. Without similar built-in interest in your company, you run the risk of remaining obscure even after you unveil your creation. "What if they don't take the bait?" asks Jones. "It can fall flat and be really clumsy."

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This article was originally published in the April 2001 print edition of Entrepreneur with the headline: Hush Hush.

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