Stealth start-ups suck

Update 6/22, 10:45am: 24 Hour Laundry CEO Gina Bianchini responds with comment, below.

Do you stay stealth or not? Not long ago, we interviewed with the partners at Kleiner Perkins Caufield Byers, a respected Silicon Valley venture firm. Partner John Doerr carries quite a dose of credibility, having backed Sun, Netscape, Google, you name it. He argued that stealth for most companies is a good thing. By and large, in the weeks following that published Q&A, we talked with many other venture firms that seconded that sentiment — so we thought case was closed.

But news of a stealth Marc Andreessen start-up 24 Hour Laundry has whipped up criticism of staying stealth, and the consensus seems to be leaning toward transparency — at least as far as Web start-ups are concerned. This is an important question, since so many Silicon Valley start-ups grapple with how open to be. Mark Fletcher’s critique of stealth start-up (we copied his headline) seems pretty convincing. Stealth sucks because it ropes you off from valuable user feedback — the real fuel of success. He too knows what he’s talking about: He recently built Bloglines very quickly and sold it successfully to AskJeeves. And before that, he co-founded a company that became known as eGroups, bought in 2000 by Yahoo for $420 million.

(Update 11:18am: Here is a post by Diego Doval, an actual insider at 24 Hour Laundry, shedding more light on why it has remained stealth. Fair enough.)

Meanwhile, Jeff Nolan, over at SAP Ventures, says “I can’t think, off the top of my head, even one of these famous stealth companies that went on to greatness, can you?” Good challenge, Jeff. Gosh, there’s got to be a few out there, but we can’t think of any. Even if there are, the point is a good one: Stealth might be overrated. It’s easier to think of the stealth companies that didn’t succeed as expected. Segway, the high-tech scooter, came to mind before Fletcher mentioned it too. Wonder if it would have been adopted more swiftly had Dean Kamen opened up and consulted with potential corporate customers, individuals and transportation officials (about regulatory challenges of using it on roads and sidewalks) before presenting it as a done-deal? And were there really competitors lurking to steal the idea? Even if there were, they might have helped grow the market — two companies lobbying the Kafkaesque bureaucracy, instead of one.

Though Russell Beattie comes to 24 Hour Laundry’s defense.

What do you all think? And can you think of any examples of stealth web companies that made it big?

Update 6/23: A more nuanced take by Jeff Clavier, favoring stealth in many cases.