Under the Radar

Quietly running your startup.

This article was published on May 19, 2010.
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My friend Anthony Volodkin of Hype Machine once said to me: "Tech coverage is nice for showing your mother." I couldn't agree more. Anthony's Hype Machine is a bootstrapped company, like Carbonmade, with little coverage from tech publications or mainstream press. We were having dinner and the topic of why we like it like that came up. Then last week it came up again with another set of entrepreneurs. I want to expand on those two conversations here.

Under the Radar

Tech Coverage Can Help, Sometimes

Tech coverage is almost impossible to say no to. And why would you? Human beings are programmed to (1) want external feedback and (2) be talked about. If TechCrunch, GigaOM, etc., want to cover your startup, then you're going to be thrilled and sure as hell going to provide them with answers to any questions they may have — within reason.

Tech coverage alone, however, has little to do with your success — almost nothing in most cases. There is the occasional company that it can truly make a difference for. An obvious example today is Foursquare, which has been the media's darling the past year, appearing in every tech publication and most offline publications too — like the New York Times, Wall St. Journal, and others.

Arguably, Foursquare would probably have gotten to where they are today through the quality of their product and their team alone, but still, hundreds of thousands of their 1.2 million reported users must have come from these write-ups. For them, without a doubt, tech coverage has played a huge role in their growth. Foursquare's success relies on huge numbers of people — it's useless if none of your friends use it — so every one of those new eyeballs is a potential customer. That's just not the case for most startups.

Other companies like Carbonmade and Hype Machine rely very little on social networking. These products work as well with one user as they do with ten million. Not only do we not need a large network of users to be successful, it's also the case that the tech audience has little reason to use our products. Coverage may lead to a few hundred signups from interested entrepreneurs wanting to know how our product works, but they'll be in and out by the end of the day.

Carbonmade, Hype Machine, and ninety-nine out of a hundred startups out there should instead be going after press inside their market. For example, Carsonified — one of the leading design blogs — wrote about Carbonmade a few months ago and the signups from that article drove returning users. Publications in which the readership is made up of the same people who would use your startup is where you need to be focused. Don't go out of your way in search of anything else.

Overhype Can Be Deadly

It's like being the popular kid in high school. The spotlight is both good and bad. You'll get the pretty girls, invited to all the right parties, and looked up to as the cool guy. But with that special attention you end up spending more time maintaining your superfluous rep than studying and improving your future self.

When you're running a startup you can easily slip into caring more about the image of your company than its inner workings. An example of this is when a company announces a round of financing and everyone applauds their "success." What success?

Last week when this topic came up over dinner, we talked about one company in particular that raised money riding the hype of the hottest new thing: location based services (LBS). While their product wasn't even near ready yet, on all the tech blogs their name was being lumped together with the other companies in that sector. This was partly due to the sector they're in and partly because of the list of investors they'd attracted.

When their product was finally released, they had a flood of new users trying it out. Sadly, the product needed a lot more work, and all these excited new users were disappointed and turned off. It's just like going to see an overhyped movie and being disappointed that it didn't deliver. You're more upset now, because you'd played it up so much in your head. If you had simply gone and seen the movie with no expectations, then you'd be focusing on the good rather than the bad.

This company is now struggling to stay afloat under all the extra pressure of the hype. They have to constantly innovate to try and shake off the stigma of an under-whelming product, which puts a lot of stress on the team.

Staying "Stealth"

Besides the struggle to live up to overhype, there is the constant threat of copycats if you get too much tech press. Just look at what's happening to Groupon and Gilt. Their hype (well deserved) has led to hundreds of copycats in the United States and overseas. These copycats are little threat to Groupon and Gilt these days, but there are plenty of smaller startups that may not fare so well with added competitors.

It's now considered best by many startups not to disclose that they've received funding. They want to attract less attention. Given how quickly you can build a product and raise money these days, it's better to keep things low key for as long as possible.

People come up to me all the time thinking that Carbonmade is a little side project or just a part-time thing. "You make money on that?" they ask. "Just enough to get by." I respond. Why invite more people into your space? Check your ego at the door. You don't need to talk about the 1.5 million you raised, the 10 employees you have, or the swanky new downtown loft you're renting.

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