ON THE DEEP STEALTH MODE
Quite a few visitors to our website are surprised that there is no information about the startups Kuruvindum has invested in. A bit more extreme reaction from one visitor was that “This (absence) is downright eerie…..”. He/she was probably a Bram Stoker fan but yes, the absence does appear strange; or at least until the underlying rationale is explained.
This apparently “eerie” absence has a simple explanation viz that our investee companies and we operate under a so-called "Deep Stealth Mode”. This means that we at Kuruvindum prefer to divulge zero information concerning our current and future investment status as well as our investee companies’ business objectives, technology developed (or WIP), future plans etc.
The deep stealth mode is relevant to Kuruvindum because information concerning our bets on early-stage tech-intensive start-ups can conceivably be of use to current and/or future competitors.
Intel's Andrew Grove famously said that "Only the Paranoid Survive". This is not at all a bad philosophy, provided of course it is used judiciously and not allowed to become an obsession. After all, this philosophy, his brilliance (and certainly more than a little bit of luck) took him to the pinnacle of success and recognition, including Time Magazine's "Man of the Year" in 1997.
To digress a bit, we have sometimes also wondered about the ambiguity Andrew Grove (a person who fled Soviet repression from his native Hungary at the age of 20) would have felt about the Time "Man of the Year" honour, given that earlier "Man of the Year" awardees had also included well known champions of personal freedom and proponents of religious tolerance such as Deng Xiaoping (China, 1978) and Ayatollah Khomeini (Iran, 1979) respectively.
Or perhaps Andrew Grove consoled himself with the Time definition that the "Man of the Year" (or rather, since 1999, "Person of the Year") is that person who, in the just concluded year has had the most influence on its events "...for better or for worse" (emphasis added by Kuruvindum).
Coming back to the "paranoia' theme; we feel that in our context a healthy degree of paranoia is desirable not only for mere survival (a la the previously cited Andrew Grove book title) but for our continued growth as well.
Consider -- Our start-ups generally have significant, innovative technology IP (whether existent or under development). Plus, depending upon where our start-ups are in their respective timelines, they could be engaged in one or more of various other planning/execution activities. A premature disclosure of information (even if inadvertent) concerning any of the foregoing can lead to one or more of many undesirable outcomes. For example, it could well inspire a me-too technology to be developed/launched and/or it could equally lead to a competing product being rolled out ahead of us. These, and other equally dire outcomes can well prove potentially debilitating at best, and fatal at worst, for the Kuruvindum investee start-up concerned, with the consequent direct hit upon Kuruvindum bottom line as well.
Given the above, an optimal policy becomes obvious -- avoid discussion or disclosure in public fora of any information concerning our invested companies until the time is right for a big-bang disclosure. We believe, and all our associated entities have till date agreed (albeit with various degrees of initial skepticism), that this deep stealth mode best serves our respective interests. The stealth policy thus has our various entrepreneurs’ informed concurrence as well.
A deep stealth mode policy does not mean that our investee start-ups, the associated entrepreneurs etc are supposed to be cut-off and totally incommunicado from the world. All that it means is that the start-ups (and Kuruvindum as well) consciously and continually avoid disclosing even minute details of sensitive or potentially sensitive matters, ideas etc that can enhance competitors’ knowledge of our current (or future) status, plans etc.
By now, an alert reader would have identified one obvious problem in the above discussion of deep stealth mode implementation viz that identifying precisely what is “sensitive” or “potentially sensitive” can turn out be highly contextual, not to say contentious as well. We try to avoid (or side-step) this conundrum by erring on the side of caution. Hence the ultra-conservative (and presumably the safest, or at least we hope so!!) approach Kuruvindum takes -- mask anything and everything that can potentially become even a minor input to existing (or future) competitors and thus which can erode our start-ups’ head-start, competitive advantage etc.
If business is interpreted in war-like terms (as many Sun Tzu fans do), then what better than to quote him --"In conflict,.....surprise will lead to victory. Those who are skilled in producing surprises will win". There are of course other (non Sun Tzu) war metaphors as well that can illustrate the merits of an extreme ultra-conservative approach e.g. "Overkill is better than under-kill".
Apart from deep stealth’s various competitive advantages as detailed above, there is a possible later-stage benefit as well. As any given start-up approaches commercialization, a properly implemented deep stealth mode can be easily transmuted to a great marketing device, especially if backed by an outstanding product. The buzz and general excitement about such a product launch gets amplified considerably if there have been zero media leaks (and consequently nil expectation overload, zero customer fatigue etc) during the development stage earlier. Sun Tzu again (not because we are great fans but because China and everything Chinese seems to be like the ice-cream flavour of the month) -- "Hence those who are skilled in conflict are like an arrow on a drawn bow, ready to be released at the opportune moment." (underlining for emphasis has been added by Kuruvindum)
A caveat – deep stealth by design has worked well for us but the advantages are obviously highly situational to our very early-stage context (and to the influence of our Andrew Grove readings?). Deep Stealth is not as relevant for later-stage VC’s or for private equity (PE) firms as it has proved to be for Kuruvindum.