Startup launch benefits more from social media than stealth strategy

Entrepreneurs probably had better luck securing a hug at one of the raucous healthcare town hall meetings than raising venture capital in 2009.

Entrepreneurs probably had better luck securing a hug at one of the raucous healthcare town hall meetings than raising venture capital in 2009. But with evidence of a thawing funding climate, 2010 promises a healthier diet of notable startup launches and, potentially, more opportunities for PR to play a key role for these companies.

The PR strategy for early stage companies has often involved a period where the startup operates in stealth mode, followed by a big PR splash at launch. TechCrunch contributor and Harvard and Duke University professor Vivek Wadhwa recently offered a skeptical look at the business and PR benefits afforded by the stealth mode approach, arguing that many technology startups operate in stealth mode for fear of tipping off competitors or releasing an imperfect product or service. Logical concerns on the surface, but overblown in his opinion.

What Wadhwa only touches on is how social media networks are transforming the opportunity cost of stealth mode. Before the advent of channels like Facebook and Twitter, avenues available for startups to quickly reach a mass audience were fewer. As a result, the PR opportunity cost (opportunities lost by not engaging with customers and influencers) for a startup spending months in stealth mode was lower.

Because startups can leverage emerging social media channels to gain a large customer following, arguments in favor of going radio silent for several months are harder to justify and come at a greater opportunity cost. At the same time, the decline in traditional media print and broadcast outlets raises the stakes for a PR strategy overly dependent on a timed splash launch. Utilizing social media for exposure during a firm's early stages can give startups a huge lift, but before abandoning or shortening the stealth mode cycle these firms should understand the risks:

  • Transparency can backfire – Companies and executives have grown comfortable chronicling in great detail the professional and personal developments in their lives. While the pendulum currently swings widely to real-time transparency via online networks, this level of openness can backfire for a startup that doesn't draw a distinction between revealing information that will engage consumers versus information that should remain private.
  • Prepare for success – Some startups use social media as a PR mechanism to lay fertile ground with consumers before a product is fully available. There are dangers not only in hyping ‘vaporware', but also a risk in success. A recent New York Times piece highlighted Fitbit Tracker, a wearable fitness tracking device that generated great buzz for a product prototype, before running into hardware and testing challenges delaying availability.
  • One size doesn't fit all – Using social media as a PR tool during a startup's early stages can be more fruitful for companies targeting consumers than it might for startups targeting enterprise customers, or products with long-lead sales cycles. Startups must match their PR approach to key target markets.

Brian Lustig is founder of Lustig Communications and has executed public relations programs for numerous startups and early stage firms during his career.

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