The Stealth Mode Startup: What We Learned, What We’d Change and Why We Succeeded, Part 2

At Lumos, we raised $30 million in funding in 18 months. No one knew until they knew–and they all found out on launch day. The best part? Our launch was successful.

In Part 1, we talked about why we stayed in stealth mode and how we launched an under-the-radar startup. In Part 2, we’ll dig into what we learned, what we would do differently, and our best bits of advice for other founders.

What we learned

Advice is just that–you don’t have to take it.

We were told several times to go out of stealth mode. We didn’t listen. We are a story-led company. Staying in stealth mode allowed us to tell the right story–and that took time. Think about the best stories you’ve read. They take you on a journey. They captivate you. They build a narrative that has the potential to drive change. At Lumos, we aren’t selling a product or a feature. We are offering something completely new. Our story needed to reflect that.

Let’s start by saying companies should usually go out of stealth mode when they can’t recruit anymore, sell as quickly or find partners as easily. We weren’t in that position, so we kept quiet. By staying in stealth mode, we had the freedom to change our story at any time. We could scrap our narrative, start over and adjust–and we didn’t have to go back and change anyone’s mind. Ultimately, we arrived at this: We are creating the AppStore for companies and giving employees self-service access. We are empowering employees to find the apps that they need to do their jobs and unlock their superpowers. And we’re doing it in a way that puts less administrative burden on the IT team. And in doing so, we’re helping IT teams manage cost, compliance, security, and productivity.

By September 2021, we believed we had nailed our positioning. Our messages were clear and resonating. We felt like we were ready to launch. But we still had a ways to go. We still needed the right storytellers in place.

That brings us to culture.

5 Ways to Revamp Your Company’s Culture

Don’t hire someone good at everything; hire someone exceptional at one thing.

How did this define the way we hire? First, we defined our culture. No matter what, you should always hire people who add to and align with the culture you want. At Lumos, we prioritize clarity, “Lumos originals” and having fun. We use short, succinct sentences. We use a lot of analogies. So we want people who speak our language and communicate well.

We also want people who think differently. “Lumos originals” is about doing something different, not better. So we looked for people who were exceptional at one thing–even if they weren’t amazing in other areas. We found the best ideas come from people who are especially talented in one area versus mediocre in many ways. This method helped us create distinct competencies based on our culture so we could make the right hiring decisions.

Lastly, have fun. Hire people who don’t take themselves so seriously but still have a drive for improvement.

We found the best ideas come from people who are especially talented in one area versus mediocre in many ways.

You don’t have to start with a freemium model.

We abandoned the idea because it doesn’t work for our buyer. If you’re considering the freemium model, I encourage you to think about two things: the buying behavior of your target customer and your cash flow.

In our case, we sell to heads of security and IT. They are managing 300 other apps. They don’t have time to try something they aren’t prepared to adopt. We wanted quality buyers so we prioritized that over scaling quickly using the freemium carrot.

As for cash flow, we looked at the impact of splitting developer resources between supporting nonpaying customers and application development. Typically nonpaying users require ample support and can have a company burning through cash faster than anticipated … and at the expense of the quality of the product.

For us, it was pretty clear from the start that our audience was averse to lightweight freemium solutions that would handle high-risk functions like security and application access.

What we wish we knew when we started–and what we’d change

It’s OK to let other people tell your story.

There are a lot of things we’d change. But a big one is doubling down sooner on referral-based selling. Being a story-led company isn’t about telling a grand story; it’s about enabling someone to tell a grand story about you. It’s far more powerful when other people talk about you than when you talk about yourself. We’ve done this–but we should have done it more quickly.

Don’t make everything about you.

Recently we created an IT leadership forum. It’s a separate community from Lumos. The forum is the campfire leaders can gather around to share amazing stories. These stories aren’t about us convincing them to like us. They can tell their stories and capture their emotions. It’s powerful and has offered insight that we wish we’d had earlier.

Reframe your thinking sooner.

It’s easier to build a better mousetrap than define a completely new process. Here’s a great example: For years, people listened to CDs on portable disc players. They carried around a cumbersome book of CDs so they could switch up their music selection. Then Sony decided to make it more convenient to carry your music by making everything smaller. And the minidisc player was born. Haven’t heard of the minidisc? You aren’t the only one. Shortly after the minidisc player came to market, Apple blew everything up with its first-generation iPod. Sony built a better mousetrap. Apple built something entirely new.

When we first started Lumos, we had the build-a-better-mousetrap mentality. If we could go back, we would have asked the question earlier: What can we build differently, not better? That question led us to our value proposition. For us, it’s self-service and enabling employees to help themselves while our industry is focused on automating. Our approach is different because we changed our entire thought process.

Getting a startup off the ground takes a great idea and a lot of hard work. For us, that meant staying in stealth mode longer than most companies. It gave us the freedom and flexibility to tell our story the way we wanted. We defined our culture. We hired the right people. And we learned a ton along the way. All of our efforts and decisions culminated in a successful launch. We hope that success inspires other startups to do the same.

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