Innovate or Perish: Disrupting Industries from the Shadows

The Unseen Journey of a Stealth Innovator

In the world of startups, innovation is not just a buzzword; it's a survival strategy.

The landscape is littered with the carcasses of businesses that failed to adapt, making "Innovate or Perish" a mantra for entrepreneurs. Yet, amidst the high-profile success stories, there exists a cadre of disruptors who prefer to operate from the shadows. These are the invisible founders, unsung heroes of innovation, whose stories of perseverance, creativity, and strategic ingenuity offer invaluable lessons for aspiring entrepreneurs. This article delves into the essence of disrupting industries quietly and effectively, with real examples that underscore the power of innovation from the shadows.

The Ethos of Stealth Innovation

At the heart of stealth innovation lies a simple truth: not all disruptors seek the spotlight.

Instead, they focus on the core of entrepreneurship—solving problems and filling gaps in the market. This approach requires a blend of resilience, creativity, and a strategic mindset. The invisible founder, embodying these traits, thrives on the challenge of innovating away from the public eye, leveraging the element of surprise to make a significant impact.

Case Studies of Shadow Disruptors

Stripe: Revolutionising Online Payments

Stripe's innovation in the payments industry is a classic example of how a focused approach to solving a specific problem can have wide-ranging impacts. Before Stripe, entrepreneurs faced high barriers to entry in e-commerce due to the complex and fragmented nature of online payments. Stripe's founders, Patrick and John Collison, identified this pain point and set out to simplify the process. They developed an API that allowed businesses of any size to easily integrate payment processing capabilities into their websites and apps. This plug-and-play solution was revolutionary, drastically reducing the technical and bureaucratic hurdles that previously stifled online commerce.

What Set Stripe Apart?

• User-centric design: Stripe's API was designed from the ground up to be developer-friendly, with clear documentation and simple integration processes, contrasting sharply with the cumbersome systems offered by competitors.

• Global scalability: Stripe focused on making cross-border payments as straightforward as domestic ones, catering to the increasingly global nature of e-commerce.

• Transparent pricing: Unlike its competitors, Stripe offered clear, straightforward pricing without hidden fees, making it easier for businesses to manage finances. On the downside however, if you are a businesses that has essentially white labeled Stripe’s payment solution as your own, the clear pricing disappears. There seems to be a massive oversight here for their terminal product where understanding all the fees involved and how best to charge your customers who use your payment solution (built on top of Stripe) for card transactions requires what appears to be a Harvard educated mathematician. It seems as though they have released the first iteration of the terminal solution which allows acceptance of in person card payments, and then … well … forgot about it. Perhaps more innovation to come here however, I would imagine they will develop their own point of sale-ish solution to accept in person card payments which will most likely be based of the tap2pay model.

Evolving Dynamics in the Payments Landscape

As Stripe grows, there are concerns about it adopting strategies reminiscent of PayPal's more contentious practices, such as moving towards a predatory partnership approach. This shift comes at a time when competitors like Shopify are diversifying their payment options, partly due to issues with Stripe such as support challenges, high fees, and payout delays. These dynamics underscore the importance of continuously innovating and adapting in response to both market needs and competitive pressures. Stripe are not cheap and that is not a secret, they know it. However, adding predatory partner practices to the mix doesn’t really end well especially when you have competition and you are eyeing up an IPO…

I am a fan of Stripe, to a degree. I re-engineered the sales process for a software and payments company during a company pivot from subscriptions to payments while embedding Stripe therefore, I have been very close to the workings of Stripeland. This is why I say, to a degree… Will I use Stripe in my own software and payments startup… meh, maybe initially out of ease however, most definitely not long term. They are simply too expensive (even though I have seen their cheaper contracts), predatory in their appeared direction and their support has gotten considerably worse over the last 2 years which is a shame. They payment solution that I am building is built on the premise of provide fair and low rates to customers, exceptional support and no risk to downtime (unless the entire worlds infrastructure collapses).

p.s. I did notice Substack uses Stripe which makes sense but ouch are the fees high (compared to what they could be)! Maybe I should chat with Substack on how to reduce these fees and increase revenue…

Canva: Democratising Design

Canva's journey from a stealth startup to a design powerhouse showcases the transformative power of making complex capabilities accessible to all. Co-founders Melanie Perkins, Cliff Obrecht, and Cameron Adams saw the gap between professional graphic design tools, which were often complex and expensive, and the growing need for everyday users to create high-quality visual content. Canva's platform bridged this gap by offering an intuitive, drag-and-drop interface that democratised design.

Innovative Aspects of Canva

• Accessibility: Canva made design accessible not only by simplifying the user interface but also by providing thousands of templates and design elements that users could easily customise.

• Community and collaboration: By fostering a community of users and enabling easy sharing and collaboration, Canva tapped into the network effect (more on this later), amplifying its growth.

• Freemium model: Canva's freemium business model ensured that the basic service was free for everyone, with advanced features available for a subscription fee, making it attractive for both casual and professional users.

Overall, I love Canva to be honest. I use it every day for my other businesses. I currently run a marketing agency which definitely requires Canva, I am the founder of an early stage software and payments company which Canva is definitely helping regarding the marketing information and pitch deck, and I run a sales consultancy business which again, Canva helps with as well. Basically, I am at the stage where Canva could raise their prices and I would still pay it as the pain of leaving them would be far too great! Even though they had a massive data breach in the past. I won’t go into data privacy and security yet… that is a massive can of worms.

Palantir: Redefining Data Analysis

Palantir Technologies, through its early stealth mode development, focused on creating sophisticated data analysis software initially aimed at the intelligence and defence sectors. This focus allowed Palantir to develop deep expertise in handling complex, sensitive data sets, leading to a robust platform capable of serving government and large corporate clients with unparalleled data integration and analytical capabilities.

Key Innovations by Palantir

• Data fusion: Palantir's platforms can integrate disparate data sources into a single coherent framework, making it possible to uncover insights that were previously inaccessible.

• Privacy and security: From the beginning, Palantir built robust privacy and security features into its products, recognising the sensitive nature of the data it handles.

Influence of "Zero to One" Peter Thiel, a co-founder of Palantir, further cemented his status as a thought leader in the tech and venture capital world with his book "Zero to One," where he discusses the importance of building new and unique businesses rather than iterating on existing ideas. Palantir is often cited as an example of this philosophy, focusing on creating novel solutions in data analysis that set new standards for what technology can achieve in intelligence and business analytics.

While I can’t argue with Peter Thiel in his philosophy of building new and unique businesses after all, he is far more experienced and successful than I am. I do believe there is room for innovators and disruptors in existing industries hence Stripe and Canva.

Case Study Final Thoughts

Stripe, Canva, and Palantir exemplify the power of focused innovation to transform industries. Each company, in its way, identified a specific need and addressed it through a combination of user-friendly design, strategic business models, and cutting-edge technology. As they evolve, these companies face new challenges and criticisms, reminding us that innovation is not a one-time achievement but a continuous process of adaptation and growth. The lessons from their journeys are invaluable for any entrepreneur looking to make a lasting impact in today's dynamic marketplace.

Strategies for Successful Stealth Innovation