Startups' 'private' tests still tell competitors everything

This paper models how entrepreneurs test new ideas. It finds that the choice to run a public or private experiment signals information to rivals. This means entrepreneurs design tests not just to learn, but also to manage what competitors infer about their confidence.

Entrepreneurs often think of early product tests as secret learning. But this paper shows even a "private" beta can reveal a founder's confidence or strategy to rivals. This means founders must now consider competitive signaling as much as product learning when designing their tests.