The problem is the response to that is almost always "Oh you mean like ______?". The answer to that is almost certainly no, but you can't really say or explain why unless you reveal too much about your startup at too early a stage. Then people get the impression you are working on some stupid idea that has already been done.

There are a lot of reasons not to reveal what you are working on exactly, but giving the industry isn't necessarily the best thing to do either. A lot of experienced founders will also do this because they don't want wild rumors flying around about what they are building / working on next from a one-liner that they mentioned without wanting or being able to get into the details about it with some stranger.

Agree perhaps, from a psychological standpoint I say stealth all the time because I am plain sick and tired of telling every person whom inevitably asks the question, "so whats your startup working on". I'd rather think of the code I need to write the next day or just talk about macro economy and other things. My life is 24/7 startup already. And may I add: seasoned entrepreneurs don't ask THAT question they either wait for you do talk about it yourself or don't pester you with it because they have all been there too.

I agree with this tactic 100%. It is much more meaningful and honest.