unConference 2015 Session: Startup Transparency
October 23, 2015
Stuart Levinson, Open Company
This a new concept for many CEOs, but more and more startups are opening up and sharing key business information about finance, growth, ownership, risks and more. Instead of controlling the information and giving it out on a "need to know basis" they are sharing it broadly to empower and align all stakeholders.
Questions amongst the group included:
- What kinds of things would you consider being transparent about?
- Salaries: Most said no because they felt it would cause problems among employees wondering why they weren't being paid the same; or felt it might have the effect of driving salaries up overall which is difficult for startups. Buffer is an example of a startup that makes salaries public.
- Equity: So few people understand what equity means, so why put it out there? Because so few people understand it!
- Runway or Cash Left in the business: The group was mixed on whether or not to provide this information to everyone
- Expenses: What about the salesperson that spends $1K on a sales dinner? one person said it would cause grief with developers feeling it was unfair, but another felt it required context. Was it to take out 3 or 30 customers? Was it the top client or just another dinner? Context, and being able to ask questions about it might be important.
- Employee Performance: could this be public?
- If you put key information out there are they reading it? Just because you're transparent doesn't mean everyone knows about it. There's a difference between pushing information to someone and making them seek it. Don't make it difficult to know changes have been made. Bring the new information to them.
- Isn't it a waste of time if development is spending time reading information about sales? If so, why put all this information out there?
- What are the perverse effects of openness, meaning, what are the negative, unintended consequences? The SEC mandated that public companies detail CEO pay because there was such a discrepancy and shareholder complaints; but making it open has had the reverse effect. Public company A points to public company B and C and says, "look at what they're being paid! I deserve at least that and more!" Will the same thing happen if startups make their salaries public?
- What is the motivation to be transparent? It creates accountability when you have to report on your work. One person talked about their AllHands where each department head walked up to report on their progress that week. Doing that in public created pressure and accountability.
- There was a fear of having to do more work. The best systems are those that generate reports or information based on the work you did, not having to do the work and then turn around and report on the work.
- Does transparency create maturity and responsible team members? Or does the visibility create the feeling of responsibility and therefore more mature, trusted team?
- How do people share information today? What tools are they using? Small, early startups are using email. Larger companies are using confluence and custom systems. Everyone was doing some type of AllHands meeting with their teams to deliver information.