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Ask HN: How transparent should your startup be?

18 points by bike_index ↗ HN
I recently watched a Jason Cohen talk called Naked Business - How Honesty Makes Money[1]. I'm the founder of the Bike Index, and I think we had bought into all the quasi-marketspeak that makes the Bike Index sound like a big company, when being transparent about our size and limitations seems like a better strategy.

I opened a github issue[2] and revised our about page. I asked everyone I could about whether this was a good thing and the general response was yes.

So Hacker News - is this honesty a good thing? Should we be even more transparent, for instance by publicizing our burn rate? If we start to look for investment, is being up-front about being excited to run the Bike Index regardless of whether it makes money a good thing?

[1]: http://vimeo.com/96685927 [2]: https://github.com/bikeindex/bike_index/issues/80

14 comments

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bike_index
Thanks to donw for suggesting the Jason Cohen talk. It's a really good video.
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joshcrowder
Interesting question - I've been thinking along the same lines.

I current share - Wages, Intership programmes, Size (I dont pretend to be larger than we are, we used to but its beneficial not too for us.)

I'm concerned about sharing rev as well, but I have shared it with clients who have asked.... Its odd some clients mainly enterprise will ask whats your yearly rev as if its not a personal question.

I'm leaning towards being more transparent, sharing your burn rate in a particular way is OK. However its about messaging. If you write a blog post advertising the rate and its bad, I'd see that as negative. However if it comes up in conversation (article or RL) then I dont see the issue with sharing.

bike_index
I'm feeling the same way. Had an interesting conversation last night where someone said they would totally give us a bit of money after telling him what we're spending per month and how. I'll think about where and how to talk about it.
jmathai
I'd venture to say it has little to no material impact on how successful your business will be. If you believe in tranparency then you should be transparent.

I wouldn't suggest using transparency as a marketing tool. Most of what I've read seems to have a serious case of survivorship bias (I haven't listened to the Cohen talk).

I'd focus on your business and what's important to you.

mindcrime
We try to be pretty transparent in most things at Fogbeam. We actually consider our small size a selling point, and it dovetails with our strategy vis-a-vis The Discipline of Market Leaders[1], which is to focus on customer intimacy.

When I talk to prospects, I emphasize that, since we're small, we will be very responsive to their needs, and that they get access to the highest levels of the company in a way they never would with, say, IBM or Oracle.

"With us, you'll have the CEO's personal cellphone number, and you can call and wake me up at 2:00am if you need to. I hope you don't need to, but you'll have that option if need be. And you won't get that from Oracle, IBM, Microsoft, etc."

As far as burn rate and financial data... we don't actively disclose that to the world, because there doesn't appear (at first blush) to be an value in it. But we do disclose a lot of stuff (sales leads, prospects, product roadmap details, etc.) to our advisory board members, and a group of 20-30 or so people (investors, potential partners, etc.) who have expressed at least some interest in knowing what we're up to.

[1]: http://www.amazon.com/The-Discipline-Market-Leaders-Customer...

bike_index
Yeah, that's essentially what the Jason Cohen talk is about. Our small size is a virtue, since we care a whole lot.
kevjordan
It depends are your target market. We went with a similar service based approach, but a few potential clients were worried that we may not be around in a few years.
mindcrime
That's true. Hence the old saw about how "you can't be everything to everybody". In our case, the gamble we're making, is that the market of companies who will work with a smaller company and appreciate the extra attention and intimacy, is big enough to support us (at least in the early days).

It may not work out, but I guess only time will tell.

debacle
If you are that interested in honesty, why don't you open up the bike index database for download so that, when you do seek investment, people can fork your product if they desire?
bike_index
User privacy, giving out all of our user's emails for instance would be dishonest since it would completely violate all of our promises to them. And why would us seeking investment lead to someone wanting to fork the Index?
debacle
Because maybe they're not interested in your monetization strategy. It seems disingenuous to pretend to be about honesty and openness when the only value to any investor down the road would be the size and targeted nature of your user database.
bike_index
We aren't "pretending" to care about honesty and openness, we actually do.

Selling users isn't the only way to make money.

chatmasta
Risks of transparency:

- sharing roadmap, gaining support for it, then changing your mind or failing to meet deadlines ("never promise what you can't deliver")

- sharing roadmap, gaining support, then having better-funded/faster-moving competitors steal it

I see a lot of advantages as well, but those are the two biggest risks in my eyes.