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Transparency in Startups

In startups, employees expect a level of transparency that doesn’t exist at large companies. At Apple, only the people who need to know are in the know about new products and sensitive internal company information. Contrasting this with a startup, team members are taking both a financial and career risk in joining and transparency makes employees feel secure in their risky decision. This starts with employees knowing where the company stands and it ends with knowing where the company is going.

Paul Graham says:

When we haven’t heard from, or about, a startup for a couple months, that’s a bad sign. If we send them an email asking what’s up, and they don’t reply, that’s a really bad sign. So far that is a 100% accurate predictor of death.

This applies to more than just popping up in the press every so often. If your employees and investors don’t know how things are going, it’s easy to lose that trust. Here are a few examples of company leaders investing in transparency: 

- Jonah Peretti, founder of Buzzfeed, emailed all company employees and investors summarizing the company’s strategy and progress. Chris Dixon posted the letter with Jonah’s permission here. Jonah shows employees the “why” behind the viral cat memes and how that factors in to Buzzfeed’s evolution. 

- Bart and Andrew, the founders at Tapulous, reported exactly where the company needed to go to hit its revenue targets at its monthly all-hands meetings. Engineers, interns and designers were all focused on revenue growth. 

Pulse has a form in which any team member can ask anonymous questions and one of the founders will post a public response for the rest of the company to see.

Keen.io made its salary and equity compensation completely transparent by having one of its early employees write about her negotiation experience on the company blog.

- Emails at Stripe are copied to lists that go to either the entire company or to a particular team for the sake of transparency.

Transparency should exist to protect from fear, unite everyone toward a common goal and keep each piece of the puzzle operating efficiently together. 

If your team members find out about a new product the day it’s released, they might as well be at Apple. If your engineers have to wait for a yearly review period to give feedback to their managers, they might as well be at Google. Transparency is one security blanket that startups have to give and big companies tend to lose. 

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