By Chase Garbarino
As readers of this blog know, because we have said it time and time again, transparency is one of our key founding values. We try to be as transparent as possible with our team internally, with our customers and users, and the press and general public. We think it is good to keep ourselves honest and frankly, it makes it a bit more interesting to pay attention to us.
This morning, Dan Primack, the Fortune writer who pens the daily newsletter Term Sheet (a must-read if you are in VC/PE), devoted a section to the pro’s and con’s of being transparent as a company with your employees. Dan mostly quoted companies that argued why you should or shouldn’t be transparent. One of our angel investors, Dharmesh Shah, provided some practical advice on why Hubspot tries to be transparent and why it was important early in their company’s existence.
As we talk a lot about transparency, I figured I would contribute my two cents on why internal transparency is incredibly important for startups. It should be no surprise that all startups – from Facebook several years ago to the many startups that fail every day – hit hard times. This is the startup rule where there are no exceptions.
Every. Single. Startup. Hits. Hard. Times. Period.
With this stubborn fact as the starting point for any founding team, it should be a priority to find people who can handle adversity and then prepare people for the inevitable startup adversity waiting down the road. Your startup is only as strong as the team behind it, and when people are prepared, they can handle almost anything. When they are unprepared, surprised, or lied to is when people will back down from adversity and quit.
Transparency with employees should be introduced before they even join a startup in my opinion. I’m a big believer in trying to scare people out of joining startups because so many people like the idea of working at a startup and then when faced with the reality, can’t hack it. By being transparent about how terribly difficult a startup can be, while balancing positive messaging around how big of an opportunity your startup is pursuing, you should be able to scare away those who will crumble in the face of adversity and attract people who want to join your company for the right reasons.