Transparency is a funny thing. Depending on what kind of company you’re running, you might not think you have any incentive to let your employees or the general public behind the curtain. If you’re the CEO of a large corporation like, say, Nike or Coca-Cola, then your brand is already so well known that adding another layer of visibility might not be necessary. Your affairs are already public enough.
But what if you’re running a startup?
Today’s culture is crowded and competitive. There are countless new businesses sprouting up every day. The majority of them don’t make it. If you want your new enterprise to grow and be successful, it just might benefit you to share more information with the general public – that includes potential investors, employees, customers, you name it. The more people know, the greater interest they might take in getting involved.
“The more people know, the greater interest they might take in getting involved.”
Numerous business leaders around the world have talked recently about the value of transparency. By and large, the verdict is this: There are many positive effects that can come out of being more transparent, and just about zero negatives. So why not give it a try? This is definitely something to think about more as you go about managing and marketing your business.
Seeing startup transparency in action
Among smaller businesses, there’s definitely more of an effort these days to make information more widely available, especially when it comes to finances. Entrepreneur and consultant Pierre Lechelle recently discussed on his website how Buffer is a great example of this. The startup, which is selling a new social media management tool, uses a website called Baremetrics to publish its revenues each month and let the general public monitor their progress.
“Buffer is a superb example of transparency,” Lechelle explained. “They publicize their financial metrics and transparency is clearly at the center of their values. Transparency helps you to position your brand as a genuine brand and can be a source of great competitive advantage. Transparency is going to become the norm.”
Some companies might believe that this information is best kept confidential. If you’re running a big corporation, you might not want the world to know how many billions you’re earning. But among startups these days, there’s a growing belief that sharing this information can yield benefits in a variety of ways.
Building trust with investors
One key strategy is to use transparency as a way of attracting new investors to support your startup. In today’s competitive startup culture, it’s often difficult to get a running start without help from angel investors or venture capitalists. Attracting these individuals is difficult – but it helps to show them a little glimpse of the progress you’re making.
According to GigaOM, investors often appreciate a culture of transparency. Lewis Cirne, founder and CEO of Francisco-based software company New Relic, told the news source that being too withholding can scare people away from opening their checkbooks.
“If you have a culture of hiding, it is perpetuated in the company and has an impact on the business, and leads to erosion of trust,” Lew said to GigaOM.
People don’t want to sink their money into a new venture unless they’re confident they can get it back. If you can show investors a detailed plan for what amount of revenue you can bring in, how and when, you’ll be more likely to win them over and ensure their continued support.
Establishing core values with employees
Transparency isn’t just about pitching your company to outside investors, though. You also want to effectively share information in-house, with your own people. Think about the value of being more transparent with your own employees.
Rick Perreault, founder of Unbounce, explained to The Next Web that transparency sends a strong message to the workforce, telling them that they’re trusted and valued members of the team, all working toward a common goal.
“When I’m out there being super transparent about financials or KPIs, I believe it sends a message to everyone at Unbounce at I’m proud of what we are doing which gives everyone confidence to keep moving forward,” Perreault said. “I can’t think of many negatives consequences with being transparent but I can’t think of anything good coming out of not being.”
“Whatever matters most to your customers, find a way to emphasize the way your brand delivers it.”
If everyone in the company is kept abreast of their collective progress, they’ll have motivation to keep working hard and pushing the team forward.
Instilling faith among customers
Finally, transparency is also valuable in the way it helps build relationships between a startup and its customers. Again on the subject of Buffer and its new approach to transparency: Joel Gascoigne, the company’s co-founder, told The Next Web that transparency has changed the dynamic with the end users of his product.
“The top benefit we’ve seen is that being transparent has increased the level of trust both between team members and also with our customers,” Gascoigne said. “We have shown we are dependable and will keep customers informed of important issues the moment we know about them.”
As you go about marketing your product to the general public, think about what values you expect your customer to have. Do you want them to care about speed and efficiency? About earning money? About doing good in the world? Whatever matters most to your customers, find a way to emphasize the way your brand delivers it. Then be as transparent as possible about specifically how. You’ll be amazed at the difference that one simple change can make.
How can your business benefit from being more transparent?
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