How to run a transparent startup
Aug 31, 2022
On this page
- Why transparency matters
- How we avoid context overload
- How we share our financial performance
- Stock options
- Financial reports (profit/loss/balance etc)
- How we build product openly
- How we share our strategy
- How we are open around people topics
- Pay structure
- Hiring (and "not-hiring") decisions
- Firing decisions (when for performance reasons)
- Personal readmes
- You don't have to do this all at once
There really hasn't been a single situation where transparency hasn't been to our company's advantage.
Most companies seem to share when necessary but not by default. I hope this post changes that because, as a startup, you've done something wrong if you don't trust your own team - so it should be possible for more people.
It's worth noting that these are my views on how and why more startups should offer greater internal transparency. I've focused on internal transparency because I believe it can be realistically practiced and helps the most people. I've written about startups because that's what I know.
If you want to gain even more of an advantage, I would encourage you to share this stuff externally by default unless there's a good reason not to.
There are probably some startups where this doesn't work – perhaps in design-led companies, where control might be a competitive advantage and is more important than autonomy, or in companies that aren't managed consistently. But the principles still apply, even if the execution might differ.
Why transparency matters
This section is a bit effusive. Skip it if you're not in the mood for that.
I cannot believe that more companies, and especially startups, don't do this stuff. It is in the top five most impactful decisions we've made.
Above all, it enables people to work autonomously. There are two ways to grow a team - autonomy, or control. We chose the former because it's the kind of place we'd want to work, and therefore it makes it a better place to work for our team. That lets us hire and retain stronger people. Talent compounds, y'all.
Transparency works particularly well in an all remote company. Like ours. That's because having this stuff written down and shared makes asynchronous work much easier.
We didn't expect this, but transparency makes hiring great talent much easier. Since we share most of the below publicly, potential hires can trust us much more easily, and it makes us stand apart from the thousands of other startups. Transparency makes the whole company a joint project, between our team and the community around it too.
How we avoid context overload
There will be so much context available, that you need to be more mindful of making it easy to find stuff.
The simplest way to keep things easy to find, is to have fewer places to look.
Broadly for us this means:
- Pull Requests > Issues > Public Slack Channels > Private groups or Slack DMs > Email
We also use a weekly 30-minute all hands (including written notes) to highlight what really matters across all teams.
- Top level news, such as strategy details or changes, new team members, and rectruitment plans
- Revenue updates, because this is an output of all the other teams working well
- OKR updates, so we can share progress for each key result, and any extra context
- Important policy updates, all of which is included in our online company handbook
- Demos of cool things people have built or are working on
How we share our financial performance
We share why we are fundraising, or not, and what our goals are for the business that'll make this easier.
If we are fundraising, we'll provide updates on the process. We'll share what our specific goals are for a term sheet, and how we're doing as we run the process.
Everyone should know the percentage of the company they own, their strike price, the terms of their options, and the impact of fundraising on this stuff.
At some stage, we'll do more here - letting people model what options are worth depending on how the company performs, for example.
Financial reports (profit/loss/balance etc)
This should be copy pasta from your board slides. We share the monthly reports our accountants create with our team.
How we build product openly
We're split into small teams. Each small team runs their own sprints. They share:
- How last sprint went
- What the plan is for the next sprint
- An open calendar invite/Zoom link in case anyone wants to join the sprint call
- Issues in GitHub that explain thinking, include feature requests, or have problems or bugs
We have an executive small team too, which works exactly like all the other small teams. This is probably the most impactful team's work to share with everyone else, yet it's probably the least likely to be shared in most companies.
How we share our strategy
Another really simple thing to share, with really high impact.
- OKRs, including why they were picked
- Board meeting slides
- Board meeting notes (since the meeting's primary purpose is to cover strategic topics, so the outcome matters too)
- Long-term vision
How we are open around people topics
Overall, our pay and communication around it, is designed to make pay "get out of the way".
We have a system for paying everyone here. This means we can justify for every team member exactly why they're paid. We proactively review every team member compared to this every few months and make adjustments if the market or their performance has changed.
We don't share individuals' pay details with each other as it's the only area we don't want employee feedback, and we don't make all changes at the same time. Quite simply, if people influence each others' pay, then it would make the process of giving and receiving direct feedback harder. We don't want people to have to be defensive with each other.
Hiring (and "not-hiring") decisions
This is a new one we're working to introduce.
When a candidate gets to the final stage of our hiring process, we share with the wider company the decision we made.
This let's our team level each other up at decision making, it increases accountability (and, thus, inclusivity).
Firing decisions (when for performance reasons)
If someone leaves for performance reasons, we'll communicate to the rest of the company what went wrong. Sometimes that means running a post-mortem on the hiring process too, which is also shared.
This sounds scary to share, but for the rest of the team, more clarity rather than less, is how you reduce uncertainty. And as a company when we make these decisions, it increases accountability.
These are a fun one - team members write out how they can help others, what their focus is, and quirks of working with them. We borrowed the idea from Sid's at GitLab, but extended it to everyone. We make them optional, but quite a few people do them. Joe's is particularly nicely written.
You don't have to do this all at once
Some of this list may require you to improve your company's general processes and management to even be able to share them properly. That's fine. Ultimately, doing the things here will create deep trust between your team, and it'll make you think through your decisions more carefully. That has to be worth it.