In general, it doesn’t matter whether you’re open to the public or not.
What matters much more is that you’re open with your own employees.
The “open startup” idea always seemed superficial to me, founders seeking external validation.
Over the long-term, what really matters is keeping your people (employees) happy, and one very easy way to do that is to show that you appreciate and respect them by sharing your company’s key metrics with them.
Not every month will be great, but that’s ok. If you’re running your business responsibly, you’ll be able to say “we didn’t have a great month, but we have 5 years of runway”.
If you hide metrics because your business is unsustainable, then yea, don’t show your metrics to anyone… and if you work for a private tech company with very guarded metrics, it’s safe to assume they are not doing well financially.
Probably the opposing vew to this is that if you keep your employees happy first, then they will be happy and keep your customers happy. If you have unhappy employees, they might not give a shit about customers and piss the customers off.
We've all been to those places where the employees don't give a fuck about customers, and basically tell you with their body language and tone of voice to fuck off.
Yep. Employees and customers. Neglect any of them bad things happen.
Depending on your business you may have stable customers who just keep going. You can’t neglect these forever, but compared to employees it may be of lesser priority short-term.
If you neglect employees on the other hand, even short-term, bad things will happen short-term or long term. Employees remember when they were neglected and loyalties are hard to build.
Right. And the the my job/work/boss sucks trope is so relatable because?
There are many reasons people stay in a particular job, good and bad, but those same reasons allow for a lot of "employees neglect".
You have to neglect a lot of employees to an extreme level, for a long time, for it to actually make a significant difference.
Mostly, you'll loose a few staff, who'll be replaced by new, keen, eager to please/succeed staff who's enthusiasm effectively mitigates poor management, and who's "tolerance for sh.tty management" counters have been reset to 0.
It's better to say nothing than it is to mislead or say something wrong, but best of all would be if they had been honest. I don't think that sounds like a disagreement.
> The “open startup” idea always seemed superficial to me, founders seeking external validation.
Similarly to me is the "democratizing X" startup. Those were never not about the same thing as every other startup: VC money and getting a return. But it was trendy to was "we're democratizing <thing>".
For me democratizing can mean "We have done something hard and we are going to share the benefits of it for minimal gain". The business is not lucrative for others to copy because margins are low.
OpenAI is a capped profit company. https://openai.com/blog/openai-lp/. If they become as big as everyone today thinks they will become, they can be democratizing AI.
Also note that, lot of progress in AI has happened because big companies are willing to share their research publicly, which helps them in attracting talent.
The hard thing about Indie businesses is proving product-market fit. Rest of what they do can easily be copied even if they don't share info. Not sharing revenue numbers will just help them with others not going for similar ideas.
But sharing info leads to social media following, which is key to marketing for many of these companies.
Few phrases are as popular and as cringey as "democratizing X". Is it going to have voting? Political power? How did we get to the point that we use democratizing as a way to say popularizing.
And Robinhood still keeps saying this as a tagline!
I don't really agree or maybe I have misunderstood the author's thesis here. Is he saying it's harder to grow a business by building in the open nowadays because so many people have already done it, so now consumers are weary of it? Or is he upset that many of these companies that were once open have stopped being open once they found success?
Just because many established companies have stopped doing it, doesn't mean it's the end of some kind of golden age. The reason these companies built in the open is in the first place is for selfish reasons - free promotion for their business while they ship. Once they have figured out the business, why should they keep putting in the extra work to tell others about it?
This Damon Chen guy seems like a nice guy but like an independent journalist or something. He seems like he could be a great evangelist.
He started some websites, wrote about Open Startups, and in this article he mentions he had his own 'revenue bar' on Twitter which went from $0 to $1 but he took it down because the age of Open Startups is over.
I look at all this and wonder where the actual dudes going to work at jobs are (no disrespect to those Open Startups who have made bank).
I am an entrepreneur so here is what the job looks like to me. I get up every day and I grind. Mostly that means working on new deals. I close as many of those as I can. When I have time I will call someone on my product team and ask them to walk me through what we're working on delivering next. I have a lot of feedback on that stuff because I come from a product background, but if I indulge that too much, I won't spend enough time on sales.
Sometimes I will look at what the couple of Ops contractors I have on payroll are doing (accounting HR etc.), and spot check their work for issues.
I don't know how any entrepreneur has the time to be off working on "movements." Some of the businesses in his post have higher ARR than me so maybe there's something for me to learn here. But in my reality being an entrepreneur basically means you're closing sales, making deals to increase your distribution, and trying to keep your product or service on track. I just don't get it. Maybe I'm getting old.
Entrepreneur is a very broad term. A power lifter may wonder why the boxer is doing footwork drills when he just needs to lift heavy weights until he realizes they’re both athletes but in different events.
It’s silly to label “open startups” as a movement when it’s more a technique which may or may not be useful to you.
By being open ,people can follow your story, which can translate to marketing/sales/feedback.
There’s also an aspect of idea exchange and psychological motivation by being part of an entrepreneurial community.
I think it’s silly to consider it a movement rather than a tactic. Whether it’s applicable depends a lot on whether it will help you reach potential customers. If you’re trying to sell fintech to big banks, probably not, if you’re selling no-code landing page builders, it probably will.
It’s also a bit of a pendulum where the business default is secrecy, new school thought says build in public, now people are realizing it’s just trade offs .
This has been a key part of many successful products such as Stack Overflow (Jeff Atwood’s blog), Basecamp (Signal V Noise blog). Convertkit is another one and has a really good interview on Indie Hackers about it.
Totally agree, it is odd that the author of the article labeled "open startups" as a movement. I can see why they did so, labeling it as a movement improves the story, makes you a "thought leader", etc, which all leads to better marketing / sales.
Reading between the lines I think you are an entrepreneur, rather than a startup founder? The key difference I imagine is you need to be a business at all times and so focus on operations, and a startup doesn't have to be a business yet, but does have to focus on self-image and projecting that image to investors to keep the gravy train flowing in.
My key takeaway from startups vs entrepreneurship is they are very different games, and I wouldn't want to conflate the two even in this discussion about transparency. Many businesses stand to gain nothing, and lose a lot, by exposing their business particulars. Startups on the otherhand can gain a lot from the self-promotion.
I’m very familiar with this space/movement. Most of these “open startups” are solo bootstrappers who use this audience building often as their main marketing channel
It only works well if you’re selling something useful to the bootstrapper crowd: bootstrapping courses, Twitter tools etc
I think you've hit on some of the issues. One of the challenges is that it is hard to know what the company was getting out of being open.
That is hard because there is what folks say, and there is what they really think, and in the startup business the gap between those two realities can be really big. Also, the most successful startup CEOs seem to be really good at crafting a narrative out of very cherry picked "facts" in order to achieve their objectives (funding, growth, recruitment, whatever). As a result the "information space" around startups is usually way more complex than it appears on the surface.
That won't stop people from looking at that information space and drawing conclusions of course, people do that naturally. I agree with the above comment that the author is not (at least in the article) asking themselves if their belief of the motivations for being open are well supported by all the facts or not. Doesn't mean the author is wrong of course, things can be just as they seem, it just seems like some additional care should be taken prior to acting on a belief in why they are doing what they are doing.
Of course a certain level of disclosure is required by the SEC if you want to be traded publicly, and practicing those disclosures prior to an IPO can help set IPO expectations more accurately. And for that reason, understanding GAAP and what disclosures are required are good things for the startup leadership.
> Of course a certain level of disclosure is required by the SEC if you want to be traded publicly…
This is what I find confusing, there isn’t some magic switch that gets pulled when you are required to disclose financials which protects you from the downsides to being open.
If your product can be trivially copied, like an AI email writer, I’m going to guess the problem wasn’t how open you were during the development process. Everyone has come out with their own “Do X with AI” at this point with zero hope to monetize beyond charging for compute time as the market is fully saturated.
Exactly. Competition is a fact of business, and while the example in the article was pretty egregious (launch tweet was identical down to the placement of emojis), it's going to be hard to succeed if you can't take those lemons and turn them into product differentiation lemonade.
Peldi (Balsamiq) did this well, but in reality it was all pretend. He pretended like had this massive groundswell of people who loved his app but it was an incredibly well-executed PR campaign and he deserves mad props for it. He didn't make it clear at the time, but eventually it came out. Of course, people did love his app but he engineered that incredibly well.
So if being open makes sense for PR, do it, but learn from people who have done it successfully.
No, I was just obsessed with how he did it, so I swallowed every piece of info I could've until it was clear. It was manufactured, which is the best approach.
I agree with you and likewise am somewhat confused. My initial read suggests that author bemoans that he needs to scale down how open ( here meaning transparent ) he gets to be. I think it is just a realization that business is cut-throat and information is, indeed, power. Being open can put you at a disadvantage in such an environment.
I certainly don't think it was some sort of golden age. Best I can say about it is that it had benefits.
> Is he saying it's harder to grow a business by building in the open nowadays because so many people have already done it, so now consumers are weary of it?
From the blog post:
> Why are some of the main evangelists and pioneers of this trend leaving now?
> Because bad examples and negative stories are now becoming so common, everyone thinks twice before disclosing things openly.
> From envy and toxic feelings dividing teams and friends to businesses copying other businesses completely, the scene is getting spotted by more and more cases.
...
> Unfortunately, the build-in-public culture couldn’t stand things like competition and bad business practices.
I am also a bit confused by some of what the author has said here. On the one hand he talks about not disclosing things because others are ripping off designs, etc, but in other places he's referring to things like employee salaries and run-rates, etc.
Maybe I'm dumb and not connecting the dots, but why would sharing things like your costs allow others to steal your business? I genuinely don't understand this, so I think I'm misreading the article.
> From envy and toxic feelings dividing teams and friends to businesses copying other businesses completely, the scene is getting spotted by more and more cases.
The first part of this reads like the traditional reason that "don't talk about your salary with other employees" was a commonly accepted thing. Is the author (/community at large) deciding that going the other direction is a bad idea?
Maybe someone can TL;DR in a better way to save my Friday fried brain?
This actually leaves me more confused; it seemed like building in public was the problem because it left potential for copying, sharing metrics doesn't seem like it would run a risk? That's the part of this movement in the other direction that doesn't make sense to me.
Hi Reid, G here, CMO at testimonial.to. In one sentence, Damon just no longer believes in sharing every core metric but still plans to build in public. It's been a core part of what he does and something I know he likes to do instead of building everything behind curtains with no feedback loop.
Feedback loops should be coming from customers, not outsiders. That would be noise, IMO.
And if that one core sentence is what he believes, I think the whole post could have been more clear and concise instead of making a grand claim that is based on his anecdotal experience.
It’s not being an Open Startup that kills your chances. If you have an insurrmountable business advantage (it’s who you know, not what you know) and you keep the how-to details of your solution hidden behind a generic description where the solution is really hard to pull off well, being open only helps you. Firstly, by using idiots who would steal your idea to create buzz in the market for you as they pitch their silly me-too, and secondly by inspiring confidence and showing lack of insecurity, with clarity and transparency. I mean you can’t rely on NDAs anyway. Why act in fear unless what you’re doing is just run of the mill and you have no particular advantage.
I also argue that there is no net advantage to Apple's secrecy. If they had openly talked about the M1 (Apple Silicon) when they were working on it they would have just had more mindshare and the whole Apple ecosystem could have been preparing for it. By staying silent until they released it, it bought them nothing other than the element of surprise, which is like when little children don't want you to see what they're working on, in case you would take over their creative process, and instead want to surprise you with their brilliance.
I very much doubt that secrecy in the absence of insecurity has any value.
I personally find the lack of vaporware from Apple refreshing. With Apple, when you hear about the thing you can go out and buy the thing. From too many companies you hear about cool tech, only to find it disappointing or hobbled a year later when they actually get to release.
There is a difference between promising and not delivering, and firing employees for leaking a photo of an upcoming product. I think Apple is on the narcissistic spectrum of wanting to induldge in the moment and show off their brilliance. It's good to have a policy of not promising specific products or features if they're not sure. But their secrecy policy goes far beyond that, and includes silencing employees for workplace abuses. Apple is not a good company in the moral sense. They are good at building stuff. That's all the credit they deserve.
>I personally find the lack of vaporware from Apple refreshing.
They recently nixed their AR products that had been hinted at for forever, and the 'Apple Car' was 'right around the corner' sitting as a boogey-man juxtaposed to Tesla's efforts for years before being cancelled.
They're more reliable than most groups, but post-Jobs Apple loves to mention fantasy stuff that consumers will never see, it's part of their hype cycle.
Yeah, fully agreed. I think it helps that Apple fairly recently reinforced their belief in that approach with their AirPower charger fiasco[0] as well. Everyone was excited for it, and then it got quietly canceled, with people still bringing it up occasionally. Announcing ahead of time ended up blowing up in their face, lesson learned.
I can’t cite examples, but in my long experience, ever since the Osborne computer was released, it was understood that if you talked about a future product, people would simply stop buying the current product because they were waiting for the replacement.
> The main reason behind my decision is that I used to share the revenue to track my solo journey. Now with someone else on my team, it’s no longer my personal milestone anymore. I somehow have to be responsible for the whole team.
Interesting how when revenue was likely equating to profit, they are open to sharing. When they have to pay someone else to help out, they want it to be a secret. I don't think the motivating factor here is very complex at all.
Hey, G here, CMO at testimonial.to. There's still plenty of profits left each month, that's not the reason! In one sentence, he just no longer believes in sharing every core metrics but still plans to build in public.
How is it not? It's literally the definition of open, the opposite of closed, so "open until they decide to close" is perfectly valid. We are not dealing with libre or free software here, let each run their company how they want cmom.
Thank you for writing this and sharing this, I was oblivious to all the startups that were doing this and there were quite a lot going by this article.
I think it is unfortunate that companies are deciding not to be open anymore. In a perfect world, do we want organisations to be open? It would mean investment would be easier and less risky, due to transparency.
In the interests of transparency and openness, I share all my ideas and startup ideas in the open with the hope that someone can extend the idea and society can benefit from the ideas. I am up to 700+ computer ideas and 25 startup ideas links on my profile. Society progresses one idea at a time. Somebody invented calculus with an idea.
If openness isn't safe, then we should normalise openness becoming safe and reject actions against open actors or anything that causes openness to not be safe. Reject behaviour that means openness is not safe. For a better world.
I make apps for the App Store, and instead of a startup founder I feel more like an Apple employee, with Apple commanding me around with what I should and cannot do.
Yeah, being just ramen-profitable isn't everything. I'm past that stage though, but in retrospect would have made an order of magnitude more money by being a regular employee in IT compared to trying to make a fortune in the App Store. I hope to reach a break-even point sometime in my lifetime, but I'm not entirely optimistic about it.
We are just about starting out with my company and I've literally just made our live analytics public at https://analytics.moonka.space - it's literally everything we see.
We are using Plausible.io (kudos to them!), a privacy-first analytics platform that provides just enough data without abusing our users' data. This way, we don't even have to show a cookie notice.
I'm planning to open up our financial details as well as soon as we have enough transactions so that our clients can't be identified based on our data.
It looks great, congrats on shipping this! The issue you might face in the long term is the 'sources' section or 'top pages'. It makes it too easy for someone to replicate your strategy, but you're still early! Wishing you all the best :)
A startup I knew had someone take professional-looking pictures of new employees, and add them to the Who Works Here page, with a nice blurb. After years of employees being poached by Big Tech the Who Works Here page is gone. To me this is also part of the loss of innocence.
The startup I worked for got rid of its Who Works Here page seemingly arbitrarily (at least not for any reason related to poaching), and replaced it with a page focused on executives. Probably not that arbitrary looking back.
They were proud to keep the banner photo of the whole team for years, though, even after more than 50% of the people in said banner photo were gone.
I suspect recruiters used LinkedIn to initiate the conversations. Keep in mind it takes two to tango. The employees opted to talk to the recruiters, go through interviews, and change jobs. The absence/presence of a "Who Works Here" page doesn't change the fact that recruiters will contact employees, and employees may change jobs.
Other posts have touched on this: when times are good and you're not in a competitive environment, this sort of nonessential fluff accumulates because there is no countervailing force. I'm sure everyone can think of non-value-add activities that companies get caught up in because they have too much time on their hands. This is just one of them. Now we're reverting to the mean
The world is a competitive place and we are seeing some folks lose their innocence.
If what you are doing is a real business, then given the choice to protect your business or aspiring to be "open" (but with no benefit, just risk") - you focus on the business.
It's really no different than releasing too much of your secret sauce as open source - can only hurt you and is a sign you aren't that mature about what running a business through various problems is like.
I wouldn't say there was no real benefit and only risk to being an "open startup". Sharing what you're doing and how it works is a marketing strategy, pure and simple. Up until recently, it was a low effort, high reward marketing channel to sell to other founders. Now with ruthless competition and the ease of cloning a service, it is becoming low value and even risky.
"open" triggers people to think the other way, but it's actually the same as what we know really well, it's a popular strategy among scammers. 'Look at my expensive sport car' this is a success, thus, building pseudo trust.
Low-effort, maybe. But it was always high risk, and the reward was unclear except for a few players who did it successfully ("successfully"...it's not like any of these startups became titans) and marketed it well. Probably the marketing was the secret there, not the "open startup" part.
In the startup world, a lot of trendy ideas get repeated with little/no thought put into their actual risks and benefits for a particular situation. Remember when everyone was certain that feeding their team lunch in the office was the secret to winning? Today the hype is that you don't even want to have an office.
People like to say something that's more harsh or cruel or greedy - almost any negative human trait - is more 'real', a sort of reactionary assertion, which assumes liberalism (used broadly) as 'unreal', fantastical, a silly dream. People like to say that about 'realist' international relations, but the truth is that countries that do good attract more allies and friends.
But the truth is that people balance interests all the time, including businesses. Every decision balances many interests, some involving profit, some involving doing good. That is just as real, just as common a trait in humans.
And I think the connection to "liberalism" is a good point.
The difference is "doing something virtuous rather than maximizing revenue" vs "doing things that will clearly make your business/country unsustainable"
Appreciate the upthread perspectives from you both.
One thought that came to mind is that these are, in some sense, concentric frameworks that rely on each other: a society’s values, a political economy’s priorities and affordances, and how business is conducted.
Gut level, I feel that the social and political pieces circumscribe how business can viably be run. So, I can see a (perhaps very presently-rooted) perspective that we should strive to uphold and/or fight for certain goals and outcomes on the higher levels, but that pragmatically running a business within the existing (functioning, even if dysfunctional) framework may not allow the same opportunities as trying to evolve the sociopolitical.
Going further out on a limb, the higher levels evolve more slowly — often intergenerationally - and that makes it hard to see (or remember) which rules interact with which kinds of trade-offs.
I honestly had no idea what an open startup was. Spent the last 10 years working at startups and had to look that one up. For others wondering, it appears to be companies that publish their internal metrics for all to see.
Running a business openly seems to me to be what people do when they are Amazon sellers and discover a brand-new, lucrative niche before Amazon (or dozens of Chinese sellers) steal it and start selling it for themselves. Running a startup publicly, in my opinion, essentially validates ideas for others to do better, with more resources, with a competitive edge, or whatever.
This was demonstrated lately using the AI Stable Diffusion Portraits. A thousand rivals arose right away after the original author stated their money was derived from doing nothing more than setting up a website connected to steady dissemination on the backend. It increases competition even if none of those rivals are inherently superior.
I think the path in technology for open technology-based startups no longer looks like it used to for a lot of reasons - financial, maturity of online users, and more. We have really crossed a point where building a startup from scratch - without a strategic VC, ability to share customers with an established player in the market or ability to build on top of another company's technology/platform - is just not possible. The fabled guys in a garage inventing the next thing is gone.
Transparency is a tricky thing. Much information came from tribal knowledge. As rules have changed for private companies in the US, we saw some of the information being provided "as open" became the norm or required so there is less of a need to share it and there is not that "goodwill" factor. Most of what was being shared was available to some extent if you knew/know where to look.
The trend outlined in the article is that startups tend to ditch openness once they mature. I think the explanation is pretty simple - it's no longer a marketing advantage to do so. If your'e selling to a startup audience then being open gets you eyeballs early on in your career. Once you start moving into more mature markets, this becomes less interesting to those audiences so why do it? It's hard enough to be open within a company, I can't imagine the operational overhead to do this externally.
A reason to keep doing it is to maintain the value of openness within the internal culture through praxis. If it was only being done for marketing purposes, then it wasn't ever a value, but a strategy.
You maintain the value of openness within internal culture by being open with internal employees. Making the information public is a bonus for the public.
"We share openly in the family, but keep everything in the family" is a recipe for disaster, whether it be in a household or office. It's incongruent and breaks equanimity. It pedestals the employees over others.
Values are marketable. Culture exists and values are a defining aspect of it. Now, if people are masking and performing the cultural values instead of authentically embodying, then there's a separation between stated values and operational values
Thoughts and ideas stand on their own merit, and are worth sharing or criticizing regardless of who produced them. You shouldn't need to know the background of the author to agree or disagree with them, just as credentials aren't required from you to participate in this forum.
Of course it matters when you attempt to use your own social backing to boost someone else. That you're a commenter who has been around since 2018 who is also an "an ambitious full-stack software engineer, with a deep passion for design, user interface and front-end engineering"[1] is definitely a point in your favor, though. What made you personally feel so strongly about the original author? Your reasoning is more likely to help convince others especially if you have sources you can point to.
[1] I'm hoping he'll notice but for everyone else, I pulled this quote from the About page on the website linked from his profile.
FTFY
What if general demise of startups (due to funding drought, covid, market saturation, bad timing aka world wasn’t ready for our idea, or leave your favorite excuse in comments) also impacted open startups? And what if they weren’t successful because open but because market was easier?
What matters much more is that you’re open with your own employees.
The “open startup” idea always seemed superficial to me, founders seeking external validation.
Over the long-term, what really matters is keeping your people (employees) happy, and one very easy way to do that is to show that you appreciate and respect them by sharing your company’s key metrics with them.
Not every month will be great, but that’s ok. If you’re running your business responsibly, you’ll be able to say “we didn’t have a great month, but we have 5 years of runway”.
If you hide metrics because your business is unsustainable, then yea, don’t show your metrics to anyone… and if you work for a private tech company with very guarded metrics, it’s safe to assume they are not doing well financially.