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.
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?