David Cummings on Startups

Transparency in a Startup

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David Cummings

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One of the items entrepreneurs frequently debate is the level of transparency to provide within their startup. How much information does a team member need to know? When does not enough information cause problems? While there’s no perfect answer, I’ve found that it’s better to err on the side of providing more information than expected.

Here are a few areas worth considering as part of the transparency question in a startup:

  • How much cash is in the bank?
  • What’s the monthly burn rate?
  • What are the key metrics for the business and where do things stand?
  • What are the key metrics for each department and where do things stand?
  • What goals need to be hit to raise the next round of financing (if applicable)?
  • What are the top three challenges in the business (some issues, like those that are personnel related, can’t be discussed company-wide)?
  • What’s on the Simplified One Page Strategic Plan?

Transparency in a startup varies wildly but more entrepreneurs are providing greater levels of transparency and getting greater levels of buy-in as well.

What else? What are some other transparency questions to consider?

 

Comments

2 responses to “Transparency in a Startup”

  1. Dave Williams Avatar
    Dave Williams

    Transparency is great when first getting started and when things are going well but when things get tough, lost revenue, tight cash, rounds of lay offs, issues in the business, transparency becomes tougher and tougher as you want people to know why is going on but you also don’t want to kill morale or for confidential data to leak such as acquisition talks, etc. The level of transparency should vary by employee level, shareholder status and position in the company – accountant, HR, account management, tech, etc.

    Reply
  2. Anthony Stepanek Avatar
    Anthony Stepanek

    The level of transparency may also depend on the marketing methods used by the entrepreneur. For example. Somebody that focus a lot on lunch meetings spend more to talk to one person then a blogger spends talking to hundreds or thousands. Which is more powerful? Depends on how you perform… Just something to consider. “Variables!” They are crazy sometimes. Keep up the good work!

    Reply

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