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I'm very interested in the transparency side of things, because that structure seems very risky and possibly instable. If you can chain good news after good new

I'm very interested in the transparency side of things, because that structure seems very risky and possibly instable. If you can chain good news after good news then it's surely nice. But if your newly highered senior marketing strategist just moved from half the planet to your company to then be brought into the fold to find out that the company only has about 3 months of runway left but "we're very close to signing..." then that could have very demotivating effects, like whole groups of people leaving. Maybe it's a German thing, but in my experience the very second one doubts if their company CAN not keep the promises that were made financially, the allegiance to that company drops like a rock. So having that kind of information floating around people that most likely don't have the experience to judge it fairly would most likely do more harm then merit. Maybe there is a way to explain bad news without risking to kill the mood and allegiance, i just haven't seen it yet. The other thing is the one bad apple that abuses the transparency before being found out. How does the recruiting and onboarding process deal with that?

swombat 10y ago
I haven't been in that situation in terms of being in a high-burn rate, VC-funded startup, but I think the transparency can work if it is consistent. Of course, if our company tells us nothing about its finances and then suddenly the news leaks that there is only 3 months of runway left, then we'll be likely to want to leave. Not only can the company not keep its financial promises, it can't even give us ample notice about it! On the other hand, if we are aware of our company's financial situation from day one, then approaching the end of the runway is much more gradual rather than sudden, and also this news comes as part of a whole pattern of honesty and openness by the company. Within this context, I see it is entirely plausible that the openness builds loyalty. Sure, some people will say "I can't afford the risk of being unemployed for even a week right now, so I'm going to have to get my ducks in a row to be able to find another job promptly, and I may have to leave before the next round", but they will tell the company that (so it can plan around those departures) and they will try to arrange things not to screw over the company. And what's the alternative? Lie to those people who are working hard for you, and risk them screwing up their life if you don't manage to close the next round? What kind of broken human does that to their colleagues as a matter of conscious, systematic decision?
- taheca 10y ago
  @swombat FTW. you are absolutely right. I think that is how they would handle things at Buffer, Automatic, or Toptal.
- Roritharr 10y ago
  Thats the thing, i completely understand this from the position of somebody who joined the team, but do you tell every possible new hire how the company financials look before they sign up? I absolutely love the idea of that much transparency, but i'm just not sure how it would work in less than perfect reality.

swombat 10y ago

I haven't been in that situation in terms of being in a high-burn rate, VC-funded startup, but I think the transparency can work if it is consistent. Of course, if our company tells us nothing about its finances and then suddenly the news leaks that there is only 3 months of runway left, then we'll be likely to want to leave. Not only can the company not keep its financial promises, it can't even give us ample notice about it! On the other hand, if we are aware of our company's financial situation from day one, then approaching the end of the runway is much more gradual rather than sudden, and also this news comes as part of a whole pattern of honesty and openness by the company. Within this context, I see it is entirely plausible that the openness builds loyalty. Sure, some people will say "I can't afford the risk of being unemployed for even a week right now, so I'm going to have to get my ducks in a row to be able to find another job promptly, and I may have to leave before the next round", but they will tell the company that (so it can plan around those departures) and they will try to arrange things not to screw over the company. And what's the alternative? Lie to those people who are working hard for you, and risk them screwing up their life if you don't manage to close the next round? What kind of broken human does that to their colleagues as a matter of conscious, systematic decision?

taheca 10y ago
@swombat FTW. you are absolutely right. I think that is how they would handle things at Buffer, Automatic, or Toptal.
Roritharr 10y ago
Thats the thing, i completely understand this from the position of somebody who joined the team, but do you tell every possible new hire how the company financials look before they sign up? I absolutely love the idea of that much transparency, but i'm just not sure how it would work in less than perfect reality.