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.
> 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>".
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.
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.
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?
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.
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.
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.
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.
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.
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.
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.
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.
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?
cj|3 years ago
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.
fsckboy|3 years ago
<cough>customers<cough>
diob|3 years ago
Of the two places I've worked, the one who was hiding the metrics ended up having great financials and selling.
The other said they had to do layoffs but would be fine until X years later. A few months later they laid off another round of employees.
chii|3 years ago
So if those metrics arent painting a great picture, does the company assume that such trust and respect turn into loyalty?
In other words, the ultimate goal is to buy loyalty?
no_butterscotch|3 years ago
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>".
reidjs|3 years ago
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?
safety1st|3 years ago
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.
ChuckMcM|3 years ago
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.
A4ET8a8uTh0|3 years ago
I certainly don't think it was some sort of golden age. Best I can say about it is that it had benefits.
trynewideas|3 years ago
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.
shortstuffsushi|3 years ago
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?
GuillaumeBrdet|3 years ago
pffft8888|3 years ago
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.
widdershins|3 years ago
tomcam|3 years ago
bordercases|3 years ago
conductr|3 years ago
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.
GuillaumeBrdet|3 years ago
samsquire|3 years ago
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.
amelius|3 years ago
quickthrower2|3 years ago
collaborative|3 years ago
holistio|3 years ago
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.
*edit: grammar
GuillaumeBrdet|3 years ago
inasio|3 years ago
neon_electro|3 years ago
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.
clintonb|3 years ago
version_five|3 years ago
xyzelement|3 years ago
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.
andygcook|3 years ago
wolverine876|3 years ago
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.
unknown|3 years ago
[deleted]
infecto|3 years ago
constantly|3 years ago
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.
jratkevic|3 years ago
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.
rileyphone|3 years ago
It’s exactly once people start saying this that it becomes the least true.
mbesto|3 years ago
crawfordcomeaux|3 years ago
7e|3 years ago
skeeter2020|3 years ago
Well sure, if that's why you were posting. You could ask the same question about being a nice person "What's in it for me?"
But if the goal is to pay to forward in thanks for the help you got along the way, this argument doesn't hold water.
jhatemyjob|3 years ago
slimebot80|3 years ago
If you are small, being open brings alot of momentum and notice.
This blog post isn't acknowledging that being open is actually even more viable for thousands of new startups given previous successes.
He has confused popular startups closing as the end of all openness.
SergeAx|3 years ago
indymike|3 years ago
Joel_Mckay|3 years ago
There be treasure in the long-tail of a fragmented market sector. lol =)
varelse|3 years ago
[deleted]
aquinas_|3 years ago
last_responder|3 years ago
imiric|3 years ago
damechen|3 years ago
I'm just a guy quitting 9-5 and hope to make some money online to support my family :)
I mentioned apps I built before in this tweet. Testimonial.to is the only one that took off. https://twitter.com/damengchen/status/1344525420813697024
sergiomattei|3 years ago
More than enough credibility if you ask me.
paulftw|3 years ago
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?
jhatemyjob|3 years ago