Startup transparency
22 Feb 2025I spent enough time in startups as an employee to notice things. Startups usually fail, that’s well known and part of life. This is bad for everyone including employees. As an employee we have much less information about how the business goes and it makes our situation more vulnerable.
The transparency
The lack of information is actually a good thing because it is a good measure of how the business goes. My observation is this: when the business goes well, the C level is very eager to share information. This is when I hear presentations, how much the customers love us and how easily we beat the targets and really, the limit is the sky.
The sales figures are public too. Slack channels show the new deals, the deal size, stats, and more.
And then something changes. I saw that the information on the Slack channels slowly dried out. I asked what happened, and I heard that there is a new sales system that doesn’t integrate with Slack.
Slowly, the amount of forward looking statements in the townhall presentations are dialed down. And the frequency of the townhalls dwindles.
The confidence of the C level disappears visibly. In one company there was an anonymous channel where everyone could ask questions and the questions were visible too. At first all questions were answered. Later this channel disappeared too.
These are small signs. Looking back they explain what happened later to the companies. I’ve seen this more than once.
There is no bad news though. Rumours may circulate, but nothing official. Bad news is not publicly shared.
The layoffs come much later. I don’t wait for them. It is much better to find a new job when there is no pressure.
All obvious
When I look back, these are all obvious. As a business owner, you always hope that things will improve. Sharing bad news will make the employees nervous and they may not share the optimism. When key employees flee, the situation gets worse.