[HN Gopher] Ask HN: How much info should founders share with ear...
___________________________________________________________________
Ask HN: How much info should founders share with early stage
employees?
I'm the founder of a small 7 person startup in the fintech space.
Should I share info on upcoming behind-the-scenes partnerships, etc
with employees to pump them up? Or is giving too much information
counterproductive/risky if an employee leaves?
Author : prndqs
Score : 109 points
Date : 2022-08-27 06:15 UTC (1 days ago)
| Ken_At_EM wrote:
| We have a company scorecard that shows sales funnels, bookings,
| production numbers, cash and collections info, etc, all
| completely open to any employee at the company.
|
| A soldering technician on our team can literally see how we're
| doing on cash and collections at any time.
|
| We have company-wide updates 2-4 times a month where we brief all
| employees on important ongoings for 30 minutes.
| horsawlarway wrote:
| I'd default to transparency - but that means also being up front
| about risks.
|
| It's very nice to be able to say you have a partnership that is
| being discussed - it's less nice to "pump them up" on a
| partnership that's not a sure thing.
|
| So if you disclose (and I think most times founders should) -
| disclose responsibly.
|
| That means - don't bullshit them about how real the partnership
| is. If it's "Just in the discussion phase" (or frankly, anything
| other than a signed deal) make sure they know it's not a sure
| thing.
|
| "We're working on a partnership with ____. We think it can
| provide some great opportunities, but it's not a done deal. We're
| still trying to figure out the details, and there's a chance it
| may not happen - but right now it's being discussed".
| rufius wrote:
| If you trust them enough to work on your product at such a
| crucial time, then you should trust them enough to give them full
| transparency.
|
| Siloing info rarely benefits anyone. At best it builds
| incompetence and distrust (lack of full picture), and at worst it
| dooms best laid plans.
| aintmeit wrote:
| Here are things that I would consider significantly more
| important than wanting to pump up employees by giving them
| information on partnerships:
|
| - making sure your business model is viable
|
| - involving employees in the software development process so they
| understand the user's perspective when developing the product
|
| - paying people fairly
|
| - helping employees structure work/life balance
|
| - having clear and scoped value streams to prevent undue burden
| on the organization
|
| - rigorously test business assumptions on an ongoing basis
|
| - leading by example through being a decent human and treating
| others humanely
|
| While information is power, secrets are not what makes a company
| valuable. Corporate espionage is trivial these days -- you can't
| stop people from talking. Nowadays, the best competitive
| advantage is execution. If you can execute well on the basics,
| you'll blow 95% of the competition out of the water because it
| takes a certain kind of person to cultivate talent. Your
| competition is only human, and they naturally want to cut
| corners, which is why they rely on mind games, or what some might
| call _sales_.
|
| Still, it seems polite to answer your question about the effects
| of pumping up your team with info on upcoming partnerships, so I
| will despite the fact that I think you're coming at it from the
| wrong angle. Ask yourself why would they care about this
| information you're providing? If they do seem like they care,
| either:
|
| - they stand to gain directly from this partnership or
|
| - they're putting on a performance for social and political
| reasons or
|
| - you hired employees who fail to reason properly, in which case
| you have bigger problems than their enthusiasm
|
| If you want to provide more context without giving away too much
| info, please feel free to. Otherwise, I hope this answers your
| question.
| jon-wood wrote:
| Your explanations for why employees at an early stage startup
| might care about upcoming business deals seem to be missing the
| obvious one to me, that you've employed people who are thinking
| about the business as a whole rather than their tiny slice of
| the picture. The single most vital thing in an early stage
| startup is acquiring customers, and these deals are how that's
| done, why _wouldn't_ one of seven employees at the company want
| to know about how the business is doing?
|
| I'd go far as to say if early stage employees aren't engaging
| with every part of the business you've employed the wrong
| people because at that stage of the game there isn't space for
| people who just sit in their box and don't venture out of it.
| rmk wrote:
| It's not beneficial to have every single person at the
| company thinking about the business as a whole. Now more than
| ever, we live in an age of specialization and it's
| counterproductive for all the people at the company to be
| thinking about the business as a whole. That is why there are
| departments, teams, and other groupings with discrete
| responsibilities: the separation of responsibilities and
| focus on small, manageable areas of responsibility helps
| people do a great job, efficiently.
|
| This is true even with a company that's just starting,
| because there are way too many aspects of running a company
| for a single person to contemplate, let alone do efficiently
| or well.
| ketzo wrote:
| thinking about =\= working on
|
| I can learn about my company's deal flow and benefit from
| that without needing to spend six hours in Quickbooks
|
| It's good for me to know the feature I'm building is
| important to a prospective customer who has an emphasis on
| security, even if I don't sit on a call with them
| yAt8Pirng5fSxax wrote:
| Those departments, teams, and other groupings - none of
| which probably exist in a 7 person company, by the way -
| have to interact with each other.
| rmk wrote:
| Yes, and trust plays a huge role in that more than
| anything else. Information sharing is unlikely to make a
| huge difference for a close-knit group that likely knows
| one another quite well to begin with.
|
| Even in a 7-person company, there aren't many direct
| interactions between disparate functions that are called
| for, or even desirable, for that matter. Employees and
| founders/co-founders have massively different incentives
| and need for information. Some functions, such as HR,
| actually rely on keeping a lid on certain types of
| information to function properly!
| trombone5000 wrote:
| > why wouldn't one of seven employees at the company want to
| know about how the business is doing?
|
| If the early-stage employees have significant equity in the
| company, then they'll be very interested in how the company
| is doing. If their upside is paycheck, bonus and equity
| proportional to their salary (as you'd find in an established
| company), then one employer is as good as another.
|
| I think the question of how much information to share is
| heavily dependent on how loyal the employees are to the
| company, and loyalty is almost entirely a matter of how much
| equity they hold (and more specifically how much equity they
| hold relative to the founders.)
| etothepii wrote:
| I doubt this is true. I can believe that it's a good idea
| to give people equity at the margin. But in my experience
| loyal people are loyal. People who put themselves first put
| themselves first. I think there's very little correlation
| between how good people are and how good they think they
| are.
|
| Take a good, valuable or loyal employee and treat them
| badly and you can probably lose them. Take a bad,
| incompetent or disloyal employee and no matter how much you
| compensate them I suspect you can not change them.
| yAt8Pirng5fSxax wrote:
| In my experience loyalty is almost entirely a matter of who
| feels trusted and valued... in which sharing information
| freely (or appearing to) is a major factor. Especially when
| that information is directly relevant to them and their own
| financial security - even if you're just making wages it's
| still nice to know that your employer is stable.
| bagels wrote:
| I think the motivation of early employees can be quite
| different from what you propose. I can speak to my own
| motivation:
|
| Knowing what partners are in the pipe lets me contribute to
| landing the customer in the first place. I can work with exec
| to team on how we can improve the product to appeal to the
| customer. I can provide costing estimates to see if the
| customer is worth acquiring.
|
| A big part of startup compensation is tied up in equity. If
| there is no insight in to the business health, I am not able to
| accurately value my employment.
|
| One of the opportunities in a startup is in learning how you
| might eventually run your own business. Learning about customer
| acquisition, about corporate structure and strategy, and about
| fundraising are all things I expect to be exposed to in
| exchange for much lower compensation.
| kareemsabri wrote:
| Perhaps they care cause early stage startups are hard and it
| can feel like a Sisyphean task, so encouragement / interest
| from outside parties helps drive their motivation.
| webmobdev wrote:
| This is great advise - if everyone could be a businessman, all
| of us would be and nobody would be an employee.
|
| Employees only care about their salary / stock options and
| professional growth and fulfilment. If an employee isn't
| confident in your ability to manage the business, they will
| jump ship (which is their right to do so, just as it is yours
| to fire them when the business falters). And so it is best to
| keep them focused and motivated on the job they have to do.
| There maybe some employees that you think have partnership or
| managerial potential. You should be confident you can groom
| them, and thus can share some business information with them
| and observe how they make the best use of that to help you grow
| your company and / or advance your goals.
| palata wrote:
| I disagree. Startup employees care about making a good
| product, too. That's the rule when you join a startup: you
| won't have the highest salary, and maybe your startup
| bankrupts in 6 months, but you get to have more impact.
|
| If you don't want the risk and don't want to care, go in an
| established company.
|
| But that all means that you should be transparent with
| startup employees, because many decisions depend on that at
| all level. If you hire employees who believe that they have
| infinite time and money to get the product to work, then you
| probably did not hire well, IMO.
| etothepii wrote:
| Have you run a startup? Are you a senior dev? Have you
| managed a team?
|
| I'm not asking to be rude, but if you are 45 having run a
| couple of startups (even if they both failed) I'd be really
| interested in this opinion and what experiences got you to
| it. If, however, you're still at college and this is "pure
| philosophy" it's of much less interest.
| [deleted]
| mamoriamohit wrote:
| "What if we train our people and they leave?" "What if we don't
| and they stay?"
|
| Forward-looking entrepreneurs are building in public. In my
| opinion, sharing news and information with core team is overall a
| positive investment.
|
| If there's a lack of trust, maybe, there are bigger problems in
| the startup to fix?
| verdverm wrote:
| succinct and accurate, transparency triumphs, though there are
| some details that should be kept among a few until the deal is
| done. It definitely depends on the size of the company
| Ken_At_EM wrote:
| Not investing into your people is a sure fire way to be
| ineffective and signal to people that they're not worth
| training and should leave. Couldn't agree more with you.
|
| I have made the claim in support of transparency before that it
| matters little if even my competitor would be able to get ahold
| of my road map as an extreme example of transparency. My
| forecast is that sure, they might zig or zag a bit differently
| but the reality is that their road map is already full of the
| things that they need to build next as well as their best
| ideas. They are my competitor, and generally they are going to
| consider their ideas superior to my own, so why would you
| expect them to change and copy my road map?
| sasquatch69 wrote:
| There's two categories of responses on this page: 1. people who
| have never ran a business and been fully transparent 2. people
| who've done it and recommend selective transparency because of
| the consequences
|
| haha
| izacus wrote:
| Ah yes, the wisdom of MBAs and other career managers, which is
| working out so well elsewhere :P
| sasquatch69 wrote:
| The response trend seems to be based on personal experience
| rather than MBA/career manager.
|
| I'm neither an MBA nor a career manager (started biz out of
| college with $300, 5 years lowest paid employee, few mil run
| rate now, no investors) and my transparency experience has
| been both positive and negative. So I only do transparency
| that (I think) leads to positive outcomes now.
| PeterisP wrote:
| What role do you want these early stage employees to have?
|
| If you hide everything, that is consistent with having an
| unprivileged role at a risky enterprise where the employee should
| justly assume the worst - e.g. that the only compensation that is
| real is one that is cash-in-pocket, and that the job can end at
| any moment, as the company might be dead in the water, out of the
| runway already. That's not necessarily an obstacle, but that
| requires paying some premium (in cash, not equity) to justify
| these risks.
|
| If you're open and trust the employees with realistic financial
| information, then the employees can trust the future of the
| company, to the extent that the information actually supports the
| notion that the future is there and not faked for pure PR.
| [deleted]
| _ZeD_ wrote:
| maybe you can ask them if they are really interested
| WaitWaitWha wrote:
| When you write "employee", what role is the employee in? Do they
| need to know so they can make good business and life choices? If
| not, it is just burdening them.
|
| I definitely think that CxOs need to be aware of most of the
| things. I recently was asked to join a start-up in the C-suite,
| but had to turn it down. Too coy with details for my taste. If
| you trust me enough to invite me to take care of mission critical
| elements, do not hide things from me.
|
| But, there is such a thing as over-sharing. Not every role is
| mission critical. If the role does not need the information to
| make business decisions there is no reason the share, in my
| opinion.
|
| >Should I share info on upcoming behind-the-scenes partnerships,
| etc with employees to pump them up?
|
| Will it _directly_ impact their work? If so, share it with them.
| If not, what is "pump them up" mean? Are you looking for a
| Steven Ballmer presentation reaction?
|
| I will presume you have an NDA and non-compete with all of your
| employees.
| derekzhouzhen wrote:
| Share all the hard facts: who's who, capital raised, cash flow,
| competitive landscape, committed roadmap, etc.
|
| You can withhold future plannings to yourself unless you need
| inputs.
| eigenrick wrote:
| Give them as much as they want to know.
|
| Some folks don't want distractions. They don't care about the
| state of things that don't directly pertain to their job. They
| just want to build stuff.
|
| Other people, like myself, want to know everything.
|
| If you want honesty and transparency from your employees, you
| have to create a culture of it. Which means it starts with you.
| baskethead wrote:
| I would never join a startup that didn't have complete
| transparency. I've been fucked by startups before where YC
| founders held all the information and then sold the company,
| enriching themselves but leaving the scraps for the employees.
| The next startup I made sure that the founders were very
| transparent and honest and trusted us with maximum information.
| Even though it didn't take off, I still enjoyed being a part of
| their team so much more.
|
| Even unicorns that I worked for, the CEO shared very detailed and
| transparent information with employees even as the company got
| extremely large, which I appreciated.
| rr808 wrote:
| I think it probably depends a lot on your employees. Some might
| be really interested in what is going on and enjoy being in the
| loop. Some might have been burnt before so actively want to see
| signs of decay or lack of growth. Some are there for the tech,
| really dont care. If your staff is like the last group you're
| wasting your time doing presentations.
| berlincount wrote:
| Confidentiality should be agreed on in a sane manner.
|
| That said - full strategic insight into the vision and what's
| done to achieve it and welcoming input will engage employees in a
| very productive way, but requires free flow of information.
|
| Usually, the benefits outweight the problems _by far_.
| rroot wrote:
| I walked away from a start-up and potentially a lot of money,
| largely due to lack of transparency.
|
| I think the worst thing that can happen is that your employees
| stop trusting you. They're still on the payroll but they're there
| only until something better comes along.
|
| Be careful with your answers to them when they ask for
| information you don't want to give out.
|
| If it's confidential, say that straight out and explain why. If
| the employee doesn't understand it or feels you're being
| deceptive or not totally honest, accept that there now has been a
| breach of trust between you.
| kache_ wrote:
| Radical transparency is the best policy
| lostdog wrote:
| I would share things that are true now, but be careful about
| sharing things that may happen in the future.
|
| For future partnerships, the real risk isn't that your
| competitors find out. The real risk is that the partnership falls
| through and your employees feel demoralized.
|
| So I think it's fine and good to share information about the
| discussions your currently having with bigger companies, but less
| of a good idea to preview the possible future relationship.
| yazaddaruvala wrote:
| > The real risk is that the partnership falls through and your
| employees feel demoralized.
|
| Demoralized is one thing, but also if enough partnerships are
| falling through they might get the sense that you're not a good
| business person. Which may also be an accurate take away that
| you as a leader don't want to hear/realize about yourself.
|
| Without having been the leader of a startup I'd say the best
| thing to do is treat yourself like anyone else in the team ie
| the expectation of equal sharing back and forth. Help the team
| help you find out what your strengths are and what your
| weaknesses are.
|
| Don't try to hide your weaknesses or hope to get better at it.
| Especially if trying to hide/improve weaknesses are taking away
| from showcasing strengths. Instead get your team to hire in
| people to fill your weaknesses and learn from them. Meanwhile,
| double down on your strengths and continue the transparency and
| working as a team member.
| avemuri wrote:
| This is good advice for when you're larger, but I'd still share
| it. At 7 people, they should be involved. If anything it's an
| opportunity to earn their trust and show them you're in this
| together.
| kbos87 wrote:
| My experience kicks in quite a bit north of where you are, but
| for what it's worth, I joined a company as employee ~150 that
| practiced near total transparency on everything.
|
| We went public, are now north of 8,000 employees, and it's still
| nearly as transparent as when I joined - financials, product
| metrics, anonymized employee trends/HR data, major decisions...
| the list goes on but pretty much everything is done in the open
| with only a handful of exceptions.
|
| I can't think of a situation where that level of transparency was
| a hindrance to the company or regretted by our founders as far as
| I know... in fact the opposite, I think it creates a culture of
| ownership and makes people feel valued and respected.
|
| As an employee, now that I've experienced having that level of
| access, I'll never join a place that doesn't offer a similar
| level of transparency.
|
| Edit: Adding a couple thoughts based on some comments I'm seeing.
| I really believe that restricting information to specific people
| or keeping it from people who "might not understand it" is
| wrongheaded.
|
| If people are interested and curious, help them learn. If they
| aren't, who cares? When there was feedback about wanting to
| better understand financials, our CFO did an hour long
| walkthrough of SaaS economics. When new legislation forced
| operational changes, our general counsel walked us through not
| only what we needed to do differently but how he approached his
| job and situations like this. People come to work (especially at
| startups) to stretch and to learn, regardless of their role or
| level.
| quickthrower2 wrote:
| Exactly. Thinking back the transparent places correlate to the
| places I felt more at home. I only just made that connection
| now. It is a way more interesting all hands meeting in a
| transparent company too. All though the opaques tended not to
| have them.
| sasquatch69 wrote:
| If you can't think of a level of transparency that was a
| hindrance to the company, then the company is not fully
| transparent.
|
| No company has ever had 100% smooth sailing.
| mupuff1234 wrote:
| How does that level of transparency for a public company not
| lead to insider trading?
| ljfp wrote:
| They can put in place some things to mitigate/prevent this.
| One example that comes to my mind is the use of trading
| windows for employees. I.e: you can buy company stocks only
| during some specific time windows announced at the start of
| the fiscal year.
| no-reply wrote:
| This is what I have seen at Amazon.
| metadat wrote:
| Doesn't Amazon do blackout periods for most grunt-level
| employees?
|
| Usually only executive-level and higher employees have
| access to information considered material to the business
| trajectory at large. Emphasis on _usually_ ; all that
| boring bigcorp training covers the ins and outs.
| rozenmd wrote:
| most folks don't want to go to prison?
| Invictus0 wrote:
| Just wait till you have a layoff.
| hartator wrote:
| Everything.
|
| The missed opportunities of not sharing is way greater than any
| misuse of the information.
| brianwawok wrote:
| Perhaps. My experience has been that people didn't want to hear
| the ups and downs. Bad sales month? People start fearing for
| their job. It will depend on your team, but remember not all
| employees are entrepreneurs. Sharing downs and struggles will
| cause personal stress for many of them. I think most companies
| are closed info by default, and after running a company in both
| modes, I understand why.
| nibbleshifter wrote:
| Be as open as possible.
|
| The places I've worked that were basically "open books" and super
| transparent tended to be more successful than the more opaque
| places.
|
| Largely because people felt they had more of a stake in it, felt
| more involved and engaged, and would bring more
| ideas/contacts/knowledge to the table, etc.
|
| The more opaque places that practiced unnecessary levels of "need
| to know" tended to not work as well, as the company couldn't
| leverage its peoples experience, networks, etc as efficiently,
| and people generally work less well if they are kept in the dark.
|
| Being open tends to create opportunities, and your employees can
| warn you about risks you might be missing.
|
| Being closed? You lose that advantage.
|
| A decent NDA and properly written contract will cover you if
| someone leaves.
| throwagag100 wrote:
| > I'm the founder of a small 7 person startup in the fintech
| space.
|
| If you can afford $1m/y in payroll, you're not small :)
|
| > Should I share info on upcoming behind-the-scenes partnerships,
| etc with employees to pump them up? Or is giving too much
| information counterproductive/risky if an employee leaves?
|
| The kind of person who needs "full transparency" that these
| Internet randos are advocating isn't going to be working very
| hard. You can't afford to blow $1m/y on people who use Twitter.
| That said, don't conflate "full transparency" with having
| meaningful direction and vision, and rising above the fray of
| agile development.
| mihaic wrote:
| For this sort of situation, I'd always avoid any generic advice
| that isn't a "how to". "It depends on the team" really is the
| only generic info I'd share, since you still have to consider
| your situation.
|
| The more professional and emotionally mature your team members
| are, the more I'd share. If a huge deal fails, juniors can be
| badly affected and will pull down morale, without much upside. On
| the other hand, experienced colleagues can catch early mistakes
| that could cost a lot more later.
|
| Try to mentally simulate people in multiple situations and it'll
| be a lot clearer for you.
| flashgordon wrote:
| As much as they'd like? For me personally after having been ice
| burnt by the kookaid I'd be very worried if there was hand
| waiving and cloudiness for things I actually want to understand
| and get details about. In that regards show me cap tables, show
| me who gets what kind of preferred vesting, what impact is future
| funding rounds going to have on my outcomes, what stories, I mean
| assumptions, are your valuations predicated on? Unlike founders
| afaik most employees don't have the ability to sell early stock
| and have to wait years and years for an exit. So full
| transparency is the least one can do to earn trust.
| buro9 wrote:
| I've seen everything shared really well.
|
| Typically cash flow at a high level is shared, the KPIs are
| shared (revenue per employee, annual run rate, deals being worked
| on, etc).
|
| As it scales then I've seen things being held closer to the
| chest... companies tend to learn that the people they've hired
| between the 500-1,500 headcount range are less family, more
| likely to leak things publicly... so then cards get held closer
| to the chest, more consideration is put into what is shared.
|
| What I've never seen shared: cap table, who has what options,
| salaries. The latter two things are usually solved by whisper
| networks between staff, the former is the big one... without
| aspects of it one cannot really know whether their options are
| worth anything at all and how much they're getting, and for early
| employees (within the first couple of hundred) that's typically
| how they get screwed on negotiations or simply through
| inexperience/greed by founders.
| explaingarlic wrote:
| If a large enough chunk of the information, that happens to be
| what you'd give to your employees to be frank about the direction
| your start-up is going, is stuff that your competitors can use,
| then why aren't you making these employees sign an NDA?
| stephc_int13 wrote:
| I've been in both camp, founder and employee in a startup.
|
| From my experience, sharing is mostly bad.
|
| Very often, you'll be tempted to share good news too early, and
| very often it won't materialize (startup life is a roller
| coaster)
|
| This alone will erode the morale of your team.
|
| But there is an other factor, many humans, when presented with
| data and problems, tend to at least think about solutions, and
| they dislike being ignored.
|
| Their solutions and ideas might be good, but they are very often
| half-baked and everyone has different ideas and priorities.
|
| In practice, when people are asking for information, they
| implicitly are asking for power.
| encoderer wrote:
| Everything except for their own deepest fears and doubts. You
| really need to save those for co-founders who are as invested as
| you are.
| aliljet wrote:
| As an employee of a post-seed, immediately-pre-series-a company,
| I've wondered if the cap table should always be public. It seems
| like hiding ownership is potentially highly deceptive, but I'm
| looking at this from the employee perspective....
| m4jor wrote:
| Yes be completely open with all employees.
| ystad wrote:
| With 7 people in the company, I would assume that you are close-
| knit in terms of trust. If that is not the case, then either you
| need to verify if there is trust or you have verified and there
| is some missing trust: I think this is underlying reason that you
| asked the question in the first place. I think this might present
| an opportunity for you to build trust.
|
| Why I think you should share strategic information with your
| early employees? In my opinion, not sharing strategic
| partnerships to early employees misses the point of building
| trust with your early employees. Your early employees are in it
| for the experience of ups and down, and they will be benefit from
| both. Critical feedback from them is especially important at this
| time.
|
| You will have situations where an employee or even a co-founder
| leaves, I think you have to be ready for that.
| anomaloustho wrote:
| Transparency is great, and I think the main balance that might be
| missing in this context is how much frequency/latency there is
| between events that are taking place. I see it more like a stock
| ticker. There are ups and downs, some big swings that happen at a
| micro scale, and then overall trends.
|
| It's good to identify how much frequency your team can handle and
| where to dial that in.
|
| E.g. Monday: really hot lead, Monday afternoon: just got off
| call, lead upset about missing feature - not sure if deal will
| happen, Tuesday: contract sent. Wednesday: Lots of red lines, not
| sure if we can do this. Thursday: Deal signed. -- This is very
| high frequency reporting with lots of ups and downs. It can be
| hard for a team to even focus with this amount of thrashing.
|
| Another example: Monday: Prospective client, Next Monday:
| Contract won/lost, and these are the reasons.
| quickthrower2 wrote:
| This is about knowing your audience. Sales manager would want
| all this info. Engineer probably doesn't. Same way sales person
| doesn't need "looks like bug is fixed" "failed a CI test"
| "getting help from platform team" etc.... Just "the SSO bug you
| raised last week is now fixed"
| austenallred wrote:
| You should ask other founders about this. I wouldn't leave
| important decisions up to HN's crowdsourced truth-seeking.
| lmeyerov wrote:
| Different perspective, more about individual enablement vs
| company risk:
|
| - Share info that enables independent decision making and actions
| so your team can help recruit new teammates, sell to customers,
| choose designs, and at a personal level, make personal financial
| decisions. If not, you're hobbling your team, who are your main
| shot at success. Just be clear that info is internal.
|
| - Level anything forward looking, good or bad. Relatively few
| people understand that good sales requires significant loss
| rates, what a slog fundraising typically is, etc, so when some
| big lead doesn't convert or a process takes awhile, bigger issue
| is avoiding unnecessary heartache & whiplash. So share progress
| good & bad, but always level it. Partnerships, key hires, leads,
| VCs, talks, releases: celebrate real wins and analyze losses, but
| it's a marathon, so don't pump people up too much on the barrage
| of things outside of your control. The sharing is mostly
| dependent on the experience of the individual receiver.
| ryanSrich wrote:
| Why hide anything? Early employees should know they are taking a
| risk too. If they don't know that going in, they aren't a good
| fit. Share financials, risks, concerns, thoughts from the board
| (within reason), what has worked, what hasn't, runway, customer
| feedback, etc.
| chrsig wrote:
| The best way to ensure your employees wont be honest or
| transparent with you is to not be honest or transparent with
| them.
|
| Or maybe to put it a bit more harshly: _You 're not important
| enough to be hiding details_
|
| Be open, honest, and _realistic_. Say what you _hope_ will come
| to be as a result of your actions. Be clear when things aren 't
| set in stone.
|
| Be transparent so that they can all work towards the same goals.
| If you keep them in the dark, they wont have any intuition on how
| to take initiative. Let positive results pump them up.
| sgallant wrote:
| +1 to this comment.
|
| Before I founded my company, I worked for another startup that
| wasn't very transparent. It was not a healthy/empowering
| environment.
|
| Now, when dealing with things like partnerships, customers, and
| finance (runway, burn, revenue, fundraising, etc) I ask myself
| "what type of company would I want to work at?" and I always
| lean towards transparency.
|
| Having said that, this needs to be done carefully. Instead of
| pumping everyone up about a potential partnership that could
| fall flat, you should try to be realistic and objective about
| it. "I'm really excited about a potential partnership with X.
| Even though this partnership will require we invest some
| resources doing Y, I see the possible benefits to the company
| as Z. From my perspective, this is a good opportunity for us.
| This isn't finalized so I'll keep you up to date on our
| progress. Let me know if you have any concerns or questions
| about this."
| chrsig wrote:
| > Having said that, this needs to be done carefully. Instead
| of pumping everyone up about a potential partnership that
| could fall flat, you should try to be realistic and objective
| about it. "I'm really excited about a potential partnership
| with X. Even though this partnership will require we invest
| some resources doing Y, I see the possible benefits to the
| company as Z. From my perspective, this is a good opportunity
| for us. This isn't finalized so I'll keep you up to date on
| our progress. Let me know if you have any concerns or
| questions about this."
|
| Yes, exactly this.
|
| It's what I meant by:
|
| > Be open, honest, and realistic. Say what you hope will come
| to be as a result of your actions. Be clear when things
| aren't set in stone.
|
| Just be transparent with what you're trying to accomplish,
| what the risks are, what you're uncertain about, where things
| are in the process, what the next few steps are, and what
| contingencies there are.
| 0xfaded wrote:
| Err on the side of transparency, but also just ask how much they
| want to know (maybe during 1-on-1s). Information can create extra
| individual stress, and some people would rather just be shielded
| until bad news hits.
| aloukissas wrote:
| Anything less than all of it is a red flag.
| djbusby wrote:
| I'm also in the full transparency boat with two exceptions:
|
| 1) if the partnership requires NDA or another type of
| secret/security then keep that limited.
|
| 2) many deals fall through, so I choose to delay worthless detail
| on those till the deals are more mature.
| kareemsabri wrote:
| I don't think I'd worry about the risk of them leaving (unless
| you have some highly lucrative IP, and as a fintech you probably
| don't). The thing with sharing potential deals is mostly just
| they will usually fall through / not happen, so do you want them
| to ride the ups and downs with you? I'd probably share while
| keeping their expectations realistic, cause otherwise it can feel
| like working in a vacuum.
| dataflow wrote:
| Yeah this is the biggest issue to me. Don't voluntarily give
| out news that might not come to fruition. Crushing high hopes
| is worse than not giving them in the first place.
|
| If a _particular_ employee seems keen to learn more, and you
| think they might benefit from knowing, you could privately let
| them know there are tentative things you 're pursuing, and give
| an example or two, while being cautious with them and telling
| them it might fall through. But no need to announce things that
| haven't happened yet.
| mkl95 wrote:
| I have worked for small companies that shared virtually
| everything. It did not go well when senior people found out their
| bosses where making n times their salary, among other stuff. The
| lesson is that you should only share what you can afford to
| share. If you do share stuff, share it async instead of spamming
| meetings.
| bvanvugt wrote:
| At that size, share everything. But also share _all_ realistic
| outcomes, including what failure cases might look like. It 's
| more about earning trust than "pumping" anyone up.
| spoonjim wrote:
| There are very few cases in which outsiders with power will act
| on "intelligence" from a 7 person startup. You are like the
| government of Palau -- nobody cares what you're doing -- your
| problems are much bigger than getting your stuff cloned.
| pkrotich wrote:
| Depends on what you mean by info - founders (me included)
| sometimes mistake dreams and wishes for sure facts. This can
| backfire spectacularly if the hype doesn't pan out.
|
| So like everyone else I say you should most definitely over-share
| but only once it passes facts check. Whatever that means for you
| & your company.
| gpm wrote:
| > Or is giving too much information ... risky if an employee
| leaves
|
| What is your actual risk exposure here?
|
| For most startups the existential threat isn't competitors, it's
| lack of traction. There's basically nothing that a competitor
| could find out that would substantial hurt the startup,
| especially nothing that they won't find out anyways.
|
| There are obvious exceptions (e.g. you're a hedgefund and have a
| trading strategy which could be wiped out if someone bigger
| started exploiting the same opportunity), but they're called
| _exceptions_ for a reason.
| tschellenbach wrote:
| At Stream with our team of 140 I like to share runway, burn, cash
| balance, revenue, burn multiple and CAC payback.
|
| Historically Stream has grown rapidly and the equity grants have
| been very significant compared to the base salaries. (who knows
| what the future brings, but hopefully that trend continues).
|
| So a significant part of our team's compensation is equity, I
| think it's only fair to be transparent about those topics. Also
| important to share the last round valuation and the revenue,
| since many startups that raised at too high prices are currently
| deeply underwater on their employee's equity.
|
| We do lunch and learns on equity, evaluating startups etc. That
| is important since most people don't have prior experience with
| evaluating startups.
|
| A friend of mine didn't exercise his stock options when he was
| early stage at a company that had an exit above 1B. I think that
| shows how hard it is to evaluate how startups are doing. But
| sharing the data is a good starting point.
| greatpostman wrote:
| Startups are largely a financial vehicle to shift value created
| by employees to founders and investors
| danielmarkbruce wrote:
| Most startups create zero value and go out of business.
|
| So: startups are largely a vehicle to take money from hard
| working people's pensions (the LPs are often large pension
| funds) and put it in the pockets of employees who have created
| zero value.
|
| Now that's a cynical take. But no more than the alternative
| view.
|
| A positive take might be: startups are a financial vehicle to
| take a risk on a new business. The parties enter voluntarily,
| and different parties take different risks and have the
| opportunity for different rewards.
| tlb wrote:
| If you believe that and you're still an employee, what's
| holding you back from founding a company?
|
| Moving from low-paying job A to high-paying job B not only
| benefits you, but causes average pay for A to increase and B to
| decrease, following a supply & demand curve. As more people
| switch from employee to founder, the value transfer and
| inequality you observe will decrease.
| greatpostman wrote:
| I'm working on my own startup
| bdw5204 wrote:
| Corporations as a whole are a financial vehicle to shift value
| created by employees to executives and investors.
|
| Being an early stage employee in a startup with significant
| equity means betting that your employer will eventually grow
| and you'll be somebody receiving the value rather than somebody
| creating it. That's how you reach the upper class in a
| capitalist economy and startups have successfully accomplished
| that for many founders and early stage employees.
| lanstein wrote:
| All of it. (the financials are what matter most) Check out "The
| Great Game of Business" which does a great job of explaining why.
| Ken_At_EM wrote:
| Share it all. Complete transparency. Show them the cash flow.
|
| At your small size you will benefit from the additional trust and
| alignment this will bring. You may find yourself delighted in
| finding that many of your team can see and solve problems that
| you may have missed.
|
| You can be super secretive to combat the BigCo mentality like
| Apple when you have the first class problem of being a BigCo.
| musingsole wrote:
| Not everyone wants all the information and with many business
| plans, knowing the full version might be confusing to people
| working on today's stuff.
|
| I advocate balancing full transparency (I certainly don't mean
| to hide any info!) with a culture that can create a time and
| place for conversations that might go beyond today's work.
| DiggyJohnson wrote:
| I think 'don't firehose them with all your startup's
| problems' (or: use common sense and follow professional and
| conversational norms) is built into OP's point. I don't even
| think you're disagreeing.
| Ken_At_EM wrote:
| I have never had anyone become negatively confused by our
| transparency.
|
| They ask for clarification, you provide it, and they are that
| much more effective.
| whimsicalism wrote:
| I rarely find the "people will be confused by full
| transparency" line very convincing. To me it seems like there
| is some other, unstated reason to be less transparent -
| because confusion is easily remedied by prioritizing certain
| information while making the rest just accessible if someone
| wants to look.
| izacus wrote:
| In corpspeak of companies I've worked for, "this will cause
| confusion" is a codephrase for "we want to prevent someone
| complaining and making a fuss about shadier parts of our
| work".
|
| It's the ultimate "let's hide this because we know people
| won't like it" phrase.
| robertlagrant wrote:
| How did you verify this was the case every time you heard
| it?
| Ken_At_EM wrote:
| What sort of information could cause confusion in the
| workplace, exactly?
|
| Excluding private HR data obviously.
| [deleted]
| 6510 wrote:
| You go from focusing on executing a well defined strict
| set of tasks that closely fit your brag worthy skills to
| pondering a partially defined set of fuzzy "more
| important" goals that poorly fit your skills while unsure
| if your noob input would either make you look like an
| idiot or be very valuable.
| dasil003 wrote:
| It's not necessarily about anything shady though, it can
| just as easily be legitimate differences of opinion, too
| many cooks in the kitchen, bikeshedding, or landgrab
| concerns.
| izacus wrote:
| You are right, I'm a bit cynical here. But that's what
| makes the phrase brilliant - it can be used for both and
| it's hard to figure out which one it is on the spot.
| morelisp wrote:
| I also used to think this way, until I tried being fully
| transparent with my team. There really are people whose
| mindset is 100% "what should I do?" and never "what are we
| doing?" I think the mistake is assuming it correlates with
| seniority or skill or something; it seems to be independent
| of both.
|
| On the other hand, I'd never want a "what should I do?"
| person as an early startup hire.
| Spivak wrote:
| > On the other hand, I'd never want a "what should I do?"
| person as an early startup hire.
|
| This doesn't apply to tanks or healers, only dps. Playing
| tank as an infra person I would do my team a disservice
| if I didn't make myself available on a dime to unblock my
| team. Big picture is fine for the planning meetings but
| on small teams I'm usually the only one, I have a bunch
| of cooldowns to keep track of, and don't always have the
| context because I have a separate workstream that has to
| telegraph out ahead of the dev work.
|
| I am always asking what I should do that has the most
| impact for my devs.
| vageli wrote:
| Healers don't go around asking who needs healing, they
| see low health and prioritize. That is not asking "what
| should I do?", that is being proactive about the needs of
| the team.
| morelisp wrote:
| This framing is extremely stupid and misses the point
| entirely.
| vageli wrote:
| That's pretty uncharitable of you. I am an infra person
| myself and while I appreciate the parent's point about
| making themselves available to pick up other things on a
| dime, I was trying to point out that you can also
| proactively identify needs and address them as an infra
| person, often in ways that can be applied to other teams
| and that this is very much not asking for what they
| should be doing.
| morelisp wrote:
| Independently of the framing being stupid, that anyone
| thinks this is about an infra person being available to
| unblock a dev team or not is a perfect example of the
| confusion that can happen when "what should I do?" people
| get "what are we doing?" context.
| gpm wrote:
| I'm not sure what distinction you're trying to make
| between "what should I do" and "what are we doing". Are
| you talking about people making decisions that prioritize
| themselves over the company? People not being willing to
| go along with existing decisions? Big picture vs small
| picture? Something else?
| Ken_At_EM wrote:
| My experience has been that there are employees who don't
| really want to understand the big picture and just focus
| on their work.
|
| I have never seen transparency hurt the productivity of
| these employees. They know they can look and see the big
| picture any time, they just don't bother to look:
| morelisp wrote:
| "Transparency" means different things to different
| people. I suspect we agree, because my solution to the
| problem is to make it clear to everyone that they can ask
| me anything and I'll tell them everything I legally can.
|
| But for some people "transparency" also means a more
| active communication of this information, and this
| definitely confuses some (other) people because they will
| consistently interpret "we want to do X" or "we are going
| to do X" as "I should, right now, do (sub-part of) X".
| cpitman wrote:
| Here's a non-conspiratorial reason: many engineers are not
| used to the uncertainty involved in day to day business
| negotiations and sales, and allow themselves to be stressed
| out what they see how the sausage is made. The reality is
| that lots of deals fall through, and _that is normal_. But
| if someone hasn 't had a front row seat to that, they start
| wondering "are we failing?", "am I not doing a good enough
| job?", "is our product a failure?" etc etc.
|
| I say this as someone who leads a team that handles the
| promotion and enablement of engineers into a role where
| they have a lot more visibility into sales and strategy,
| and have learned that they really need to have someone
| reassure them until the point that they realize that things
| are working out just fine.
|
| That being said, I'm not sure of the wisdom of inflicting
| that stress on employees that don't have a need to see the
| Backoffice negotiations. Is there anything productive they
| can do, other then getting stressed?
| drewcoo wrote:
| > many engineers are not used to the uncertainty involved
| in day to day business negotiations and sales
|
| 7 person startup, right? Presumably they hired people who
| can wear lots of hats and who can deal with uncertainty.
|
| > they start wondering "are we failing?", "am I not doing
| a good enough job?", "is our product a failure?" etc etc.
|
| Good. Questions lead to answers where there's
| transparency. I'd hope that the people making the product
| would understand the product, the business, and the
| customers.
| ysavir wrote:
| > To me it seems like there is some other, unstated reason
| to be less transparent
|
| Hiring, mostly. If you hire people that don't want, care,
| or are able to understand the full picture, the
| transparency won't pay off. But at small sizes, you
| generally want to hire people that both can and are eager
| to understand the whole picture.
| sasquatch69 wrote:
| If you have cash and you're transparent, your employees
| are likely to ask for it if you have a personal
| relationship with them.
|
| I would say this is frequently even the case for big
| picture employees.
|
| I'm saying this also as the lowest compensated person at
| my company for ~5 years.
|
| To me it's more of an ideal world vs real world. Ideally
| you can share everything, in reality the outcome is
| likely to have a negative impact on both employee
| satisfaction and profit. Ie most likely giving employees
| a raise and them still thinking they aren't getting
| enough due to them seeing the big $ in the bank.
|
| My preferred approach is budget level (we can spend x on
| y, I am open to your ideas) and number light executive
| summary (we have x months runway, not we have y in the
| bank). You can also give someone a smaller piece of
| transparency and see how they react if you think the
| employee could be someone with the skill set to manage a
| budget in the future.
| Ken_At_EM wrote:
| We have plenty of money in the bank and our company is
| profitable. I've employed over 100 people during our 13
| years of business. Not once have I ever had an employee
| say "hey man, I noticed you guys have more than the bare
| minimum level of working capital in the bank! How about
| you give me some?" Never.
|
| If you were telling everyone you were broke, asking them
| to believe in the mission and endure low pay for the
| cause, and then it leaks out that you have plenty of
| cash, then yeah, I can see this question coming up.
| sasquatch69 wrote:
| They don't frame it as "hey man, I noticed you guys have
| more than the bare minimum level of working capital in
| the bank! How about you give me some?"
|
| It's a "coincidence" that occurs a short time period
| after seeing the information.
| sasquatch69 wrote:
| My team is all well compensated, above top 5 US metro
| average, full remote and all highly technical.
|
| It's surprising to me that out of 100 people no one asked
| for a raise after seeing a pool of money, although
| there's a lot of industries and types of employees out
| there.
|
| It's a smart thing to do from the employee perspective--
| I would do the same in their shoes, I don't hold it
| against them, I'm actually a big fan of ambitious
| employees, and I've granted their requests (maybe not the
| full value of their ask, but at least part) every time.
|
| Your mileage may vary.
| Ken_At_EM wrote:
| I just don't understand that point of view.
|
| Why aren't employees at Apple asking for a piece of their
| massive cash horde?
|
| If the only thing keeping an employee from asking or
| demanding they be given some of the companies property is
| the knowledge that property exists then you probably
| don't want them in your company.
| sanderjd wrote:
| I don't relate to this. It seems like there may be a lack
| of understanding of or alignment on the long term path if
| this is a problem. I'm at a very transparent fairly early
| stage company right now and when I see how much money we
| have in the bank, I think "that's great news for our
| roadmap and long term path to profitability or further
| investment", not "how can I get me more of that sweet
| cash".
| sasquatch69 wrote:
| My company would widely be considered as stable, I'm
| personally 100% long term on our company. So it's past
| the "great news for our roadmap and long term path to
| profitability or further investment" phase. Although
| we're not massive either (few mil, rapid growth). Also
| bootstrapped from $300, so I could see it being different
| for venture funded situations.
|
| Different companies/team compositions might have
| different best paths.
|
| It's more "why are you hiring someone, when you could
| give everyone a bigger bonus" vibes. Where my goal is to
| say, give 2x the bonus in the future via the hire
| instead, but an employee could justifiably, for their own
| reasons, want more money today.
|
| I'm saying that^ in the context, of, in my opinion, big
| picture employees as well.
|
| I agree there's sometimes misalignment, everyone has
| their own goals/aspirations/career, and they sometimes
| aren't the same as the company goal/timeline. At the end
| of the day, that doesn't mean that they aren't capable of
| making valuable contributions or that we don't want to
| support their goals. That is ok, it's impossible to be
| everyone's everything.
| majormajor wrote:
| Sometimes "the full version might be confusing" is the same
| as "I haven't done a good job of explaining the full
| version," whether that's the roadmap for a company or a
| department or even just a team.
| mhh__ wrote:
| If they're confused you've hired the wrong people
| drewcoo wrote:
| > If they're confused you've hired the wrong people
|
| If they think their people will be confused, they don't
| trust their people.
|
| That's not necessarily the same thing as hiring the wrong
| people.
| IshKebab wrote:
| You obviously don't have to force people to care about it.
| Just share the information. They can ignore it if they like.
| I have no idea why you think anyone would find this sort of
| information confusing.
| LadyCailin wrote:
| Yeah, this is an extremely weird take.
| fredophile wrote:
| In my experience, people that actively don't want full info
| are usually not the same people who are interested in being
| early employees at a startup.
| squeaky-clean wrote:
| > knowing the full version might be confusing to people
| working on today's stuff.
|
| Are those really the sort of people you want joining your <10
| member startup?
| Ken_At_EM wrote:
| Yeah, I'd agree with you and say absolutely not.
| darkerside wrote:
| With a bigger company, you need to manage communications.
| This is a huge tax to pay. Defer it as long as possible.
| nibbleshifter wrote:
| > You may find yourself delighted in finding that many of your
| team can see and solve problems that you may have missed.
|
| This is something a lot of founders seem to overlook.
|
| Also, along with spotting problems - people who are engaged in
| a transparent org can more easily spot unexploited
| opportunities and bring them to the table.
| tcgv wrote:
| While I agree on the benefits of sharing information and always
| being transparent, one should be mindful on how to communicate
| strategic and sensitive information internally, specially with
| regard to junior staff:
|
| - Avoid generating too much expectation, which can lead to
| frustration if things don't materialize, and impact team
| morale.
|
| - Always provide context so the team can better understand
| how/why events took place and decisions were made.
|
| - Think preemptively, put yourself into your team shoes, and
| try to address doubts that may arise from your communication
| upfront.
|
| - Always give space for clearing doubts, and follow up to your
| staff to assess the impact of your communication. You'd be
| surprised in how many ways people can react to the same
| information.
|
| With time, you get to better know your team, build trust, and
| become more effective communicating with them.
| SnowHill9902 wrote:
| Great way to have leaks and create lousy hygiene around
| information security. Culture is most difficult to revert then.
| The default should always be on a need-to-know basis. Anything
| else should be justified.
| outside1234 wrote:
| There are very few startups that need to be in "stealth
| mode". If anything, startups need to be more vocal to get
| themselves on the map and to do way way more customer
| development.
| Ken_At_EM wrote:
| I agree with you, I only remember, maybe once thinking that
| "yeah, those guys needed to be in stealth mode, that makes
| sense"
|
| I think anyone who credits stealth mode with their success
| probably doesn't realize they would very likely have also
| been successful without it.
| SnowHill9902 wrote:
| Ok sure. Better for me - weak competitors.
| Ken_At_EM wrote:
| What would make a competitor weak, exactly?
| WaitWaitWha wrote:
| Are you sure, specially in easily copied technology
| domains?
|
| In my experience, software, business processes, and
| hardware are best kept close to the vest until sufficient
| momentum and maybe market saturation is reached.
|
| It does not matter if the item holds a
| copyright/patent/trade mark; they are post even re-active
| solutions. It's like an ambulance after a car crash.
| Excellent if there are good doctors in the ambulance, but
| better the avoid the car crash all together.
| Ken_At_EM wrote:
| Please provide examples of "easily copyable technology."
|
| Putting together a team of competent engineers,
| developers, etc and having them create something
| meaningful is hard enough as it is. Trying to copy
| someone else's tech doesn't lower the bar all that much.
| robertlagrant wrote:
| This is justifying it.
| Ken_At_EM wrote:
| Couldn't disagree with you more.
| SnowHill9902 wrote:
| SnowHill9902 wrote:
| A good leader is like a strict but loving parent. If you model
| yourself around that, you'll know the answer.
| sergiotapia wrote:
| Your first 10 employees are make or break. Tell them everything.
| caseysoftware wrote:
| Sharing the current state of things is good. It will be stressful
| (for everyone) at times but at 7 people, they're invested
| personally and professionally.
|
| Sharing things that are in-progress is harder. I'd recommend
| attaching timelines and probabilities. Basically saying "this
| should happen in the next X days" and "we're trying this idea, it
| may not work but we'll know in roughly Y days."
|
| There are two huge upsides to a small, tight team:
|
| a) there are LOTS of decisions made every day in every area. If
| people know what else is going on, they should be able to make
| better decisions. aka "This doesn't make sense to do for one
| customer.. but if there are 4 others in the pipeline, it's way
| more compelling."
|
| b) people with varying strengths and areas of focus will not have
| your blindspots and perspectives and will see/understand things
| that you don't. Lean into that and you'll get a better solution.
|
| _Background: I was employee ~25 at Twilio, launched Okta 's API
| security product, and am currently employee ~20 at ngrok._
| NonEUCitizen wrote:
| You're a fintech startup. Your employees have already formed
| their own financial models of your company, and if you do not
| share info, they will plug in their own worst-case estimates, and
| leave if their models show bad numbers.
| malikNF wrote:
| Most up-voted comments seem to be of the opinion that companies
| should be fully open with their employees. Most companies I have
| seen do the opposite, they control information to a need to know
| basis. May be it's a result of where I am coming from.
|
| Would be really grateful if anyone would share a list of
| companies that are fully open with their employees?
| Strom wrote:
| I don't know about _fully open_ , but I think Buffer is an
| example of a company that shares unusually much.
| https://buffer.com/resources/revenue-dashboard/
|
| There's some sort of list at https://openstartup.tm/ but I
| think a lot of companies listed there are open with only select
| pieces of info.
|
| Both of these are about public sharing though. Employee sharing
| is trickier to know from the outside. Perhaps Valve Software
| because of the lack of hierarchy?
| jdblair wrote:
| You should share enough context that your employees have a good
| grasp of business goals and can shape and prioritize their own
| work to build value. You won't think of everything and you don't
| want to spend your time tracking all their work - they need to be
| able to make independent decisions that further your business.
| enra wrote:
| I'd default to transparency and share things that can be useful
| for people to know, consider not sharing things that can be
| distracting.
|
| Customer or partnership deals can be useful to share because the
| team can help with those but talking about future fundraising
| might be just distracting and the team might not be able to do
| anything.
|
| We do monthly business review with the whole company (25ppl now),
| going through growth, revenue, cash flow, customers etc.
| [deleted]
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