startup ethics and culture

Startups : Would You Be This Transparent? [Open Salaries]

In Entrepreneurship by Ashish Sinha

At the recently held UnPluggd, one of the speakers (Nikhil, founder of TintUp) mentioned a very interesting aspect of the company culture – everybody in the team knows the company bank balance (ofcourse, revenue) and importantly, each other’s salary details.

This not just brings openness in the team, but also smacks down all specualations/comparisons in the company (yours is bigger than mine?).

Buffer, the social media startup has gone ahead and the company not just publishes (monthly) its revenue/traction numbers publicly, but has also published salary details of each employee (link).

Transparency breeds trust, and that’s one of the key reasons for us to place such a high importance on it. Open Salaries are a step towards the ultimate goal of Buffer being a completely “Open Company”.

Why do you need an Open Company? 

“In Silicon Valley, there’s a culture of people jumping from one place to the next. That’s why we focus on culture. Doing it this way means we can grow just as fast—if not faster—than doing it the ‘normal’ cutthroat way. We’re putting oil into the engine to make sure everything can work smoothly so we can just shoot ahead and that’s what we’re starting to see.” [Buffer CEO,Joel Gascoigne/source]

Open Salary Structure @Buffer

Open Salary Structure @Buffer

Case for Transparency?

Does being transparent help improve team’s confidence/trust in the company? Maybe yes. But sharing everything has it’s own challenges. Investor, Mark Suster shares an interesting story here:

I worked with a startup CEO who decided he wanted to sell his company. I wasn’t in favor but when the CEO decides it’s the right thing to do you support him. So he went on the road and talked to many acquirers. He told his entire team what was going on. There are an obvious excitement around the office.

We decided not to sell.

His entire team knew about the process and that we didn’t sell. So the tech team departed en masse to find the next great stock option scheme to make their big bucks. [link]

Is transparency bad for startups? How transparent should the founders be, given that business is struggling for survival (especially in early days)? Hiding (bad news/information) creates a culture of distrust, for sure. Maybe the important question is if your team members cannot handle a negative news, they anyways can’t live through it.

Importantly, is transparency a function of founding team’s confidence?

What has been your experience? We’d love to hear from startup founders and team members.