How Much Transparency is Good for Start-ups?

Here’s the question of this week, along with our answer:

“Non disclosure agreements, half hinted at products, having nothing but hype to report at networking events… Secrecy can be a real hassle sometimes! So in this day and age of open sourcing, blogging and social networking, is it really necessary? Have you seen someone fail because of too much disclosure or secrecy?”

In my experience, only a few senior execs and business owners actively evaluate this question – so its interesting that you asked. I can give some specifics for internet business ventures, which we can be applied to other information technology intensive indutries too, like life sciences and financial services.

If you break down your business into the 3 core parts:

—> SUPPLY (talent sourcing, constituent software products)
—> PRODUCTION (training techniques, development methods, etc)
—> DEMAND (website, user management, etc)

From a business perspective, share whatever is required by DEMAND side (through blogs, ads, etc), but most clients are not interested in your SUPPLY and PRODUCTION details, and you should not share it.

So if someone asks, please check their motive. NDAs may or may not help. For a start-up, the only people who need to know all details are the investors.

But in many start-ups and even established companies, we find that the PRODUCTION or SUPPLY details are revealed, knowingly or unknowingly, in some document or interview, and the Competitors are happy to use it to sell against your company and you won’t know about it.

So, you should prepare a list of information items coming out from your business, and write who the required audience should be, and share that with the leaders of your ventures. Let’s treat information as an asset right from the start, and put the right flows and controls.

Thanks/Shankar