Silicon Valley is locked in a perpetual identity crisis.
On one side, there are young, hungry startups who are willing to try new things, take more risks, and fail faster.
Then there are the more established corporate companies…who began as those strappy nerds in their parents garage and now control vast tracts of the internet.
Once upon a time, they swore to not be evil. But once you get to a certain size, it’s hard not to try whatever it takes to stay on top.
Transparency has become such a buzzword in the startup world. But it doesn’t change the fact that people employing this brutal honesty are on a mission to revolutionize the way Silicon Valley talks about itself.
So in these competing dichotomies, who’s right? Should companies be open and forthcoming with their information? Or is the secrecy larger businesses covet inevitable?
Companies that attempt cover-ups lose face – and money
As long as there have been mistakes business, someone has been trying to cover them up.
Back in 1994, a known issue with an Intel micro chip failure cost the company $475 million. The worst part was they knew about the failed micro chip, and the trust they lost took years to rebuild. And trust is expensive – gaining a new customer’s trust is 7x more expensive than retaining a current customer.
Some companies do slightly better job of hiding their tracks. But BP had a harder time with that, since their tracks were dripping with oil from the 2010 gulf of Mexico spill. The massive company was hit with a $4.5 billion fine for lying to Congress about what caused the spill.
Then again, honesty has never been the forte of the oil industry.
Realistically, the reason there’s no shortage of companies who’ve botched cover-ups is because there’s no shortage of people who refuse to take responsibility for their actions. With corporations being effectively treated as people, it can be hard to know who to trust.
But even in the face of a potentially disastrous PR nightmare, cover-ups continue to be prevalent, and that desire to avoid failure filters into our lives as individuals, too.
However, there is a clear alternative – and even though the thought of it might initially make you cringe. But there are too many benefits to maintaining transparency to ignore. Many of them are deeply rooted in the principles of human psychology, and this leaves you with an incredible opportunity to stand out from everyone else swimming in a sea of truthiness.
The Golden Rule is unavoidable
Robert Cialdini’s Influence is a marketing classic for a reason. His principles of persuasion are highly relevant to the work of anyone in business – and most importantly, they work. In particular, the principle of reciprocity is closely tied to transparency.
Reciprocity is a simple concept to understand – when someone gives you something, you instinctively want to give back. This desire is something you can tap into in a simple way. For example, when you ask a lead for an email in exchange for an ebook. But if you look at this idea more closely, there’s more there.
When you tap into reciprocity, you’re tapping into the Golden Rule. I’m treating you the way you’d want to be treated in advance.
When it comes to transparency, this translates into being open-handed and honest – whether that means keeping your customers informed about a bug that’s causing them grief, or realizing you overshot deliverables you promised a client in a given time frame.
And when you showcase that kind of transparency, your customer is instinctively inclined to respond in kind. They’ll be more patient while you figure it out and solve the problem to better meet their needs.
Transparency doesn’t just help your customer. It helps you make better promises – and better asks.
In Amanda Palmer’s The Art of Asking, Palmer explores her previous career as a living statue as a way of perfecting the ask. She would stand on her milk crate in costume, and when someone would drop a dollar in her jar, she’d hand them a flower in return and gaze into their eyes, saying silently, “Thank you. I see you. I love you.”
It’s a powerful gesture, and the implications are even more so. When we’re presented with honesty and openness, we want to give that in return. That’s vulnerability. And it’s something worth cultivating with your audience because of what results.
Transparency is the key to trust
What would happen if you were completely open about your company – down to your revenue, what you pay your employees, the money stuff that makes us all so uncomfortable? There are companies discovering exactly what the answer to that question is.
Baremetrics’s open startups page is nothing more than how many customers a company has, and how much money they’re making. But sharing that info? It goes against the secrecy rampant in so many circles in the valley, where VCs bank on hot tips and startup CEOs vie for their attention, praying they have enough of whatever metric that VC desires.
Trust paves the way for collaboration
There’s one final benefit that I believe is worth mentioning, and that’s that more trust leads to more collaboration. When companies are forthcoming with information, that same reciprocity can be exercised. We can trust our integration partners to support us, to help fight for our cause.
We might even be able to take the risk of trusting our competition, because we can see what they’re doing, too. And since it’s probably not what we’re doing, there’s room for both of us at the table.
Call me naive, but I believe there’s enough pie for everyone. They just have to find the right pie to take a piece of.
Remember, you can always come clean with your mistake. You can’t always apologize enough after a lie comes out.