This naked truth is for future empire builders. Challenging the ‘Fake It Till You Make It’ startup mantra, we take a full-frontal look at complete transparency in startups. We rival the ruling status quo and offer an alternative from illusion to authenticity, warts and all…
Before: The Emperor’s New Clothes Fable
Once upon a time, there was an emperor who was obsessed with new clothing trends and fads. Two swindlers convinced him they could weave the most magnificent fabric imaginable – a cloth so unique that it was invisible to anyone unworthy or stupid. The emperor, consumed by his vanity and desire for this exceptional garment that no one else had, ends up parading naked in front of his subjects. Everyone plays along with the ruse, pretending he’s fully dressed – to avoid being labeled unworthy or stupid. Except a small child, who sees reality as it truly is. He points out the truth: “But he isn’t wearing anything at all!” To the emperors shock and horror, he realizes he’s fallen prey to a trick and has publicly embarrassed himself.
This tale, known as “The Emperor’s New Clothes,” teaches us a vital lesson in startups: pretending to be something we’re not can lead to embarrassment, public scrutiny, financial loss, damage to our reputation, and potentially, the collapse of our venture / empire.
3 Embarrassing Emperor Examples
Elizabeth Holmes, the founder of Theranos, promised a revolutionary technology that could run comprehensive tests from just a few drops of blood. But this turned out to be a farce, with the technology never really working as promised. She was left exposed” when the truth about Theranos came out, leading to her prison sentence for defrauding investors.
Adam Neumann, the co-founder of WeWork attracted huge investments, but when the company filed for an IPO in 2019, the public got a look at WeWork’s financials and culture. The scrutiny revealed massive losses, questionable deals involving Neumann, and a chaotic, unsustainable culture. This led to a dramatic fall in WeWork’s valuation, a postponed IPO, and Neumann getting ousted.
Elon Musk, with his Twitter acquisition and name change to X, shows how one’s inflated sense of power clouds judgement, leading to abstractions that alienate and repulse the public. What seems ground breaking to the “emperor”, isn’t seen as valuable, sensible or attractive to the public.
After: The New Emperors Approach
The problem is that because startups strive to present the best version of their future selves – ahead of time, they don’t always present reality as it is right now.
Part prophesy, part presence, startups hold a dual responsibility: present the future for all it could be while remaining honest about future reality’s challenges.
The best startup founders play both roles of the Emperor AND the young child. They make the rules based on the best possible outcome and reveal the truth of the current circumstance and situation.
On one hand, the startup could be a unicorn and on the other, it could totally fail.
Navigating the tension between the two polar opposites is the tightrope new Emperors must walk. And not just walk: perform with finesse and agility.
The Benefits Of Full-Frontal Transparency
- Building Trust: Full transparency creates an environment of trust between the company and its customers, employees, and stakeholders.
- Customer Loyalty: Customers tend to stay loyal to companies that are open and honest. Transparency fosters strong, long-term relationships.
- Improved Reputation: Transparency can enhance a company’s reputation, as it demonstrates integrity and authenticity.
- Better Decision Making: Transparency provides a clear view of what’s working and what isn’t. This allows for better decision making and aids in swift course correction.
- Increased Collaboration: With transparency, everyone has a clear understanding of the goals and the progress made, promoting collaboration and problem-solving.
- Risk Management: By being transparent, a company can address issues as they arise, preventing small problems from escalating into larger ones.
- Creating a Culture of Accountability: When everything is out in the open, it fosters a culture of accountability among the team.
- Employee Engagement: Transparency can lead to increased employee engagement and satisfaction, as employees feel more valued and involved in the company.
- Co-Creation: Transparency invites customers and other stakeholders into the creative process, enhancing the sense of ownership and connection, and potentially leading to innovative ideas and solutions.
- Attracting Investment: Investors are more likely to invest in a startup that practices transparency, as it gives them a clear understanding of the business operations, financials, and risks involved.
Walk The Talk
We’ve seen a slew of corporate scandals and startup swindles, exposing the grim reality of deception and fraud. Simultaneously, our faith in political governance has been tested, with numerous instances of corruption and misconduct coming to light. This steady stream of disheartening revelations has led to a pervasive sense of mistrust in many of our institutions and systems.
More than ever, that honesty really is the best policy. Transparency has emerged as a beacon of hope amid the fog of skepticism.
Being open and forthright about your actions not only cultivates trust but is also simply good business practice. To summarize the list above, it enhances your reputation, fosters loyalty among your customers, and attracts potential investors. And it prevents scandals and public backlash that follow deceit.
After all, no matter how well-hidden, the truth has a way of surfacing eventually. When transparency is your core strategy from the start, you have nothing to hide as you scale. When you’re not doing double duty, protecting lies, you can focus on the future.
Today’s consumers see through the sales shtick. So you’re doing your startup a disservice if you’re trying to disguise it as something it isn’t. People can tell and with the lightening speed of social media, they will tell each other. One lie could sink your startup in seconds.
If you’re going to get the public to buy in, let people see and experience for themselves the solutions you provide.
Step up your startup game by stripping down to the truth. No one else has the advantage of your truth. It can’t be stolen. It belongs to you.
Truth is a frequency and any investor with integrity will be attracted to the truth. The potential is obvious even when it’s not polished yet.
Spend less time on the polish, and more time on the truth.
Progress, Not Perfection
Share your progress, pivots, problems, process, and pitch practice! Share it all!
You’ll build up an audience ahead of time before you’re ready to sell.
She shares her life as a solo founder and has over thirty-eight thousand people on TikTok following her journey.
Ultimately, investors invest in people over products, so if they get to see that you show up the same online as you do professionally and as you do in your social life, they’ll trust you much faster. Transparency opens the door to fast connection.
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Tactical Tips For Transparency
The ultimate alternative business school, Create Business Academy, has a content strategy called: The Backstage Pass Strategy that shows you how to build your startup in public so that you attract your customers ahead of time. Get it here:
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