An open startup is when a company / indie business decides to publish the metrics which it tracks as part of the business.
The aim of doing so is to build trust among its users and audience by being transparent. This causes the audience and users to be more invested in the business and more likely to use the business's products in the future.
This trend builds on the culture of transparency which has been trending in recent years. Examples of this would be Everlane in the fashion space or Bannerbear in the technology software space.
While some companies may prefer being in stealth mode (not revealing anything about their startup until launch), there is an increasing trend to actively revealing the process of building a startup as shown by the build-in-public movement.
The main resistance to this movement would be the argument that competitors would be able to swoop in and take advantage of your plans, or that if everyone knew about how lucrative your business is, it would invite increased competition.
However, this is likely not the case.
Competitors would have their own goals, vision, and logic behind their decisions and would be unlikely to solely focus on copying your product. At the same time, there is nothing to stop competitors from copying it once you have launched your feature. Case in point, not being open did nothing to help Snapchat against Instagram Stories.
On the point of increasing competition, it is also unlikely as what future entrants will see from an open startup is:
1) If you have a large amount of revenue, that there is already a large competitor in the market (you) making it a difficult market to enter
2) If you have a small amount of revenue, that the market is too small that they would be fighting for scraps making it not worth it.
Lastly, it is important to note that being an Open Startup is a reversible decision.
In the beginning, you can choose to be an open startup and then decide to remove access to more sensitive metrics in the future.
In the end, you as the business owner will remain in control of what information you do and do not share.
Why it is important:
When you first begin your business, most people are not going to care about or pay attention to your business.
By sharing these metrics and being transparent about the process of building your business, you can get initial traction and interest.
This will also help to build trust with your initial audience and make them more likely to purchase your product or service down the line.
At the same time, by openly showing your metrics and progress, you can speed up the feedback loop by getting more eyes on your data.
As a solo or indie founder, you might not have the luxury of working with a team and getting different points of view on your data. By being an open startup, you can solicit this feedback from your fans who have followed you throughout your journey.
Related topics I will cover in future weeks:
Building in Public
North Star Metric
Further reading from around the internet
Instatus Open Startup [Example] - Instatus is an open startup sharing their metric, tech stack, and uptime status. They are in an earlier stage as compared to Bannerbear so checking it out serves as a nice comparison.
Failory Open Startup [Example] - Failory is an example of an open startup which uses access to information as a customer acquisition method. They do so by stating that the monthly reports are available via their newsletter and this prompts interested parties to subscribe.
Bannerbear Open Startup [Example] - Jon Yongfook is the founder of Bannerbear and he has made Bannerbear an open startup. Here you can see an example of his current MRR and how he contextualizes it in terms of his dream bike.
Just some cool things
Open Startups on Baremetrics [Directory] - This directory by Baremetrics allows their users to share their metrics and the public to get a sneak peek of the metrics of companies in a range of stages from $2M MRR to $500 MRR.
Vanity metrics [Article] - Showing your metrics is all well and good, but how do we know we are monitoring and selecting the correct metrics? This article by Julian goes in-depth about how to ensure the things we measure are what matters for our business.
Some quotes to get you through the week
Here are some startup quotes I've illustrated to keep you motivated through the week ahead!
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