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Ask HN: How much info should founders share with early stage employees?

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Re: Ask HN: How much info should founders share with early stage employees?

#71
At Stream with our team of 140 I like to share runway, burn, cash balance, revenue, burn multiple and CAC payback.

Historically Stream has grown rapidly and the equity grants have been very significant compared to the base salaries. (who knows what the future brings, but hopefully that trend continues).

So a significant part of our team's compensation is equity, I think it's only fair to be transparent about those topics. Also important to share the last round valuation and the revenue, since many startups that raised at too high prices are currently deeply underwater on their employee's equity.

We do lunch and learns on equity, evaluating startups etc. That is important since most people don't have prior experience with evaluating startups.

A friend of mine didn't exercise his stock options when he was early stage at a company that had an exit above 1B. I think that shows how hard it is to evaluate how startups are doing. But sharing the data is a good starting point.

Re: Ask HN: How much info should founders share with early stage employees?

#73

Share it all. Complete transparency. Show them the cash flow. At your small size you will benefit from the additional trust and alignment this will bring. You may find yourself delighted in finding that many of your team can see and solve problems that you may have missed. You can be super secretive to combat the BigCo mentality like Apple when you have the first class problem of being a BigCo.

Great way to have leaks and create lousy hygiene around information security. Culture is most difficult to revert then. The default should always be on a need-to-know basis. Anything else should be justified.

Re: Ask HN: How much info should founders share with early stage employees?

#74

Share it all. Complete transparency. Show them the cash flow. At your small size you will benefit from the additional trust and alignment this will bring. You may find yourself delighted in finding that many of your team can see and solve problems that you may have missed. You can be super secretive to combat the BigCo mentality like Apple when you have the first class problem of being a BigCo.

Great way to have leaks and create lousy hygiene around information security. Culture is most difficult to revert then. The default should always be on a need-to-know basis. Anything else should be justified.

There are very few startups that need to be in “stealth mode”. If anything, startups need to be more vocal to get themselves on the map and to do way way more customer development.

Re: Ask HN: How much info should founders share with early stage employees?

#75

Earlier quoted context omitted.

I rarely find the "people will be confused by full transparency" line very convincing. To me it seems like there is some other, unstated reason to be less transparent - because confusion is easily remedied by prioritizing certain information while making the rest just accessible if someone wants to look.

I also used to think this way, until I tried being fully transparent with my team. There really are people whose mindset is 100% "what should I do?" and never "what are we doing?" I think the mistake is assuming it correlates with seniority or skill or something; it seems to be independent of both. On the other hand, I'd never want a "what should I do?" person as an early startup hire.

> On the other hand, I'd never want a "what should I do?" person as an early startup hire.

This doesn't apply to tanks or healers, only dps. Playing tank as an infra person I would do my team a disservice if I didn't make myself available on a dime to unblock my team. Big picture is fine for the planning meetings but on small teams I'm usually the only one, I have a bunch of cooldowns to keep track of, and don't always have the context because I have a separate workstream that has to telegraph out ahead of the dev work.

I am always asking what I should do that has the most impact for my devs.

Re: Ask HN: How much info should founders share with early stage employees?

#76
What role do you want these early stage employees to have?

If you hide everything, that is consistent with having an unprivileged role at a risky enterprise where the employee should justly assume the worst - e.g. that the only compensation that is real is one that is cash-in-pocket, and that the job can end at any moment, as the company might be dead in the water, out of the runway already. That's not necessarily an obstacle, but that requires paying some premium (in cash, not equity) to justify these risks.

If you're open and trust the employees with realistic financial information, then the employees can trust the future of the company, to the extent that the information actually supports the notion that the future is there and not faked for pure PR.

Re: Ask HN: How much info should founders share with early stage employees?

#77
When you write "employee", what role is the employee in? Do they need to know so they can make good business and life choices? If not, it is just burdening them.

I definitely think that CxOs need to be aware of most of the things. I recently was asked to join a start-up in the C-suite, but had to turn it down. Too coy with details for my taste. If you trust me enough to invite me to take care of mission critical elements, do not hide things from me.

But, there is such a thing as over-sharing. Not every role is mission critical. If the role does not need the information to make business decisions there is no reason the share, in my opinion.

>Should I share info on upcoming behind-the-scenes partnerships, etc with employees to pump them up?

Will it directly impact their work? If so, share it with them. If not, what is "pump them up" mean? Are you looking for a Steven Ballmer presentation reaction?

I will presume you have an NDA and non-compete with all of your employees.

Re: Ask HN: How much info should founders share with early stage employees?

#78

Share it all. Complete transparency. Show them the cash flow. At your small size you will benefit from the additional trust and alignment this will bring. You may find yourself delighted in finding that many of your team can see and solve problems that you may have missed. You can be super secretive to combat the BigCo mentality like Apple when you have the first class problem of being a BigCo.

Great way to have leaks and create lousy hygiene around information security. Culture is most difficult to revert then. The default should always be on a need-to-know basis. Anything else should be justified.

This is justifying it.

Re: Ask HN: How much info should founders share with early stage employees?

#79
Confidentiality should be agreed on in a sane manner.

That said - full strategic insight into the vision and what‘s done to achieve it and welcoming input will engage employees in a very productive way, but requires free flow of information.

Usually, the benefits outweight the problems _by far_.

Re: Ask HN: How much info should founders share with early stage employees?

#80

Earlier quoted context omitted.

I rarely find the "people will be confused by full transparency" line very convincing. To me it seems like there is some other, unstated reason to be less transparent - because confusion is easily remedied by prioritizing certain information while making the rest just accessible if someone wants to look.

I also used to think this way, until I tried being fully transparent with my team. There really are people whose mindset is 100% "what should I do?" and never "what are we doing?" I think the mistake is assuming it correlates with seniority or skill or something; it seems to be independent of both. On the other hand, I'd never want a "what should I do?" person as an early startup hire.

I'm not sure what distinction you're trying to make between "what should I do" and "what are we doing". Are you talking about people making decisions that prioritize themselves over the company? People not being willing to go along with existing decisions? Big picture vs small picture? Something else?
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