Money December 10, 2019

Why bootstrapped businesses stop sharing their public revenue data eventually

Arvid Kahl @arvidkahl

Last week, I was looking into startups sharing their revenue numbers publicly as part of the research for my weekly newsletter. I had just heard about how had recently stopped sharing their revenue numbers with the public. It made me look into the all-time hero of open revenue data, Buffer, only to find that they also stopped sharing their revenue details.

So what is going on there?

Turns out there is a time when open revenue is great, and a time when it's not. It appears that in the beginning, the benefits of sharing this kind of information is incredibly high: it positions your business as an honest, small but aspiring, and transparent company. That builds a lot of trust. People love the underdog.

At some point, many companies who benefitted from this start looking at this kind of transparency as a risk. There are just too many eyes on their data. Not only does the competition see their numbers in great detail, but they also get to do so without sharing their own. At a certain point, transparent revenue turns into a one-side information advantage that you freely gift to any existing or would-be competition.

And that's when companies stop being transparent.

I've written at length about this on my blog at Too Many Eyes: Why Bootstrapped Companies Stop Being Transparent (Eventually) and of course in last week's newsletter.

I've heard from many indie hackers that they'd love to share, but are afraid of these unforeseen consequences. What's your opinion? Worth the risk? Breaking new ground?

  1. 9

    Your analysis I think is 100% on point. As long as you can use it to your advantage do it, once it starts becoming a liability, don't do it.

    1. 2

      Agreed. Honestly probably the approach I'll be taking.

    2. 1

      When would it become a liability for you?

      1. 2

        each case is different and requires good judgement on the "CEO's" part.

        1. 1


          For me, it would be sharing subscription levels and enabling competitors to interpret the impact of pricing changes. These are such painful lessons, I would not share those for free for others to just copy.

  2. 4

    Well said! You articulated a lot of our rationale for shutting off transparent metrics at Transistor. 👍

    The biggest reason we stopped was definitely competition. It was becoming increasingly uncomfortable. We knew our competitors were checking out our numbers, and that didn't sit right with us. Having them know so many of our details, when we know nothing about theirs, was a disadvantage for us.

    We loved being able to share our journey, and give other folks a picture of what it's like to build a SaaS in 2019. But it was definitely time to turn it off.

    1. 2

      Thanks Justin, glad to hear I understood you correctly.

      There really seems to be a sweet-spot for transparent metrics. At some level of maturity (which I assume is dictated more by being established in a market than the age of a business), the benefits seem to show diminishing returns for everyone who does this.

      But I still applaud you (and the Buffers of this world) for doing it in the first place. With FeedbackPanda, we really only ever had out (Stripe-verified) revenue visible here on IH. It seems that was one of the reasons people started reaching out to us with offers to buy the business. Certainly helped with that :D

  3. 4

    I guess it's because people tend to root for the underdog, someone they can identify with and at one point you stop being that person/character.

    I believe there are businesses where sharing your numbers is beneficial, especially in the area where you're providing education services, or coaching, since many of the people you help want to be "like you" in some way, and having your revenue on display makes everything more tangible and appealing.

  4. 2

    I feel the same on Indie Hackers. I'm not too sure I want to share my financials in the open. My main concern is our clients or our competitors knowing the figures. Although on the B2B rating company Clutch. You can see the cost of the projects and clients we work with - That of course is super transparent and gives potential new clients an idea of how much we charge.

    1. 1

      I wonder how you can avoid being too transparent when you also try to be public about your prices and projects to attract new clients. How do you balance the risks here?

      1. 2

        You'll see on the clutch site most companies put in their hourly rate. We don't work off hourly rates. The only thing we've said is that projects start at $10k. It's more of a deterrent than anything else.

        1. 1

          Makes perfect sense. Thanks!

  5. 2

    I have expressed my opinion on the topic multiples times here.

    I would never share my numbers. You are right on the money about the cons, but I just can't see the pros.

    I don't believe that people will buy a product just because they know how much money you are making. It doesn't make any sense. And you can be transparent about your plans, strategies, and feelings without giving your numbers.

    Another thing that you should consider is envy. It can feel good to support the underdog who dreams to make a living with his little project. But what happens when the underdog with his silly dream starts making more that those supporters do?

    1. 4

      That's a valid point. It does require some sense of vulnerability.

      But regardless of envy, showing your numbers as an "underdog" is part of a storytelling effort. It can help with building an audience and fanbase that wants to see you succeed. Having that dedicated audience early on could be pretty useful later on.

      1. 3

        I agree it's a valid strategy to build a "trustworthy" brand and a loyal audience that is interested in your success, for whatever reason. And I would also want to add that it is very risky if you don't know how to deal with that audience.

        In the end, it's a self-marketing effort that works best when you are selling to customers that care about bootstrapped SaaS insights - which are likely bootstrapped founders themselves. Won't really be a good idea in competitive enterprise SaaS. Might work in founder tooling.

        1. 3

          I agree with your last point.

          I think that has ascended beyond their initial indie hacker audience and have garnered attention from big players in the podcasting space. So it makes sense that they don't reveal their cards.

  6. 1

    It's interesting topic and I noticed baremetrics, who was also a pioneer in the "open startup movement" also no longer shares their dashboard.

    edit:// nevermind it's open still. Last time I looked the link didn't work.

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