Challenging the ‘Fake It Till You Make It’ startup mantra, we take a full-frontal look at complete transparency in startups. From illusion to the naked truth, warts and all…
Before: The Emperor’s New Clothes
You’ve heard the fable about The Emperor’s New Clothes? Here’s a quick recap:
Once upon a time, there was an emperor who was obsessed with 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 ends up parading naked in front of his subjects. Everyone plays along, 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 that he’s publicly embarrassed himself.
The lesson? 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 the technology never really working as promised. When the truth about Theranos came out, she went to 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 an inflated sense of power clouds judgment, leading to abstractions that alienate and repulse the public. What seems groundbreaking to the “emperor”, isn’t seen as valuable, 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 present – startups paint a picture of a future reality that doesn’t exist yet.
Scam Culture
We’ve seen too many corporate scandals and startup swindles, exposing the grim reality of deception and fraud. We’ve lost faith in political and corporate governance with corruption and misconduct coming to light.
No matter how well-hidden, the truth has a way of coming out.
Sales Shtick
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… real recognizes real.
But no one 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.
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.
Here’s how our founder, Lauren Wallett is doing that for Creatrix on TikTok. She started with the idea, months before any team was assembled and software was built.
She shares her life as a solo founder and has over thirty-eight thousand people on TikTok following her journey.
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.
