Profit-sharing

Profit-sharing is a fun topic, but I want to take a look at a different meaning of the phrase.  Rather than look at the process of distributing a portion of a company's profit to involved parties, I want to look at the idea of publicly, transparently sharing internal company data on profit, revenue, and expenses.

Of course publicly traded companies do so, but there are a different set of considerations for a small, private company.

For starters, there's a generally-accepted rule that you don't share what you don't have to.  Keep your cards close to your chest.  Why hang yourself?  As Aaron Burr says in the hit Broadway show "Hamilton":

I learned this lesson myself at my previous job.  When a rift developed between two factions of management, there were a lot of words expended in accusations, arguments, and attempts to convert employees to their side.  What I quickly discovered was that it didn't matter what someone said--it would be interpreted a predetermined way by their opponent.

Side A: "I love puppies."
Side B: "Did you hear that?!  Side A hates kittens!"

What isn't said, can't be misinterpreted.  Often, the safest course is often to say nothing at all.

However, as both Aaron Burr and Johnny Tightlips discovered, there are repercussions to being opaque, usually involving someone getting shot.  Fortunately we avoided that outcome at my previous job, but it did cause my partner and I to have a deeper conversation about whether we wanted to share our company financials with the broader world.

Would we get robbed?  Would our company be denigrated?  Would a customer or partner refuse to do business with us because our numbers revealed that we were "smaller" than they were comfortable with?  Would our finances or lack thereof give leverage to the opposition in a negotiation scenario?  Would our money-laundering operation be exposed?

When you're a small company, you're already living closed to the edge and anything can tip you over. You don't make many decisions lightly.  In the end, however, we decided to publicly share our revenue because quite frankly, it was data that we would find valuable if provided by someone else.  Honest, live numbers from startups are hard to come by, particularly an unsplashy startup like our own that didn't start with $100M in venture capital and an established PR machine.  We're doing this the hard way: living on cold stewed beets, hunting a niche to work in, slogging through development, painstakingly building a customer base.

Our hope is that our numbers provide context, and maybe even hope for someone else.  "Oh, not every startup strikes it rich or wins the lottery?  Good, then I don't feel so bad.  If they did it, I can keep doing it too."

And if nothing else, maybe our numbers simply provide a little amusement!