Financial transparency drives business results
When solo developer Peldi Guilizzoni launched web design mock-up tool Balsamiq in July, he promised to disclose his revenues, reports ReadWriteWeb.
He has just announced he has hit $100,000 in revenue in the last five months, with revenue on a very significant uptrend.
I am a big believer in business transparency, absolutely for public companies, and also in many cases for private companies. Transparency is one of the Seven MegaTrends of professional services I described in 2005, one of the Six Facets of the future of PR, central to investor relations, while the naked start-up is becoming more common.
Clearly Guilizzoni is going to make a lot more money because of his financial transparency, given the attention it’s attracting.
Secrecy has its place in business, but it is highly over-rated. In most cases there is no valid reason not to share information, just a disinclination to give away things. We are going to see transparent models increasingly favored moving forward. Certainly I find the reporting and accounts of many public companies to be extraordinarily opaque, giving little insight into the real drivers of business performance (a case in point being most non-US media companies). The most significant result is that investors shy away and shareholder value is lost.
‘Open book management’ is not a new idea, but the majority of companies are slow to shift on this front. I’m toying with the idea of a business model which includes publishing all company accounts on the web – hopefully this will be becoming more common by the time I get to this.