Why report in public?

Francis Pedraza
Jan 31, 2018 · 7 min read

From the outside-looking-in, I remember wondering why companies aren’t more transparent, even though “transparency” is a value of our age. Everyone’s talking about it, but nobody’s doing it.

Now that I’m in a position to do things differently, I see why it’s so hard to reveal everything. The real reason isn’t trade secrets: the fear that competitors will read what you publish, drop what they’re doing, and copy you — that’s a false compliment to self, which betrays a lack of genius. Brilliance can be hidden in plain sight, and even when it is recognized, it is difficult to copy. But a company, if it is brilliant, is dynamically so — by the time you copy it, it has moved on.

Genius fears no competition. It’s a wild thing. Genius — that is, the spirit. The generating spirit. A mystery even to those creating it, a company has a living essence — a genius — something that cannot be reduced to documentation. That genius animates that people building the company— but it can’t be possessed or stolen. It’s a silly fear.

It’s a silly fear that distracts us from the true risk. The true risk is that we fail to copy ourselves. What we’re doing, what we’re attempting to do, is so daring, so difficult, so… disruptive — that the true risk is that we won’t be able to do it at all. If someone else beats us to it, it will be a triumph for humanity and we will applaud! But the danger is that we fail, and where we fail, others won’t dare tread — discouraging a possibility from further exploration, merely by the warning of our example.

Why don’t companies report in public? The real reason is embarrassment. Embarrassment, shame and the fear of social judgement are overwhelmingly powerful human emotions which introduce systematic biases to our behavior patterns and can paralyze us — if we let them.

Nothing embarrassing needs to happen for public exposure to be embarrassing. Some people just can’t handle exposure. Exposure itself is embarrassing. They want to live in private. They don’t want to be on stage. They can’t handle the attention, the judgement that comes with observation, both the criticism and the glory — they don’t have thick skin.

Thick skin takes practice. The more you publish, the less sensitive you are to negative feedback, and the more you can appreciate the benefits of living in public. For over a year, I’ve practiced “putting my brain on paper” by publishing as much of my work as possible on Medium, saying what I think without filters on Facebook, and doing other experiments in transparency.

What I’ve learned is that, over time, you create what Heidegger called a “clearing” — you create a “clearing” for yourself. The more you publish, the more you have to work with. Thinking is naturally networked. It connects to itself. A single leap into the unknown might seem insane. But over time, you discover so much that relates to it that it can’t possibly be insane. There is a compounding advantage.

Another thing I’ve learned is to be comfortable with conflict. The more you express, the more surface area you expose. The more positions you take, the more ways there are to disagree with you. The more arguments you make, the more counter-arguments can be made. Instead of being afraid of, or resisting the dialectic, you have to embrace it and participate in it. I love debate and I argue with relish. Mental fencing is a sport and both parties benefit from the thrust and parry, the duck and roll. Both inside and outside Invisible, I’m looking for debate partners.

Lastly, I have been reminded of an ancient truth. Words have power. The power of Logos across time is tremendous, and indeed, words may be the only technology — and everything else an implication of words. So I have nothing to fear from words. And the truth has nothing to fear from a lie. The important thing is to participate in the seeking of truth through words. And if you stumble, remind yourself that sins of commission are morally superior to sins of omission.

Again, why don’t companies report in public? Fear of embarrassment. This holds them back from enjoying the tremendous benefits from operating and thinking in public.

Because of this overwhelming fear, a wall has been built between insiders and outsiders. The outsiders want to look in. The insiders want to control what the outsiders see. Investors ask for information. Companies give them a pitch deck.

Even the most complete investor materials don’t really capture the operating reality of a company. The only investors that really do their due diligence are hires. Hires see everything. The good, the bad and the ugly. And they keep showing up to work every day.

I love breaking walls. Fascinating things happen when borders become osmotic. The most public private company ever would accrue certain advantages over time. It would attract more talent, more advice, more clients, more investors, more press — more of everything — and all of it would be more aligned.

Information wants to be free. And the cost of not making information free is real. In meetings, so much time is wasted asking questions that could have been answered in advance given access to more information.

To report in public is going to require that we are comfortable with seven tenets.

First, that we’re comfortable with exposure, and that we develop thick skin.

Second, that we lead with the ugly, then with the bad, and lastly with the good. We will inevitably stumble. There will be hard times. There will be embarrassing mistakes. But the real mistake is always to hide the mistakes. If we develop the courage to share our struggles, we’ll ultimately benefit.

Third, that we embrace contradicting ourselves. One of the problems with reporting is that, over time, you inevitably flip-flop. You say one thing, then you do another — and it looks bad. It looks bad, but it might be exactly the right thing to do in your chaotic operating reality, as new information comes to light. As important as it is to construct and maintain a narrative, it is just as important to change the narrative when reality changes. Narratives exist on top of reality, and are only useful insofar as they reveal aspects of reality.

Fourth, that we keep making decisions with limited information, even when we might be wrong. If we don’t take risks because we’re afraid of making mistakes, then the accountability of public reporting is hurting us. Every failure is public, but that doesn’t mean we should take less risks. Risk taking is essential to great strategy: generals and their captains cannot wait until they have complete information to make moves. They have to operate on gestalt, on intuition — and animal instinct. There must be a willingness to be misunderstood, even for long periods of time.

Five, not managing against the report. Reports can take on a reality of their own, and performance in “report-reality” is not what we should be optimizing for. We should optimize for long-term profits, long-term market dominance, long-term fulfillment of vision. The reports have an accountability function, but accountability really isn’t the point. The point is expression and communicating information to help outsiders get into your head. You want to show them what it’s like to think like you, to see through your eyes — so that they can help you. Reports are like an API — they expose information that then frames opportunities for outsiders to connect with you.

Sixth, the hideous email footer and cowardly Twitter bi-line “by no means do my views reflect those of my employer” is exactly the wrong attitude to take. Louis XIV’s attitude “Je suis l’etat” is exactly the right attitude to take. My views reflect those of Invisible. I am Invisible. But so is everyone else at Invisible. They are all Invisible. We are Invisible. When we debate, our views are competing for supremacy, and may the best view win! This competitive spirit results in “public disagreements” or inconsistencies that might seem scandalous, but which are really virtuous — because they are symptoms of a debating culture. Never underestimate the power of free speech when it is exercised by the few people who have the courage to exercise it.

Seventh, and lastly, and this goes without saying, but I’ll say it anyways — being the most transparent company ever does not include exposing client information, which we should always be obsessed with protecting. Indeed, our decision to be transparent should increase the trust our clients have in us — because they place so much trust in us, they deserve to have as much information about us as we can share.

Our investment in transparency goes far beyond monthly reports. I want to publish literally all data that isn’t client data, or isn’t detailed operational data that has no public relevance. So all data that might be relevant in any way to anyone on the internet — that doesn’t need to be confidential. It’s a “default to public” attitude.

To the best of my knowledge there is neither a public nor a private company as transparent as we are about to become. So as we share all of this information, I have the sense that we’re doing something world-historical.

The closest metaphor I can think of is the open-source movement. This is open-source for corporate information.

If this experiment fails, it will be in spite of my commitment to transparency, and a refutation of all this rationale. At least there will be a record of the attempt, so that the next person who wonders “Why don’t companies report in public?” will know that one company tried.

But if it succeeds, what then?


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