“The curse of modernity is that we are increasingly populated by a class of people who are better at explaining than understanding, or better at explaining than doing…There is no evolution without skin in the game.” – Nassim Taleb
Skin in the Game
Too often, our society separates responsibility from accountability, reward from risk.
In his book Skin in the Game, statistician and investor Nassim Taleb reveals the shallowness of punditry, of opinions without consequences. Financial advisors don’t follow their own portfolio guidance. Political columnists don’t win elections or implement public policies. And the only successful businesses built by many self-help hustlers are the seminars they peddle.
Their advice can be useful, but it’s not the language of the builder, the proverbial man in the arena. And as Taleb points out, “For it will always remain that action without talk supersedes talk without action.” Pundits don’t have skin in the game.
Widen the aperture and we are all pundits in various arenas. Armchair quarterbacks and wannabe-presidents with tidy ideas about how things should’ve been done. But instead of fostering a culture of critics, our society needs more operator-writers: those holding a tangible stake in the outcome of their craft and publicly sharing their lessons. They are entrepreneurs, developers, traders. Their incentives are tied to results and they have perspective that the pundit does not. Operator-writers have skin in the game.
What does this look like in practice? The derivatives trader who regularly publishes her portfolio holdings alongside the typical market forecast that’s wrong in a year anyways. The artist who produces not only paintings, but a candid peek behind the curtain of the creative process. The software engineer who tweets every milestone, from the first line of code to functioning application.
More than any other field, entrepreneurship exemplifies skin in the game. Business operators not only make falsifiable predictions; they live them out. Taleb says “Don’t tell me what you think, tell me what’s in your portfolio” [1]. While traders simultaneously hold dozens of positions, an entrepreneur’s portfolio is often a single company. A ride or die. Business operators might place one bet in a decade, sometimes one in a lifetime. With a single basket full of eggs, successes and failures are evident, allowing budding builders to cut their teeth on the experience of others.
But while many leaders publish a memoir after making their millions, what’s more useful is the journey of the up-and-comer, a nobody becoming a somebody, a builder in the toil of building, a man in the arena.
Transparency: Real-Time and Radical
Despite the obvious risks, some entrepreneurs are sharing their experiences in real-time rather than the rear view. No one personifies this better than Joel Gascoigne and Buffer. Founded in 2010, Buffer develops a platform for social media engagement analytics, and from day one, Joel and the Buffer team embraced a radical core value: absolute transparency.
This remarkable journey began in 2011 when Joel publicly released Buffer’s product roadmap, revealing their backlog of development plans. By March 2013, Joel had published all employee salaries and equity percentages. A year later, he shared the first hiring report internally: a spreadsheet of applicants, interviews, and hires. As Buffer grew over the years, their transparency was both striking and unheard of, including releases of:
- Formulas to calculate employee equity and profit sharing
- Dashboard visualizing real-time company revenue
- Valuation term sheet from its Series A investment
- Enhanced product roadmap via a live Trello board
- Salaries for all current employees and salary calculators for potential hires to estimate their earnings at Buffer
- Metrics highlighting equal pay for employees and diversity employment
- A pricing breakdown to show users how their money is spent
Now in the COVID pandemic, Buffer is experimenting with four-day workweeks to improve employee wellness and is characteristically publishing its findings [2]. Joel’s radical approach to transparency seeded Buffer’s rise, where they now serve over 68,000 businesses internationally and gained recognition as one of America’s best workplaces [3]. But as Joel points out, Buffer doesn’t choose transparency for performance: “transparency breeds trust, and trust is the foundation of great teamwork.”
Joel isn’t alone in discovering the benefits of sharing with a public audience. Suhail Doshi launched Mighty with the goal of building a faster Google Chrome for power users [4]. From Mighty’s inception in April 2019, Suhail has tweeted a flood of updates, from a new landing page and first pre-sale customers to a strategy pivot and Mighty’s Alpha release. Like a magician bringing the audience in on the act, Suhail’s community now provides tailored product feedback and actively roots for Mighty’s success.
This transparency led to an acceptance at the Y Combinator accelerator program where Suhail refined the product, expanded the team, and garnered further public momentum. And it all started with a tweet:
Others have different plans initially. As an early engineer at Pinterest, Sahil Lavignia itched to become an entrepreneur. Even before vesting his stock options, Sahil left to found the startup that would become a billion-dollar company, so he thought. Gumroad would allow internet creators — graphic designers, illustrators, app developers, tutors, writers, and other freelancers — to sell products with a simple link rather than a landing page, storefront, and checkout system [5].
But after raising over $8M from an elite cast of investors, Gumroad’s growth leveled off, and by Fall 2015, Sahil had to lay off 75% of his staff to stay alive. The startup had lost its shine for venture investors, and raising additional money wasn’t feasible. As the final five employees trickled off to greener pastures, Sahil debated shutting Gumroad down.
Finally, he caught a break.
When an investor bowed out of their ownership and returned their shares, Sahil slashed costs to become profitable, solving customer issues himself to continue operating as a one-person enterprise. As he wrestled with a new vision for Gumroad, Sahil began to see the impact he could have through transparency, so in April 2018, he began publicly sharing Gumroad’s metrics:
Encouraged by the warm reception to “open-sourcing” Gumroad, Sahil started quarterly board meetings that anyone could join, a practice he still employs [6]. The response has since been incredible. Although Gumroad isn’t looking to raise money, more investors than ever are offering funds, and the company now processes $175M for its creators annually [7].
Building in Public
What Joel, Suhail, and Sahil all have in common is the approach of building in public. Rather than hide their burgeoning companies behind a digital fortress, only lowering the drawbridge with a chic landing page and quasi-UX, each of these founders embraced transparency. They published openly, approached feedback enthusiastically, and built communities to last.
However, building in public opens a founder to untold humiliation if things go awry. If publicly posted metrics level off, potential investors may pause. Employees may be wary to work at a company where leaders revel in the spotlight. And leaders must double down on key decisions, which increases the perceived penalty for pivoting — lest your audience wonder what went wrong.
So why risk the exposure?
Bessemer venture capitalist Gaby Goldberg points to several benefits of building in public [8]:
- Generates hype for your product or service via a sneak peek to potential consumers, often garnering early momentum in a world saturated with new offerings
- Enables stronger trust within your organization through open transparency to the outside world
- Enables stronger trust outside your organization in conveying an authentic brand to users
- Encourages users to directly engage with your strategy, tightening your feedback loop of ideas
- Highlights an honest, visionary culture that becomes a magnet attracting future talent and investors
- Boosts your reputation as an expert in your chosen field
More organizations should build in public. Aside from the benefits to the builder, there is obvious upside for the public:
- Provides a mode of discovery between early adopters and small, up-and-coming products
- Opens a channel for users to positively shape a product they use and love, especially for niche or expert markets
- Prepares future builders with a variety of lessons: entrepreneurial strategy, raising investment, organizational management, and developing a community-centric flywheel
- Enables the sense of a shared journey: supporters celebrate wins and sympathize with losses
In this way, the benefit to the public is equal parts utility and shared experience. The obvious benefits are practical: the apprentice learning from the master. But the second-order benefits are perhaps more interesting.
Why do we follow our favorite artist, musician, or athlete? It’s not solely skill acquisition or mimicry of craft. It’s a sense of affinity, of watching a story unfold, of experiencing history. Builders that tap into this reservoir of connection will be most successful.
Where to Next?
Now exploding in popularity, building in public may become the zeitgeist of the 2020’s. New examples abound. Take Lambda School: even before gaining market traction, the online coding school nurtured a strong and diverse online following that now celebrates milestone after milestone [9]. Since 2017, Lambda has grown from its first student cohort of 10 to its most recent of 2,900 [10].
Patrick O’Shaughnessy is another case. After growing the Invest Like the Best podcast to 200 episodes and 20M listeners, Patrick leveraged a captive audience to launch the Colossus platform in December 2020: a community and learning hub for his audience to learn in public and discover all things business and investing [11].
This pattern is now a trend. Online checkout startups are forming founding teams on Twitter [12]. Former corporate employees are finding dream roles by recruiting in public [13]. One writer is even building a town in public [14]. But while stories are circulating, the movement is in its early innings, and its potential endless.
Taking a creative or entrepreneurial risk is itself a noble pursuit: a bold, indelible step into the arena. The builder who then shares that experience — who bears skin in the game and the oft-distorted risk of public failure — makes it doubly so. Memoirs of the past are both useful and entertaining; they encompass a neatly wrapped drama, start to finish. But it’s the imperfect, open-ended story that has the most to teach.
Craft, ship, share. Build in public.
John Stone 