Since the beginning of Buffer, we've always shared all of our learnings and failures. Over time this developed into a more defined goal and principle as part of the values of the company.
Since we defined our value of transparency within the culture as "Default to Transparency", we found many things within the company that we weren't being completely open about, and we put them out there for the world to see.
We've generally found that we are sharing a lot of things which are somewhat taboo or at least unusual to be shared publicly. As an example, here are some of the current numbers and things we share:
- 1.7m users have registered for Buffer.
- 165k users are active on a monthly basis (shared at least one post).
- We have 28k paying customers on the Awesome or Business plans.
- Annual Recurring Revenue (ARR) is currently $4.35m. We're generating around $360k a month.
- The team is 24 people, spread all across the world.
- We have a strong focus on culture-fit and sometimes it means firing great people who have different values.
- That means Revenue Per Employee is around $181k.
- All our SaaS metrics (LTV, churn, etc.) can be seen at our Baremetrics dashboard.
- We share the salaries of the whole team in this spreadsheet. My salary is $175k.
- We've raised $450k in funding and investors own around 14% of the company.
Why be so transparent?
For us, transparency came quite naturally. Myself and Leo always felt very comfortable and excited to share our learnings. It helped us get more feedback about decisions and it was a way to help others who are getting started.
We weren't always as transparent as we are today, our openness grew as the company expanded. We had a vision to continue becoming more open and we've been lucky to find people to join the team who encourage more openness rather than warning and being hesitant about potential downsides.
In the recent months, I've been asked many times why we would choose to be so transparent. If I'm completely honest, it's not something I had given all that much thought. I think being transparent is a little like creating a startup: if you focus on the downsides, you'll probably just never do it. At the same time, I wanted to have good answers and it felt responsible to give it real thought.
Here are 4 benefits I've seen for transparency:
1. Transparency breeds trust
One of the business books that's had a large impact on me as I've started to grow a team is The Five Dysfunctions of a Team. It's a leadership fable which explains five dysfunctions that often exist in teams, and how to solve them in order to become a more effective team.
The first of the five dysfunctions is "Absense of Trust":
In the book, the author describes it as follows:
"Trust is the foundation of real teamwork. And so the first dysfunction is a failure on the part of team members to understand and open up to one another. And if that sounds touchy-feely, let me explain, because there is nothing soft about it. It is an absolutely critical part of building a team. In fact, it’s probably the most critical." - Patrick Lencioni
Lencioni goes on to explain that being vulnerable amongst teammates and being comfortable having debate and conflict is critical to building trust.
For us, we've found that transparency is another great way to build trust in a team. If all the information about everything that's going on is freely available, that helps everyone to feel completely on board with decisions.
Based on my learnings from the Five Dysfunctions of a Team, I believe the following to be true about transparency in relation to trust:
Transparency breeds trust, and trust is the foundation of great teamwork.
This trust extends to customers, readers of our blog and anyone who interacts with us on any level. We believe that being open helps us to build trust and share our reasoning for the features we have, our pricing, what we blog about, and many other choices.
2. Transparency helps with innovation as a company grows
One of the interesting (and exciting) consequences of growing from a few founders to a 20+ person team and beyond, is that the innovation and decision making has to become distributed. It is both a challenge and a joy for me that I will most likely not be the one who figures out our next biggest product improvements and innovations.
That's where transparency comes in. As you grow and you expect your team to make the same decisions you would, they need to have all the details that you have. Keith Rabois put this really well in an article on First Round Capital:
"if you want people to make the same decisions that you would make, but in a more scalable way, you have to give them the same information you have" - Keith Rabois
3. Transparency leads to greater justice
Another key benefit we've seen, which wasn't necessarily our reason for transparency, is one which Whole Foods cares deeply about: eliminating unfairness and inequality.
We have a formula which determines the salaries of everyone in the team. It has a number of factors such as your role, experience and location. As an example, one factor the formula doesn't have, is gender. When you determine salaries in a more ad-hoc way or through negotation, I think a lot of inequality could creep in.
John Mackey, co-founder and CEO at Whole Foods said that with transparency "any kind of favoritism or nepotism is seen".
4. You open yourself up to more feedback
By practicing transparency, we've found that we get much more feedback on our decisions. For us, we try to take in all that feedback and make adjustments based on it. For example, when we shared our salary formula, we had a lot of comments from people mentioning to us that we weren't paying high enough salaries for people in the San Francisco Bay Area, so we made an adjustment to the formula. Now we're in a much better position to attract new team members in the Bay Area.
It's great to get this feedback. It can be a challenge: we've tried to work on ourselves and grow a team which enjoys and embraces the feedback we receive. As we grow, the feedback has increased too, which will become an interesting aspect to handle. It's one of the reasons we have a large customer happiness team and strive to provide great customer support.
In truth, we don't have a reason for our transparency, it's just one of our principles
One of the most interesting business books I've recently read is Joy at Work by Dennis Bakke. Bakke was the co-founder and CEO of a large US energy company called AES, which reached $8 billion in revenues and 50,000 employees. They operated in a highly unusual, decentralized business model and they had a core value of Fun. In his book, he argued that it is dangerous to tie benefits and reasons to your core values.
"I kept saying that our values were not responsible for the run-up in our share price and should not be blamed for any down-turns in the future." - Dennis Bakke
Bakke explained that as soon as you tie your values to performance, it means that you will question them when you hit a tough patch of your journey.
For us, we believe that transparency at its core is honesty, and it's a value that we want to live by no matter what.
It seems that it is very important that you determine good values if you choose to take this approach. For example, your methods should change a lot. Your principles or values should rarely need to be altered.
All that to say, despite all the benefits we see, those are not reasons that we are transparent. They are nice side effects, and there are downsides too, and we are happy with both aspects.
I'd love your thoughts on our approach to transparency. Drop me a note in the comments and I'll try to respond. Also, if you are striving to build a company in a more transparent way too, get in touch! I am keen to surround myself with people who are also embarking upon this adventure.
Photo credit: Farrukh
I think I’ve just about got to that point with Buffer where sometimes when I stop to reflect on things I think “wow, we’ve actually been doing this for a while now”. It’s about 3.5 years since I started Buffer as a very simple Minimum Viable Product, and we’re now 23 people and doing over $3m in annual revenue. We still have a lot to do and in many ways it feels like just the beginning, but we’ve been at it for some time now.
We have some fairly consistent growth now in new customers, revenue and in people joining the team. In many ways, I think that up until now, everything we have been doing has been innovation. When I first had the idea for Buffer, I didn’t realize at the time but looking back it’s clear that was innovation in social media. The idea of a rolling schedule of posts was not something that existed in all the products. I wasn’t the only one to come up with that idea, but it’s now a feature of most products out there.
These days, with a little more stability, I’ve started to think about innovation again. There are a lot of interesting things happening in the social media tools and marketing space, and I think we need to keep moving and try out new ideas.
The challenge of innovating as you start to grow
One of the interesting things we’ve witnessed at Buffer is that as we’ve started to grow, it is increasingly difficult to do risky experiments.
I think the key reason it’s hard is that we’re in this situation where we’re still struggling to grow the team as fast as we want to. We still have more roles than people, and we’re all wearing many hats. We have an endless list of product enhancements, bug fixes and a/b tests, without even thinking about the crazier ideas we want to try. Also, everything we have on our list is somewhat validated, whereas the innovative ideas will most likely fail (but could have huge rewards if they succeed).
As a result of this situation and challenge, I think we’ve only done somewhat innovative things in the last year. At one point I concluded that we should have a “year of execution” and then eventually be at a point where we can focus on innovation. I think that’s risky, because we will never have completed everything we want to do for the core of the product and may never get to innovating.
A framework from LinkedIn to stay innovative
I was recently watching a fascinating conversation between Reid Hoffman and Matt Mullenweg. I can highly recommend it, they talk about many interesting topics. One of the things that caught my attention was something Reid mentioned in the middle of the conversation which Matt asked him to expand upon. It’s the framework they use at LinkedIn to stay innovative.
Core, Expand, Venture Projects
That’s the wording that LinkedIn use to describe the 3 key areas of activity which they try to balance. Here’s how we’ve tried to take this idea and translate it into what makes sense for us at Buffer:
Core: For us, core means to work on what Buffer already is. It’s to improve our onboarding flow, to fix bugs and figure out where we can make the experience smoother for people who use the product. This also includes lots of ongoing a/b tests to improve the landing page, pricing pages or increase activation rate of new users.
Expand: This is the term for any projects worked on which are logical expansions of what the product already is. For example, adding analytics broken down by team members for the social posts you share, or a calendar view, or better reporting on the business plans. These are all things we want to get to soon, and they’re fairly validated.
Venture Projects: We’re calling this Labs, we’ll probably create “Buffer Labs” in the same way that HubSpot and MailChimp have Labs. This is the area we’ve been neglecting for some time (or maybe just the time wasn’t right until now), and we want to make room for now on an ongoing basis. This is for crazy ideas that we want to just try and see what happens. We’ll always approach these super lean to avoid waste, but we have to take the leap somewhat too. If successful, these projects could move to “Expands”.
I think the idea here is to try and shoot for a good balance between these 3 areas, and to always be working on all 3. It feels like a useful framework to follow. For us, it is probably going to be a 50:30:20 ratio right now. We’ll be sure to share our progress on Core, Expands and Labs through the Open Blog and on Dribbble. It’ll be fun to see how this works. Want to be part of working on any of these areas? We’re always looking for people to join the ride.
Photo credit: M Glasgow
One of the incredible side-effects of doing retreats 3 times a year with my startup is that I get the opportunity to travel and experience completely different cultures.
On top of spending a week and a half with the rest of the Buffer team on retreats, in the last two occasions I have made a decision to stay or continue traveling in the same area beyond the end of the retreat.
For our latest retreat at the start of the month, 16 of us were together in Cape Town and I have stayed here 2 weeks so far beyond the retreat. I’m not sure yet whether I will continue to stay longer, or whether I will return to San Francisco. This uncertainty in itself is an example of a new way of traveling which I’ve been experimenting with.
How I’ve adjusted my traveling in the last few years
I’ve been very lucky to be born in a time where there is such a thing as work that doesn’t depend on where you are. We’ve set up Buffer as a completely distributed team (now 20 people across 18 cities in 5 continents), and I’ve had the opportunity to travel a lot already during the Buffer journey.
Leo and I started Buffer in the UK, and after 8 months we moved to San Francisco. We spent 6 months in San Francisco, then 6 months in Hong Kong, and then 3 months in Tel Aviv. After that I lived in San Francisco again for the last year and a half, with a little traveling at time.
The result, for me, of traveling to so many different places is that I started to carry much less with me to each subsequent place. I realized that you really don’t need much to travel, or even to live. In fact, you don’t need much in life at all. I’ve become a big fan of one bag living.
In addition, these experiences were the first time I’d experienced “living” in a place rather than “visiting” a place. Being able to stay 3 months or 6 months meant that I could make new friends, discover the culture in a deeper way and experience working and living there. It relieved a lot of the pressure of “seeing all the sights” in a short space of time, and even on shorter trips now I don’t try to cram too much in.
Traveling around Asia
Our second Buffer retreat was in Thailand in December last year. 10 of us stayed in Bangkok for a few days and then in 2 villas in Pattaya for a week where we worked together and went on a boat trip to a nearby island.
After the retreat, I decided to experiment with traveling by myself, something which I hadn’t properly done before. It was an incredible experience, so freeing for everything to be in your control. Even just the fact that it’s down to only you to get around is interesting, you have to be the one to ask directions or make the effort to meet others, rather than relying on a friend (which I sometimes do).
When we do a retreat, it’s quite a busy time and we fit a lot into the week, not to mention the natural excitement and pressure of meeting people, sometimes for the first time. After Thailand, I decided to travel to Singapore for 6 days, then Taipei for 4 days and then make my way to Japan for Christmas to see my brother, his wife and my little nephew.
It was a great experience to see all these different places in the space of a few weeks. At the same time, I didn’t manage to feel a part of any of these places, I didn’t get past experiencing things on the surface.
Staying in Cape Town
My recent experience in Cape Town is in contrast somewhat to that of traveling around Asia. Rather than visiting other countries in Africa (which would be a lot of fun) I decided to simply stay in the retreat location of Cape Town for a few extra weeks. After the week of retreat, I found an AirBnB place and I could start to build my early morning routine go to the gym again. I found a few coffee shops and a co-working space, and I got to know some people. I did a speaking event and met the startup community here.
With each day that passed, I felt like I got some extra insights into how things work here. I met locals and learned some of the Afrikaans words and some of the differences in how they speak English, too. I quickly stopped feeling like a tourist, although I have been on Safari, hiked to the Lion’s Head and had a kitesurfing lesson. During the week I’ve worked just like I would anywhere else.
I’ve become much more spontaneous with my plans and let things flow based on who I meet and how I feel. I have accommodation for only a couple more days here in Cape Town, so this afternoon I’ll start looking on AirBnB again for the next part of the city to experience.
In the future, I think I’ll take every opportunity to stay a few weeks or even a few months in a place, rather than trying to visit as many places as possible. I’ve found it much more fulfilling to become part of a place rather than simply seeing a place, even if it I’m only temporarily part of it.
Photo credit: Dimitry B
We’ve recently reached the point with Buffer where I’ve started to think about a lot of key higher level choices. As a CEO these can be difficult decisions to make. I’ve been taking time to reflect and luckily I also have an awesome co-founder I regularly bounce these decisions off and an incredible team whom I sometimes get together with and have discussions about our direction.
Regardless of all the support I’m lucky to have, these decisions can sometimes be overwhelming to make. It’s easy to feel a lot of pressure due to the potential impact and consequences of the choices. One decision will literally take you down a completely different path than another.
The choices to make when building a startup
It’s interesting for me to look back at some of the key choices which have made a huge difference to how Buffer looks today. Here are some that come to mind:
- being a distributed team (spread across 16 cities in 5 continents) rather than having everybody in the same city and office
- not raising a Series A (and having no investors on our board) when the usual cycle came around after our $450k Seed
- doing retreats 3 times a year (the last two were Pattaya, Thailand and Cape Town, South Africa)
- choosing to not have a sales team and instead focus on self-serve and word of mouth marketing
- serving small businesses rather than large enterprise customers
- establishing cultural values early and being disciplined about living to them
The questionable impact of each choice we make
The interesting thing about all of the choices I’ve shared above that relate specifically to Buffer is that there are examples of companies succeeding by making the opposite choices in each case. It’s incredibly difficult to say that each choice specifically played any role in any success we have had.
That isn’t to say that the choices haven’t changed the type of company we are. I think they have absolutely shaped what Buffer is today. However, if you were to try and attribute these choices purely to success (maybe take revenue as the metric), then I think we could probably be just as successful with different choices.
Ev Williams has a great example of this around the famous Google 20% time and whether we can say that this contributed to their success:
Google is one of the most successful companies ever. Google gives its employees the ability to spend 20% of their time on whatever they want. Therefore, 20% time is a great idea. Is it? Or was Google successful because theyre brilliant engineers who solved the right problem at the right timekilling it despite the lack of focus 20% time causes? I dont know, and neither does anyone else.
Let’s not always try to tie choices to success
One of the best books I’ve recently read around company culture is Joy at Work by Dennis Bakke. Bakke was the founder and CEO of AES which earned $8 billion in revenues and employed 50,000 people. A fascinating detail is that they achieved this with a highly unusual business philosophy and company culture.
One of the core values that Bakke set in place at AES was Fun. His quest was to create the most “fun” workplace ever. In his journey to fulfill this vision, he found that some supported him and others didn’t. Most notably, he mentioned that several board members had been very skeptical of his approaches but supported him a year later when AES had some of it’s fastest growth. Bakke argued that the value of Fun should not be tied to success nor failure:
I kept saying that our values were not responsible for the run-up in our share price and should not be blamed for any downturns in the future.
This was a point that took me a long time to understand. If we don’t attribute our choices to success or failure, how can we assess if we are on the right track? I think in this case, the point is that our values should hold true in either case, and we should stand by them.
This is the approach we have started to take at Buffer with our cultural values such as Happiness and Positivity or Defaulting to Transparency. I can’t say that creating a company where everyone is happy is something that will make us more successful, and I can’t say that being fully transparent about revenues, user numbers, salaries and other details helps us grow faster than other companies. These are simply values we have chosen to live by.
Even choices like serving small businesses rather than enterprise customers, or being distributed rather than having a single office are decisions which will be difficult to assess at any time. If we fail eventually, I don’t think we could easily tie it to a single one of these choices, and if we succeed we would be wrong to say it was because of these decisions. I think, therefore, the key is to use our intuition and make the changes we feel are right - both in order to succeed, and also to create the place we want to work.
Photo credit: DennisM2
For the first two years of Buffer we didn’t use C-level titles. In February last year it started to make much more sense for me to use the CEO title, and soon after Leo became CMO. We had grown up a little and were not just a bunch of people hacking on a product. There was a little more structure and it was helpful on the inside and from the outside to reflect that.
For half a year Leo used the CMO title, but it never felt quite right. The CMO role felt quite narrow and specialized, and Leo had much more to contribute than that. He had always helped me to think through other areas. In addition, Leo has a real growth mindset which made sense for marketing, but also for much more than that. The company was growing fast and it made sense for Leo to have more responsibilities than purely marketing.
How we initially structured the COO role
I asked Leo to become COO in November last year. I wasn’t really sure how that would work and what it would change, but I knew it would definitely be different. It felt right, and exciting.
Leo and I spoke and reflected on the key strengths he had and how we wanted to have him involved in all areas to push us further. The title felt perfect since I would describe Leo as someone who really thrives with operations. He will always get everything done in his list, no matter what. And he’ll always choose to have more in his list than anyone else. This is something I’m incredibly inspired by.
We structured ourselves with the analogy of a train. I would be thinking about laying the track ahead in the right direction, and Leo would help the train to run on time and move fast. In practice, this translated to Leo being in sync with every aspect of the company and helping us to improve (product, customer happiness, marketing, growth). He’d sync up regularly with everyone and be someone who could help with setting goals and brainstorming how to keep to them.
Some struggles and learnings with the CEO/COO balance
One of the things that spurred the role adjustment for Leo was that we were right in the middle of going through our quiet pivot. We had realized that growth had slowed with the vision we were currently on, and we made adjustments. In some ways we were moving at our slowest pace for some time and we knew we needed to make some changes. We adjusted the vision and it felt appropriate to rethink our roles too.
We spent about 3 weeks with the “Leo kicks Buffer into a higher gear across all areas” setup. I think it was a welcome change from everyone in the team, however right away something didn’t feel quite right for me.
Leo and I were both excited about his role being to help us move faster. I was happy to try and stay focused on figuring out where we need to go in various areas and with the company as a whole. The problem we found, was that it was almost impossible to clearly separate these two processes. If Leo was working with someone to try and set goals and keep to them, he inevitably had to make decisions which affected our direction.
It felt like with the new structure we were suddenly both involved in every decision. The goal of the new role for Leo was to speed things up, but with both of us discussing every decision, things were sometimes grinding to a halt, especially in cases where we didn’t immediately agree.
This put a lot of strain on our relationship as co-founders, and it’s probably the only time I can think of in the whole lifetime of Buffer so far where I’ve had some really tough conversations with Leo. It was exacerbated by the fact we were hitting some of our slowest growth months ever and both felt pressure to pick things back up. I was confused and needed to quickly figure out why it wasn’t working.
How we came to the current CEO/COO structure
In the first week of December we were in Thailand for our second company retreat. It was during our time there that Leo and I had a lot of lengthy walking meetings around Pattaya about the structure of our roles. We talked a lot. I couldn’t think of a more perfect setting for us to figure these things out. We’re both optimistic people and despite the tough conversations we knew we’d come to a conclusion about how things should work. We had gratitude for how lucky we were to be in Thailand and had built a company to a stage where this problem had arisen.
I’m the kind of person who likes to solve problems. I guess that’s why I naturally enjoyed programming (though I rarely code anymore). Therefore, I always like to try and talk things out until we can agree. As an introvert, however, I often do some of my best thinking and have inspiration when I spend time alone to contemplate. So, after several days of discussions with Leo, one evening I took to my room and started reading up everything I could find about the COO role.
I was surprised by how many different definitions of the COO role there were out there. This really confused me at first. For example, one person may say it’s the CEO’s job to motivate and manage the team as a whole and ensure execution of day-to-day tasks, whereas another person may say it’s the COO’s job to manage day-to-day running of a company and help the CEO have room to think on a higher level.
Everything became clear to me when I found this key insight:
"There is commonality across different businesses between the roles of CMO, CFO and most other executive functions, but not so with the COO, where the roles are hugely varied. Maybe the best way to think about it is that the COO does the things that the CEO doesn’t." - Nic Brisbourne
If you look at the job descriptions of various COOs, you’ll find that they could be completely different from each other, sometimes even opposing. The reason is that it all depends on the strengths of the CEO. It was starting to make sense to me that the best CEO/COO relationships are when the two are very complementary to each other. This got me excited since Leo and I have always found we excel in different areas.
"A COO’s value is designed to be complimentary to the CEO. The truth is that no CEO, no matter how experienced, can possibly cover the complex aspects of managing all the functions of a technology company. Its better to divide and conquer. By recruiting a COO, the CEO can focus on the aspects of the role that he/she truly excels at and enjoys the most." - Firas Raouf
So I got to work brainstorming all the areas of the company and which I felt confident about running myself. Once I did that, it became clear how Leo and I should work together. I hopped onto a call with Leo to explain my discovery.
What Leo and I do as COO and CEO
When I shared my learnings around the COO role and how we could work together, Leo was receptive to the adjustments and we were both really excited for the new structure. We’ve used this structure for the last three and a half months and it is working incredibly well.
The key thing we have done is to determine our key areas of focus and embrace the idea that we should not be the key person running anything. It was a key learning that if we’re running something ourselves, we’re not doing it as well as it could be done and we’re also neglecting other areas. So we aim to fire ourselves repeatedly and move to a position where we’re helping with higher level vision, coaching and we’re “being reported to”. This has started to work very well, and it feels like we’re moving faster than ever.
Here’s how Leo and I work together now:
For a while, and especially after the previous experience of stepping on each others’ toes, we tried to make these areas completely separated. Over time, we found there is a lot of natural overlap. Our advisor Hiten shared an analogy which helped us a lot (I’m paraphrasing here):
"Think of it like Batman and Robin. So if Product leads a project, it’s Batman and Growth supports with the right numbers and is Robin."
This is how we approach everything now. The Batman and Robin method helps us have one person who makes that final call, but we can both support each other too.
How do you structure how you work with your co-founder or business partners? I’d love to hear any thoughts, questions or advice you have!
Photo credit: Hans Splinter