Ceiling over the cafe

Being transparent is relatively easy when things are going well. When times are hard — not so much.

It was so much fun to post updates here — photos of the latest new wonderfulness to appear at LaunchPad Coworking. I was pretty active on Twitter, keeping up with the blog, and generally letting everyone know how things were going.

This past month or so has been really hard, though. And rather than sharing everything with the world, I’ve grown quiet, afraid that posting bad news would just make things worse.

I worried that if potential investors learned we were struggling, they’d be reluctant to invest. That’s a legitimate concern. But mostly I was worried about my own embarrassment. After all, I’m a successful serial investor, right? And this is an awesome idea and a great model. It’s innovative, well thought out, and in demand. How could I be struggling to get it open?

Well, we are indeed struggling.

Investors have backed out, banks are keeping their fiscal fists tightly clenched, and we owe lots of people money.

Individual coworking area

We are so, so close to opening. If we had the money we need today, we could be open in 6-8 weeks. But construction has stopped. We continue to move forward on many fronts. The reservations software is being tested, the equipment is sourced — so many things are ready to go. And our incredible team is intact. Believe it or not, we sometimes even manage to laugh and have fun as we work our asses off to figure out how to fix this.

We need help. We need investors. Or a loan. I can’t put deal details out there, because anything construed as advertising will get me in hot water with the SEC (as you can imagine this is extra infuriating given the SEC managed to look the other way at the Bernard Madoff $50 billion fiasco).

Everyone we’re working with wants us to open. And clearly Austin wants us to open. I have been getting more requests for space this past month than ever before. This economic debacle has actually made the demand for a place like LaunchPad Coworking even greater.

We’re looking for leads. Contacts who can help us make this happen.

And thanks for listening. This was a hard post to write, but it really does feel better to put it all out there.

Now maybe this is a case of sandbagging — maybe Williams is just pretending to worry the way a friend of mine used to pretend to read romance novels in front of her competitors right before she kicked their asses in high school debate competitions. But Evans sounds sincere enough as he talks about what Twitter is, where it’s going, and what his concerns are.

Like some other social networking sites, Twitter is more concerned (for now anyway) with building users and less concerned with finding a revenue stream. In fact, Twitter just turned down a deal offered by Facebook for $500 million (mostly in stock) to be bought out.

Not only that, but Evans says that, as Twitter works to figure out how to make money, for now the company will keep relying on investors’ cash to move forward and avoid taking on ads. That is, as they try to figure out the best way to generate revenue, they will only spend private funds rather than experiment “out loud” with revenue generating.

Also, Evans totally admits to being wildly worried that any minute now some competitor is going to launch a microblogging site that will, in his words, kick Twitter’s butt.

It’s nice to hear some real honesty out there, especially from a company that, while it only has 25 employees now, seems on the verge of exploding. And still, they have the wisdom not to let hubris get in the way. Or, to put it in Tweet format (140 characters to be precise):

Ev — thanks for telling us what you’re really thinking. Nice change esp in light of all those Wall Street clowns that BSed the world. Bravo.

I’m a big fan of being open about my business. The LaunchPad team uses Basecamp from 37signals for almost all our project management and correspondence. My mantra is “if it’s not in Basecamp, it doesn’t exist.” It’s not just for the core team, it’s also for our contractors. Marketing, architecture, IT… everyone can check in with everyone else and offer project feedback in the form of opinions, suggestions, criticisms, and connections. I’m absolutely positive this is helping us come up with a strong, unique model for our business.

And even though no one wants to look bad or be wrong, all of us are wrong at some point. Getting that out in the open — whether we point out our own mistakes or acknowledge the mistakes when they’re pointed out to us — keeps dust bunnies from turning into monsters under the bed.

That said, I think some people misinterpret the word transparency, confusing it with the idea that you must, at all times, be an open book. About everything. That I disagree with. There is such a thing as TMI.

Sometimes the “too much” is about over-sharing unnecessary details and moot points that can only lead to bogging down a discussion and getting off track. Other times, it’s easier, more efficient, and better for overall operations when, for example, I veto an idea without having to explain my thought process.

Let’s say, for instance, I’ve done months of research on why a particular system won’t work. If someone comes to me, post-research, and tries to convince me that a system I’ve ruled out needs to be ruled back in, I don’t feel obligated to dig through my files and present my case. (Nor do I need to be an ass about it, I know.) I can say, “I have a real reason for not doing that, but thanks for the input,” and that’s the end of it. Giving lots of people access to lots of information means tons of input. It can be tricky to manage, but it’s worth it.

There are moments I’m put on the transparency spot, not necessarily in a bad way, but when I have to make an instantaneous decision whether or not to answer a question. This happened at the SXSWi core conversation on transparency, when someone in the group asked me what the LPC startup budget was going to be. I gave a dollar figure, not a huge amount for a startup but, based on some audible sucking in of breath I got in response, did come across as an awfully big chunk of change compared to what some other spaces are operating on.

I knew that announcing my budget could be interpreted as me being showy, or somehow different from a lot of the other coworking pioneers. I also knew that I wasn’t offering the number to shock, wow, or intimidate anyone. A question was asked. I gave the answer. Did I plan to announce that number publicly? No. But you either commit to working this way or not.

Which doesn’t mean we can’t have secrets. A Wired article called The See-Through CEO points to Steve Jobs to illustrate this point. Part of the reason the iPhone and other Apple products are so attention-grabbing is because they’re introduced in a Wow moment, after a lot of hush-hush and build-up, like a magician pulling an ostrich out of a coin purse.

Transparency can also be a really easy way for the well-intentioned to stumble. How’s that? Speculation. I could easily sit here and speculate about all the cool things LaunchPad Coworking might do down the road. I could say “We’ll probably be offering organic coffee stirrers that will not in any way adversely affect the mental health of undernourished chickens in third world countries. But if I don’t know that for sure, I’m not going to guess or make promises I can’t later keep. If word gets around about those fancy stirrers and someone comes in expecting them only to find that we don’t have them and have never had them, they’ll have a lousy experience.

So, while on the one hand I probably could be considered by some to be too transparent — offering our architectural plans online for example — in general, I prefer to err on the side of cautious honesty. Just as the sporting goods company Patagonia offers the realistic slogan, “Cause no unnecessary harm,” (as opposed to some hyperbolic, impossible promise to cause no harm at all), I don’t want to say maybe we’ll have this or that. That’s not me being opaque or even secretive. It’s just me wanting to be certain, before I throw the (literal and figurative) door open, that you really will be able to get a clear view.

What are some of the challenges you encounter in doing business transparently?

photo by randomduck