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Embrace True Transparency, and You'll Experience More Success Of course, you want to create a winning perception of your business, but there are instances where it's vital to be honest.

By Adam Callinan Edited by Jason Fell

Opinions expressed by Entrepreneur contributors are their own.

I have spent a fair amount of time writing about the value that can be obtained by creating certain perceptions early on in the life of a company. After all, perception is reality, right?

While I do still believe this to be an important and valuable tool, there are a number of important circumstances that exist where wearing your heart on your sleeve, while acting in complete transparency, is a hell of a lot more valuable.

Looking at the early stages of the startup lifecycle, there are a litany of people, partners and overall personal interactions that have the ability to dictate outcomes for your business. These people include business partners, customers, investors, attorneys, accountants, employees, spouses and landlords -- amongst many others.

Related: Multiply the Trust Factor Inside Your Organization

There are good reasons as to why putting a "spin" on reality might make a lot of sense in business -- such as when you're working to attract a new potentially all-star asset and selling them on the vision is a lot more effective than telling them that the next year is going to be ridiculously hard, resulting in high probability that they're going to have semi-regular breakdowns. That's not why we're here though.

Let's instead focus on the circumstances that exist where brutal honesty and transparency will do a lot more good than hiding in the shadows of spin -- or even dishonesty.

Your investors

This is always a tough one but really quite important, both for ethical and, even more importantly, legal reasons. It's really easy as an entrepreneur to put on your happy face and act like everything is awesome, despite the fact that the wheels are often a few rotations away from completely falling off. With respect to your investors, you're really doing yourself a disservice by not being completely transparent because, unless you took a loan from a bank, it's highly likely that they've been in your shoes before and have the ability to help -- or at least connect you to people inside their networks that can.

From a legal standpoint you're also opening yourself up to a number of potential issues by not be honest. Now yes, there's a big difference between playing the "everything's great" smiley-faced role to flat out withholding information, but despite the potential difference in legal outcomes, you're still doing yourself an disservice by not allowing them to help -- or at least offer it.

Your attorney

There are certainly lists of issues that can evolve from not being completely honest with your attorney, including at minimum incorrect legal advice. But, assuming that you've found yourself a proper business attorney that has experience in the early stages, you're also missing out on their potentially very sound business advice.

Related: 5 Sure-Footed Steps Toward Earning Respect and Loyalty as a New Entrepreneur

The major benefit that they provide you is the angle, because they've likely seen, in volume, numerous iterations of what you're going through or dealing with in other companies and/or industries, and there's an awful lot of value that can be derived from those perspectives.


Here's a fact: it's hard to be fake all the time. It's completely draining. We know that you can't walk into the office with the body language and facial expression indicating that the world is about to come to an end. So instead you live, or at least fake, the perception everything is great so your employees don't feed off of your bad vibes.

Moral is important and theirs can't wane. So do yourself an enormous favor and find someone, or a group of someone's, that you can be completely honest with about the struggles you're dealing with in your business. This typically works best if you have, or can find, a small group of entrepreneurs to share the truth with and brainstorm solutions.

There is a lot of area, much of which is gray, between complete transparency and dishonesty. From my experience, I have found that transparency is a lot more valuable when it even comes to areas such as negotiations. Yes, if you're negotiating a deal with someone that you know will take advantage of you based on your transparency, a different tactic is necessary -- but the more important question is, why are you dealing with people like that? Sometimes it's necessary, I get it, but you get to make to choose whom you deal with and should do so under the expectation that honesty in both directions is one of the only things that matter.

At the end of the day, it's one of the only things on which you can truly depend.

Related: 7 Startup Habits Worth Keeping No Matter How Big Your Business Grows

Adam Callinan

Entrepreneur and Venture Investor

Adam Callinan is a founder at BottleKeeper, the fast-paced and sarcasm-infused solution to the warm beer and broken bottle epidemics that have plagued the world for centuries. Callinan is also a founding partner at Beachwood Ventures, a Los Angeles-based early-stage and non-traditional venture-capital firm at the intersection of technology and entertainment. As an entrepreneur, Callinan has spent over a decade building small businesses in and around technology, medical devices and consumer products, which most recently includes an exit in 2013. Callinan lives in Manhattan Beach with his wife Katie.

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