Transparency’s dirty little secret Jason 07 Feb 2006

19 comments Latest by murali

When snap.com launched at Web 2.0 in 2004, Bill Gross was high on transparency. They were going to share their revenues openly and easily. There was a link on the home page straight to their numbers (they may have even shown their numbers on the home page). A visit to snap.com today shows no such transparency on the home page, no such link to revenue numbers. There’s not even a mention on their about page. If transparency was such a key component of snap.com, surely it would be part of what they’re about.

We’re seeing history repeat itself on Seth Godin’s Squidoo. When Squidoo launched just a few short months ago they had revenue numbers on their home page. And now it’s gone. I think it got up to about $2500 or so.

For the record, change is good. If something isn’t working for you you should change it. However, change regarding transparency is tough when you’ve made it a cornerstone of your business.

Bottom Line: Transparency is good marketing, but you’d better stick with it. Starting open and then trending towards closed is worse than starting closed and trending towards open. Think before you leap into transparency — it’s a lot harder than it looks.

19 comments so far (Jump to latest)

Noah 07 Feb 06

I agree, BOO!

That’s ok, who even uses em anyways :P

Being publicly traded makes Google kinda transparent… if you have shares.

ek 07 Feb 06

I guess my question from a customer’s perspective is, why should I care what my preferred search engine’s revenues are? When it comes to search, it’s relevance, not revenues that matter to me.

And isn’t putting that sort of data on your homepage an excellent example of adding unnecessary complexity?

I understand that these companies had promised to be transparent with regard to their revenues, but the problem seems more to have been that they displayed that data on their homepages in the first place, not that it’s since been removed.

On top of that, I’m not really sure that simply displaying revenues makes a company transparent. Seems to me that the questions are more on the cost end of the equation, as in, is Start-Up X spending $10,000/month on a private jet for the CEO, or an exorbitant sum for space in a high-rent part of town, or thousands on a luxury box at some stadium, etc.?

But even then, those would be questions of interest to investors, not customers — why should that sort of data (or even a direct link to that sort of data) be presented on the homepage of a consumer service?

David Demaree 07 Feb 06

I agree that transparency about revenues/spending/etc. doesn’t directly benefit the average consumer. However, to promise transparency and then back away from such a promise sends a troubling signal. What happens when a company posts that they won’t sell their customers’ e-mail addresses to marketers, then that promise disappears from the website?

Heath Row 07 Feb 06

The Squidoo team continues to stand behind, in front of and beside our efforts to be transparent — just check the FAQ (http://www.squidoo.com/pages/faq) for a breakdown of how we earn and divide up royalties.

While the aggregate stats — lenses, royalties — are no longer on the main page given our recent redesign, you’ll see them surface elsewhere soon.

Ed 07 Feb 06

I would’t care about financial information unless I had a long-term relationship with the business or if I am really affected if they go out of business. For example having a bunch of important ideas on Backpack or projects on Basecamp and then 37signals going under. For a search engine I don’t care.

In terms of Squidoo I think they started promising revenue sharing with lens owners but now the revenue is so little that people won’t be interested in creating lenses.

I am interested to see how Squidoo does. For me, Godin is a genius but I don’t see the benefits of Squidoo. For lenses to be productive they will need to start ranking very high on Google and right now they aren’t. I don’t think people will go into Squidoo to find info on a particular topic as they do with Wikipedia.

Jacob Stetser 07 Feb 06

In a company that bases its business model on profit-sharing, such as Squidoo, some level of financial transparency makes a lot of sense.

Honestly, however, financials don’t represent anything more than a few numbers. Sure, if I’m trying to decide where to invest my money, that information helps. But in deciding which companies to support, to buy from, to join, to believe in, I’d honestly prefer more transparency in intention: well-written, clear, concise and honest communication on a company’s mission, its goals (on a greater level than $$$) and its progress.

Knowing that a company honestly believed in its own ideals and openly discussed its performance on those grounds? Priceless.

Rich 07 Feb 06

They could make Snap as transparent as they want, but I still won’t use it. From what I could tell, it’s trying to do the same thing every other “better” search engine (search engine aggregator) is trying to do. Why do these people bother?

Robert G 07 Feb 06

I do like the new Squidoo changes, especially the list of the Top 100 Most Profitable Lens. Now we can see what the successful ones are doing.

My lens finally made it into the top 100 a few weeks ago (before the changes) but hasn’t made .01. I can’t wait for the Horizontal Adsense Ads… They’re still coming right???

Jennifer Dlugozima 07 Feb 06

Agreed. If you tell customers that you will be transparent about your revenues (because transparency is part of your marketing strategy) and then decide not to, you have set a precedent that you will go back on your word.

Customers find that unnerving because they’ll wonder what else will you change. “What other promises will the company break?”

Therefore, before embarking on such a bold strategy, it’s best to figure out what the exit strategy is. If there is none, then I wouldn’t bet the ranch on it.


Gary Boodhoo 07 Feb 06

ah jeez, here I was thinking this was a posting on using cross-browser transparency techniques. D’oh!

John 07 Feb 06

Well, you have to give all these people credit for trying to make a better mousetrap anyway.

John 07 Feb 06

I have been wondering about Squidoo’s deciding to move the sharable revenue off the homepage to ???. To be honest, Squidoo is a good idea but the support is horrible, the logo with the yicky looking squid doesn’t fit, the orange lenses that all look the same are ugly, and now - the transparency is gone. They have work to do.

Gayle 07 Feb 06

I’ve never heard of squidoo until just now, and I have to say, the explanation of what the cripes is going on there is really lacking. The About page says it’s a place where you can create “lenses.” Well, that helps. Only not. I’m pretty sure you can’t start making up names for things and expect people to know what they mean. Maybe all you guys have been there and know what the hell a “Lens” is and why I would want to build one, but I sure don’t, and shouldn’t it be easy to find an explicit definition?

Kyle Posey 07 Feb 06

When your business was built on a cornerstone of providing free information (whether it’s financial transparency or some other type of information), then it will always be hard to remove that cornerstone.
No one likes to have things taken away from them, whether they use it, deserve it, or even care about it.
It’s probably the same reason why Photoshop couldn’t drop even 10% of their featureset from their next version release.

Dan Boland 07 Feb 06

Maybe all you guys have been there and know what the hell a “Lens” is and why I would want to build one, but I sure don’t, and shouldn’t it be easy to find an explicit definition?

Ehh, well, they have a big, giant FAQ page that answers those questions. Though I do think the whole “lens” thing is supremely dorky.

chris sivori 07 Feb 06

My main problem with Squidoo has always been that I still don’t know what it does or why I need to use it. Most of the lenses I have seen are pretty superficial things. I guess it’s like a annotated, topical linkblog? Can Squidoo’s essential function be distilled into one sentence?

cluetrain 07 Feb 06

EDGAR is free (not just for shareholders).

There’s an XML standard for financial reporting information (and revenue is just one number) http://www.xbrl.org/Home/ - and there’s not good uptake on it.

Does anyone here know anything about public reporting?

Rahul 07 Feb 06

Squidoo lets you find out more about a topic through the magnifying “lens” of an “expert” on said topic.

It’s a nice idea. It doesn’t work, much like About.com, and in the face of Wikipedia, there isn’t even really any utility. Maybe a different type of execution would propel it a bit farther.

murali 03 Sep 06





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