Buffer helps users share social media content by scheduling online posts throughout the day. The company was founded in 2010, has received close to US$4 million in funding to date and currently employs 34 staff across 10 countries in a distributed employee model, although the company is headquartered in San Francisco. Buffer has about 2.4 million registered users (approx. 10% active) and just over US$500k in monthly recurring revenues.
WHY IS IT AN INTERESTING CASE STUDY ?
Although Buffer is a small technology company, it has hit the headlines due to its founders’ radical transparency. Specifically, and unlike most funded Valley startups, its financials are made totally public as part of the company’s overall management philosophy. All financial data is published regularly on Buffer’s aptly-named BufferOpen blog, and all salaries, including those of the CEO and senior management, are published in a Google sheet together with the company’s detailed compensation formula.
Why do this? According to Buffer’s CEO, Joel Gascoigne:
“Sticking to radical transparency was probably both one of the most frightening and exciting things to do over the past months. It has meant to open up and make ourselves extremely vulnerable for ideas, since they were easily accessible to everyone on the team. Let me give a few examples of where we’ve started to put more transparent workflows in place:
- Complete openness about our revenues and user numbers: Every month we publish the investor update here on the Open blog.
- Progress reports on Buffer’s customer support, Buffer blog performance, Buffer for Business performance: Holding ourselves accountable and putting all these monthly reports out there, was another big step.
- Every internal email sent between any 2 people on the team has a certain list cc’ed that is accessible for everyone: For example, if 2 engineers email with each other, they cc the engineers list, if it’s people on our customer support team they have a support email list cc’ed. Stripe was a great inspiration for this. (More about this)
- Personal self-improvement at Buffer: To make this fully transparent, we are using IDoneThis to help us share our improvements daily and keep ourselves accountable. We’ve also published more around this here.
From the examples above, I often reflect on the power of transparency. I believe that it has such a unique potential to empower and inspire a team that it has largely transformed how we run Buffer.
One key reason transparency is a such a powerful value for a company’s culture is trust: Transparency breeds trust, and trust is the foundation of great teamwork.
One of the highest values we have at Buffer is transparency. We do quite a number of things internally and externally in line with this value. Transparency breeds trust, and that’s one of the key reasons for us to place such a high importance on it. Open salaries are a step towards the ultimate goal of Buffer being a completely Open Company.”
- Radical transparency builds a culture of trust.
- Openness in all internal and external communications helps build the company’s brand.
- The long-term goal of becoming an open company helps to guide business strategy.
- Adopting these ideas is much easier to do as a startup than as an established company – the real challenge will be maintaining such transparency once the company grows into the 100s, or if it comes under investor pressure.
- Open salaries: Buffer is a pioneer in this area and have taken salary transparency beyond what Whole Foods is doing by making this data public in the open – not just available within the company.
- Culture code deck: Although Buffer is not alone in publishing its company’s culture code (Netflix set the trend and Spotify also does it), they are genuinely committed to this exercise and keep their code regularly updated in the open.