The views expressed by the business participants are their own.
This may sound crazy coming from an entrepreneur, but I’ve always had an element of honesty. I hate lying and misleading because it inevitably creates many problems and creates unnecessary challenges, both in one’s personal life and in one’s business endeavors.
Admittedly, it’s not a common feeling in the business world, where the phrase “fake it till you make it” rings true, where most business owners fear any failure and where courts are required to issue approval. to be guilty, to be unable to do a job properly.
As a former investment manager at a VC fund, I’ve had a front-row seat to startup businesses, trading smoke and mirrors as a commodity. Let me tell you – it’s almost never about telling a blatant lie. Often, it’s about twisting reality to create the right narrative, eg, cherry-picking growth metrics to grow one’s company, customers turning on the gas despite legitimate complaints, making promises that are almost impossible to keep, etc.
Some companies, like Theranos, manage to fool everyone—even investors—and become huge, albeit sometimes short-lived, success stories. But most startups can’t keep up the charade. In the US, half of all startups don’t make it past their fifth year.
Related: Protect Your Brand With These Strategies To Combat Misinformation In Business
Of course, failure is not always caused by dishonest habits. There are countless legal reasons for a company to go under.
But I know what it’s like to be in that critical moment when your company is in jeopardy, and I know the temptation to try to get through it with seemingly small white lies in hopes of saving face until things improve next time.
In fact, I have been there several times. And, every time, my business and I have come out stronger on the other side by facing problems and dealing with them with brutal honesty and transparency. I hope my experience can inspire you to do the same – not just because it’s the right thing to do, but because I believe it’s good business.
1. Being transparent about the problem
My startup, Supliful, is a white-label CPG platform. Our clients are entrepreneurs – influencers, companies and online business owners who want to present their personal brands effortlessly. Therefore, when our business runs into trouble, the trouble trickles down, affecting the performance of our customers.
One such recent case was in January 2024, when we faced several operational issues while moving to a larger warehouse due to rapid business growth. Our load times were very slow, leading to complaints from our users. On-time delivery is the core of our business. If we have a delivery delay, we make our customers look like fools in the eyes of their customers – a surefire business killer and not something that can be fixed overnight.
Instead of making impossible promises, ignoring complaints, or giving up, I set up an “ask me anything” session with our customers. I stood before them, allowed them to express their concerns and grievances and honestly acknowledged where we were. After that, I went straight to the problems, explained our current situation in detail, and gave a realistic guide as to when things would be resolved.
Our clients are entrepreneurs, too, so they understand what it’s like to have business growth pains. They also like transparency and enjoy knowing exactly what is going on with their fulfillment provider, getting a clear picture of not only our business but theirs as well. The most important thing is that we have also delivered the road map we promised them.
2. Owning your mistakes
Earlier in Supliful’s journey, we had a different problem with an equally important part of our offering – we encountered a major problem with the quality of one of our products. Customer complaints were piling up, and it became clear that one of our suppliers was not meeting the required standards.
Again, we could try to brush this under the carpet, saying that everything is fine with the product or excuse the blame. But the truth was that ensuring product quality to our customers is our responsibility and no one else’s. If the supplier doesn’t cut it, then it’s up to us to find a better one.
We carefully considered the customer’s feedback and openly acknowledged the problem with them. We sent a heartfelt apology, explained the steps we are taking to deal with quality issues and took financial responsibility for a refund or replacement, even though our company was already dealing with bad water.
In retrospect, the price we paid to keep our customers was a significant investment – some of the most angry customers then are some of our biggest customers today. Also, customers appreciate our honesty, transparency and commitment to solving this issue. Internally, it has motivated us to find more reliable suppliers, ensuring better product quality going forward.
Related: 6 Ways to Build Sustainability in Your Business
Honesty is good business
Today, transparency and honesty are the pillars on which our business is built. For example, I regularly share my business data and performance updates on LinkedIn – even if the statistics paint a negative picture. Brutal loyalty doesn’t have to be a practical thing to do when the shit hits the fans.
Sharing our story publicly and dealing directly with all issues builds trust with all our partners. This gives new business owners the confidence of our partners and our long-term customers to stick with us. It has also paid off in spades with business growth.
Sure, sometimes honesty hurts. It is not easy to admit mistakes, especially when you know they have had a negative impact on others. But doing so is essential to achieving the ultimate goal, which is to build a strong and sustainable business that can weather any storm.
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