Ever since Lawtrades got off the ground, I’ve been sharing our deepest secrets.
That is, I tweeted the following four stats on a monthly (sometimes quarterly) basis:
- The total turnover
- Gross profit
- Supply-side revenue (how much we and our users earn through) our platform)
- Number of customers using our platform
Just a few years ago, tweeting like this would have been insane. The norm has long been to build up quietly – raising funds, recruiting and starting a business in private life.
But lately, there has been a trend toward radical transparency, fueled by founders like Elon Musk. The CEO of Tesla has a long track record of controversial tweetstweets that other founders would never have dared to publish. In the short term, Musk’s unorthodox approach has not always worked in his favor. But in the long run, it has given him and his companies a dedicated worldwide fan base.
Why? Because in the age of disinformation, people are hungrier than ever for trust. Tweeting information most companies hide builds trust and separates founders like Musk from the rest.
So I decided to do the same with Lawtrades. Two years ago, I started tweeting revenue, profit, platform revenue and number of customers on a regular basis. Countless new investors later, I couldn’t be happier that I did.
Why Tweet Sensitive Financial Information?
1. It shows authenticity and vulnerability, two important ingredients of trust
People often portray fundraising, acquiring and closing customers as three separate goals. I believe they are all connected to the same core of value: trust.
Sharing financial statistics shows authenticity and vulnerability. It shows that you are not afraid to give the outside world a look behind the scenes, that you have faith in yourself and your people and have nothing to hide.
Legitimate, long-lasting trust gives investors, customers and applicants something to believe in.
2. It holds you accountable, especially in the beginning
Larger, more established companies have investors, boards of directors and/or shareholders to hold them accountable. Smaller companies do not have those resources. If you stick to a regular schedule of tweets, you are responsible for your followers – people who admire your transparency and have their fingers crossed for you.
Plus, instead of worrying about a lengthy investor letter, tweeting forces you to cut your story down to 280 characters. It removes the writer’s block and forces you to focus only on the most important information.
3. It gives David (you) an advantage over Goliath (them)
In your early days you were David, and your competitors are Goliath. Goliath can mean other businesses in your space. Or, if you’re trying to create a new space, Goliath could mean the normality bias that keeps people from developing new habits.
This was certainly the case for Lawtrades. We had to compete against 100-year-old companies with annual sales of billions. They had names, reputations and proof of concept. But what they lacked was transparency.
Most private companies remain private so they don’t have to give behind-the-scenes tours. But to me, the best private companies operate like public companies and hold themselves accountable by publicly sharing high-level performance metrics.
By embracing transparency, you build a level of trust that your established competitors don’t have.
How our financial tweets have attracted countless investors
I submitted a form through his website and got an automatic rejection. It was disappointing, but instead of chasing him and begging him to reconsider, I started tweeting more aggressively.
I have become more transparent about our numbers and our overall performance. I’ve tweeted screenshots of clients we signed up. A few weeks after Sahil’s automatic rejection, he emailed me: ‘I think I made a mistake. Can we chat?”
After our discussion, he came back in the round and invested $100K.
Lawtrades has many more stories like that, where investors have contacted us as a direct result of tweets. Tweeting is a much more effective strategy than cold emailing, which will likely have you languishing in the abyss of the inbox.
People are understandably afraid of this kind of transparency. It’s kind of an impostor syndrome: you look around and see companies raising millions, generating billions in revenue, and you think your story is void by comparison.
But when it comes to your story, size doesn’t matter. There are many people who would be really impressed to hear that you are generating $100,000 a year.