The emergence of the naked start-up – why are entrepreneurs behind corporations in creating the open economy?

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When you go to networking events in Silicon Valley and ask people what they’re doing, you’ve got around a 50-50 chance of a “we’re in stealth mode” reply. Lots of nascent start-ups, and all of them afraid that someone will steal their idea and get to market before them. It kind of makes sense, since ideas can be copied in a flash, and whoever gets there first has got a head start, however fleeting.

Turning that thinking on its head is Path 101, which is “live-blogging” the start-up from even before the company was incorporated. Full details of everything the start-up is doing, from its core positioning through to the memos of its Monday strategy meetings (complete with Digg this! buttons), are online. Sometimes what they write about makes obvious sense to post to the world, such as what they want from LinkedIn to be able to build a good complementary product. Other times, they write about details of their strategy and activities that go far beyond what most entrepreneurs would want to discuss.

The thinking behind this approach is that your lead before you are copied by others is evanescent anyway, whereas exposing what you are doing brings attention, useful feedback, relevant connections and more. What is truly differentiated these days is not so much ideas, as the ability to generate ideas. No doubt if someone tried to copy exactly what Path 101 is doing, they’d always be behind the new insights the founders were generating. The other truly differentiated foundation of the economy is relationships, and being open is one of the strongest relationship-generators there is. It builds exposure and trust.

Corporations have slowly been learning the same lessons, with the success of the “open-book” enterprise, and the general acceptance of the reality of the naked corporation. Information flows anyway, so why not go with the flow rather than impede it? I’ve spoken and written before about creating the transparent corporation, the shift to richer reporting from companies, and blogging in investor relations, among other related issues. Corporations are getting it. So why are entrepreneurs, who are supposed to be creating the next phase of the economy, generally so closed and opaque in what they do? They should be showing the way forward into a more open economy.

Path 101’s description of its business is below. Fred Wilson will be an angel investor, and a seed funding round is expected very soon.

Think of us as “pre-Monster.com.” When you arrive at a big job board, it asks you what you want to do and a lot of people simply don’t know–from college kids to experienced professionals in career transition. We’re all about career discovery and we’re going to provide a community powered set of services around figuring out your opportunity set and where you belong–from peer advice to personality testing and collaborative filtering around career path data.

3 replies
  1. Ross Dawson
    Ross Dawson says:

    Yup Charlie, definitely more fun – hats off to you for showing others how to do it.
    Great links Erick – Ideablob is excellent.
    I find that there are great gulfs in people’s attitudes to openness. People either believe in it or they don’t. I personally believe that those who are more open will be strongly advantaged in the economy that is unfolding before us. And it’s more fun too! 🙂

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