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How your company can benefit from being open: Lessons from Balanced

Matin Tamizi wants to shift the culture of how companies do things. “It’s time they open up and share more,” Tamizi says. “As a society in general we’ll end up moving forward a lot faster.” It’s something he’s doing with his own company after realizing with some increasing frustration that the software industry was continually trying to figure out solved problems over again and not moving forward as a result.

By way of example he mentions that he used to work on Wall Street, building hyper-connected systems, but on moving to Silicon Valley he found, a decade later, people were still trying to solve problems with backend infrastructure that had essentially already been solved. “The fact that Wall Street didn’t open those things up and discuss them publicly because they viewed them so much as a competitive advantage meant we’re just redoing the same stuff over and over again,” Tamizi says.

He started challenging himself with his own company as to why things had to be kept internal and found that more often than not there wasn’t a good reason. So with the launch of his market payments platform, Balanced Payments, he’s made a commitment to be as open as he can and continually challenge the boundaries of transparency and openness. He’s partnered with Gittip founder Chad Whitacre to launch the Open Company Initiative, believing the benefits of being open extend beyond just his own business.

Balanced uses GitHub to make all their code public, as well as all their product decisions, something Tamizi says improves both their internal and external communications, and creates accountability to their customers. He notes public accountability is not really new, with Amazon essentially forcing a lot of product companies into embracing openness with their public product reviews. “That was actually very revolutionary at the time,“ Tamizi says. “The manufacturers of those products screamed bloody murder at the idea that somebody could talk about their product publicly and criticize it. Some of the best companies learned that even if they didn’t have the best product, they would use that public criticism to engage with customers and use that as feedback for their product.” As there’s no platform to “review” payment companies, Balanced Payments settled on using GitHub as its public forum.

An important distinction is that open companies are not just about open software. They’re open with their ideas, which can be a fundamentally challenging for a lot of businesses. It’s not a concern for Tamizi. “It’s one thing for the ideas to be open, it’s another to actually go out and implement them,” Tamizi says. “Think about it this way, Google could open source their entire search algorithm and for the most part people wouldn’t be able to do anything with it, because the value that Google provides is this massive infrastructure and the data that they’ve built.The software to them is not actually that valuable. Also, knowing what Google is building is not all that valuable; it’s the fact that they provide that service that’s valuable.”

Tamizi says there are three main benefits to being an open company:

1. Culture. The culture that results from embracing openness means more people will want to work there. “You attract a very specific kind of person,” Tamizi says - someone who is already in tune with your company and vision. Balanced has managed to attract some great talent from open source developers who were doing their day job and contributing to open source on the side. Working at Balanced means that contributing to open source is part of their job.

2. Better Products. Being open creates more internal and external accountability for a company and as a result, it’s going to build a better company and a better product. It’s the perfect “customer development” tool because all decisions are made in the open and with input from customers. Customers contribute ideas for feature requests and comment on ones that are being proposed. It really is “listening to your customer”.

3. Community. The customers that you work with will be more engaged, so you’re less of a separate entity. By cooperating with your customers you build up a relationship where people feel part of the company that you are creating. It’s about building a community.

Tamizi notes there other benefits too, including the ability to move faster (there are no NDAs, and contractors can access and familiarize themselves with all the code on GitHub). There’s also the media attention that operating as an open company can bring.

So, what’s the limit on openness?

At the moment Tamizi declines to give me any kind of stats for revenue and how many people are using the platform daily (though they have been public with other stats). When pressed as to why, he said, “We just don’t.” It seems like an odd distinction given their openness on everything else. There are of course obvious protections around processes to guard against fraud, being a payment company after all.

Whether they’ll share revenue and sensitive company statistics down the line remains to be seen. After all, in Tamizi’s own words: “Continually challenging why we shouldn’t share something is part of our process. It’s part of what being open is about.”


The subjects were @matin and @balanced.
The author was @bronwen.
The editor was @whit537.


© 2014 Bronwen Clune, licensed under CC BY.