There are a growing number of tech companies that are choosing to be fully transparent with their financial metrics. Some of the bigger names like Convertkit, Buffer and Hubspot, are all publicly disclosing every financial detail for the world to see. There are hundreds, if not thousands, of other companies following this open data movement.

From an observer’s perspective, it’s pretty awesome to be able to see how private companies are performing, compare numbers, and analyze data. It’s also great for startups or entrepreneurs to see that information and be able to set realistic benchmarks and goals across industry-specific data.

In fact, it’s because of these transparent companies that helped inspire me to start a blog and podcast talking about my journey. I think it’s truly great to share your experiences with your community and even better for the overall business ecosystem. It would be a shame to keep in all of your experiences and unique insights bottled in. It’s great karma, and a true win-win for everyone to share what you can.

However, from the lens of a business owner already deep in the game, I tend to view things differently when talking about transparent financial data. I’ve always had the mindset of business being like war. In war, it’s very easy to get stabbed in the back if your guard isn’t up. If you’re in battle, which exactly what business is, you would never give all of your closest secrets to the enemy – what good would that do for you? If you’re an entrepreneur that’s in it to win it (like I am), then any piece of information can, and likely will, be used against you.

Other than the short-term clout, praise and acknowledgement on social media (and probably an uptick in Twitter followers), there aren’t many benefits to disclosing your numbers to everyone, especially your competitors.

From my perspective, there’s a lot more downside to making your financials transparent.

Everyone can see when times are bad

All businesses go through their good times and bad times. I’m sure most founders would love to share their data to the world when things are going well, and growth rates are triple figures. But what about when you have that streak of bad luck and horizontal, or even negative, growth rates?

Customer perception

If your business is going through a downturn, or stagnant state, it doesn’t give off the best perception or feeling of trust to your customers. Your customers might feel a sense of uneasiness seeing their provider go through rough times, and could even think about jumping ship because of that. And you can’t blame those customers for doing so. It’s only natural for people to want to do business with stable and growing companies. Even if this downturn is temporary and just a small bump in the road, the perception alone is enough to sway customers.

Recruiting concerns

Recruiting and hiring are two of the most important functions of a growing company. A good recruiter will be able to sell the company’s vision and get candidates excited for the potential job opportunity. If you happen to be recruiting during a rough patch, it could easily sway good candidates from applying to your company. If your numbers are public and a candidate sees big spikes in churn for a few months, or slow MRR growth, they might think twice before applying.

The competition

If my competitors are anything like me, they’d want to step on the jugular when they see an opportunity. Again, if you happen to be going through a temporary rough patch, it could very well be seen as a perfect opportunity for a competitor to get aggressive in their marketing a steal away some of your market share.

Everyone can see when MRR goes up

Your transparent data is showing 20% MRR growth MoM, which is fantastic! You’d want to share this to the world, right? I’m sure many people would be very impressed, including your competitors. Remember, if you’re in business, that means you’re in war. If your enemy has figured out a new tactic, or developed an awesome new weapon, you would definitely want the same thing. By sharing your financials, you’re giving an opportunity for your competitors to analyze and understand what tactic is working well for you, and eventually copy it for their own success.

You can’t act bigger than you actually are

In most cases, startups have no choice but to “fake it until they make it”. For example, if you visited my company’s website when I was just starting out, you would have had no idea that it was a two-man operation out of my parent’s basement.

Let’s face it, as a new startup, you want to give off the impression that you’re much bigger than you are. You’re going to have a company address in major city, a bunch of 1-800 numbers in different countries, and a team page, including some of your successful friends who are advisors. In no way am I saying that the information on your website should be false. That would be flat out unethical or even illegal which is a big no-no. However, without lying to your audience, you just want to look like you’re bigger than you really are. That’s the fact, and there’s nothing wrong with that.

Customers will be hesitant to sign up with a company doing only $1k in MRR. Not to say it’s impossible, but I can almost guarantee it would be a lot more difficult to sign up new customers if they knew you weren’t even making $1k per month.

I’ve definitely been flirting with the idea of making my company’s financial transparent, but after some careful thought, as long as I’m in war, that information is something I’ll be holding close to my chest for the foreseeable future.