This may seem crazy coming from one entrepreneurbut I've always had a thing for him honesty. I despise lies and DECEPTIVE because they inevitably cause more problems and create unnecessary challenges, both in his personal life and in his business endeavors.

It's certainly not a common sentiment in the business world, where the mantra of “fake it till you make it” continues to ring loudly, where the vast majority of business owners are deathly afraid of failure, and where the courts are needed to issue admissions. of fault, incapacity or wrongdoing.

As a former investment manager at a VC fund, I've had a front-row seat to entrepreneurship in the startup scene that trades smoke and mirrors like a commodity. Let me tell you – it's almost never outright lies. Most often, it is about distorting reality to create a convenient narrative, e.g. cherry picking growth metrics to magnify one's company, gaslight CLIENTS despite legitimate complaints, making promises that are almost impossible to keep, etc.

Some companies, like Theranos, manage to fool everyone—even investors—and become massive, albeit sometimes short-lived, success stories. But most startups can't keep up with this rant. In the US, half of all startups do not reach their fifth year.

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Of course, failure is not always due to dishonest practices. There are countless legitimate reasons for a company to go under.

But I know what it's like to be at that critical moment where your company is at risk, and I know the temptation to try to pass it off with a seemingly small white lie in the hopes of saving face until things pick up again. in the future.

In fact, I've been there several times. And, each time, my business and I have come out stronger on the other side, facing the issues and dealing with them with brutal honesty and tRANSPARENCY. I hope my experience can encourage you to do the same – not just because it's the right thing to do, but because I believe it's good business.

1. Transparency in crisis

My startup, Supliful, is a white-label CPG platform. Our clients are entrepreneurs – influencers, companies and online business owners looking to launch their private label brands effortlessly. Therefore, when our business runs into trouble, the trouble reverberates down the chain, affecting our customers' operations.

One such recent case was in January 2024, when we faced many operational issues while moving to a larger warehouse in response to rapid business growth. Our fulfillment times were extremely slow, leading to complaints from our users. On-time delivery is the essence of our business. If we have delivery delays, 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 under-promising, ignoring complaints or giving up, I set up an “ask me anything” session with our customers. I stood before them, let them express their concerns and grievances, and frankly acknowledged where we had fallen. After that, I addressed the issues head-on, explained our current situation in detail, and offered a realistic roadmap for when things would be resolved.

Our clients are also entrepreneurs, so they understand what it's like to have business growing pains. They also loved the transparency and appreciated being fully aware of exactly what was going on with their fulfillment provider, gaining a clearer picture of not only our business, but theirs as well. Most importantly, we also delivered the roadmap we promised them.

2. Keeping your mistakes

Much earlier in Supliful's journey, we ran into another problem with an equally critical component of our offering – we ran into 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 have tried to sweep this under the rug, pretend that everything is fine with the product or make excuses to avoid the blame. But the reality was that ensuring product quality for our customers is our responsibility and no one else's. If the supplier doesn't cut it, then the onus is on us to find a better one.

We took a careful look at customer feedback and acknowledged the issue openly with them. We sent a sincere apology, explained the steps we were taking to address the quality issues, and took financial responsibility by offering refunds or replacements, even though our company was already facing troubled waters.

Looking back, the price we paid to keep our customers was a worthwhile investment – ​​some of the angriest back then are some of our biggest customers today. Again, customers appreciated our honesty, transparency and commitment to problem solving. Internally, it encouraged us to find more reliable suppliers, ensuring better product quality moving forward.

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Honesty is good business

Today, transparency and honesty are the cornerstones on which our business is built. For example, I share it regularly My business data and performance updates on LinkedIn — even when the numbers paint an unfavorable picture. Brutal honesty doesn't have to be a reactive thing to become reserved when the shit hits the fan.

Sharing our story publicly and directly by addressing all issues builds trust with all partners. This gives new business owners the confidence to partner with us and our long-term customers to stay with us. It is also back on track in terms of business growth.

Of course, sometimes honesty hurts. It is not easy to admit mistakes, especially when you know they have negatively affected others. But doing so is critical to achieving the ultimate goal, namely, building a strong one sustainable business that can weather any storm.