The Privacy aspect of a Private Enterprise

When a brick-and-mortar business sets up shop, such as a restaurant or shoe store, they have a business space, employees, a published phone number, and other items that identify the business. As the proprietor on the internet, you expose only what you want to. Depending on the volume and demands of the business, you could be one person or 500. The customer won't really know unless they can find your financials somewhere. With this comes the choice of how private you want to be.

You have 3 choices as to what kind of privacy filter you'll have for your business. The one you choose to use is very important, because you'll need to maintain it. I'll explain why in a moment.

Your choices for internet business privacy:

  • Open-door
  • Closed-door
  • No door

Now I'll explain each and the advantages/disadvantages for a bootstrapped company of one (or few).

Open Door

An open-door internet business is one much like Joel Spolsky's Fog Creek or Jason Fried's 37Signals. The owners blog, make videos, are active on Twitter, and basically expose the inner workings, employee numbers, even recruiting efforts of their businesses very well. An open door startup doesn't even need to be active often in its openness. The creator of Ultra-Edit (one of my favorite code editors), Ian D. Mead, tells the story of how he started his company by himself back in 1993, and he updates his story over the years as his business grows and employees are added.

Advantages of an Open Door startup:

  • Customers gain a sense of trust due to a personal relationship
  • Opportunity to evangelize your philosophy/product and gain a following
  • Gain knowledge of your customers and what they are interested in
  • Customers feel a sense of safety and are willing to spend money with you

Disadvantages of an Open Door startup:

  • You open yourself up to phone calls and email which you'll have to answer, including complaints
  • It can affect your ego if you tend to get your feelings hurt
  • You can't be a jerk, be sneaky or try to scam your customers, because they know who you are

Closed Door

Closed door just means you never let on to how large your enterprise is. There are varying degrees and not all closed companies will apply to the bullet points below.

You may publish a phone number or email address on your site, may have a vague “about us” page, fake “employees” that do the customer support (it's just you) , perhaps even some fake job listings. I did this. And it worked for over a year before I decided to “come out”. I wanted my company to look larger than it was. This allowed me to basically have no real responsibility to my customers, since you can hide behind corporate business decisions for a corporation that doesn't exist. You can read more about this in my confession posting: Hiding behind a corporate façade

But closed door companies don't have to be fake about who the owner is or who answers the phone, though they may choose to. The important part is that no one knows that it's one person, 15 people, or 100 people.

Advantages of a Closed Door startup:

  • You can protect your privacy. No need to use your real name or phone number
  • You can make your company look larger than it is. This can help in leveraging business deals down the road.
  • You can make bad decisions and play them off in your customer support as some corporate decision beyond your control

Disadvantages of a Closed Door startup:

  • You may have to keep up the appearances that you're a larger company, and can sometimes be expensive.
  • The connections you make with customers aren't authentic if you're using a pseudonym.

No Door

A no door startup publishes no contact information. There is no way in. No support channel. No information about the company, other than the products to buy. Basically your site is a vending machine.

Advantages of a No Door startup:

Disadvantages of a No Door startup:

  • It's up to you to decide how your product improves, since you'll get no feedback
  • No connection at all to your customers
  • It's difficult to maintain, since the customers will sometimes need to communicate with you or see your business email or address
  • How does the customer get a refund or negotiate a bulk discount?

Why you need to maintain your choice

Once you start doing business in a certain way that exposes your identity, it's near impossible to take it back. With the internet and caching, and the memory of customers, you can't hide again. This only applies to those in a Closed or No Door startup. Once you go from No Door to Closed, you're opening up a little more, even though not fully. Once you go from Closed to Open, people will most likely remember you, and any blog posts or other public displays will live in some persistent cache like the wayback machine. So there's no going back to Closed if you're Open… almost. But, I did it. I'll tell you more about that sometime.

Next post: Don't let them know you're alone

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