There is no place to hide
Tons of strategy books have been written about measuring performance and making people accountable. I propose that startups need to take this to the extreme: everyone’s performance is fully visible to all, with no place to hide.
This creates high performance culture: the ones not performing drop out without needing to fire them, while high performers enjoy the continuous learning and an environment that moves on. Also, if executed well, the ones leaving will get a good reference: they were part of the high-performing team and in any event are well above the standard.
In this culture, it is ok to fail. Failing is different to low performance. Consequence management needs to be clear and quick. If you allow people (and especially yourself as a manager) to hide, it will spread.
Any downsides? It is difficult to implement in a sophisticated manner, and can easily kill creativity – and even create fear. Performance means different things by environment, and that needs to be taken into account carefully. You run Navy SEALs different to a symphony orchestra.
My experience is that the most competent and creative people will love this – and ultimately demand it to stay and be happy.