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Hiring Help And Retaining Your Secrets

 7:13 pm on Oct 25, 2006 (gmt 0)

I didn't want to get totally off-topic in the dumb mistakes thread where Hobbs says he's putting off hiring help because he's afraid they will turn into competition.

I currently have 10 people that I either pay or are volunteers doing the majority of the work involved in running/keeping up with my sites. All I do is write the site newsletters(which get added as new content) and work on other new content of my own to add or other new projects.

Of the 10 people, only one of them even knows how the sites make money. But he wouldn't know the first thing about starting a site of his own. One guy sorts content that gets submitted by visitors, crops and sizes the pictures when needed, then passes the info along to the next person, our writer who gets everything ready for our html person, who then takes the edited content and puts it into html code and passes it along to the next person who only knows enough html to be able to copy and paste the code onto the appropriate pages or pre-written templates for new pages. That person then lets me know that pages are ready to upload and I go upload the fresh content since I'm the only one with log-in information. Volunteers help keep up with links(usually in exchange for being the first link) and volunteer moderators take care of the message forum.

You can have help without breaking the bank or giving away your secrets. Just give each person a small job so they never see the big picture. Since each part of the job is so simple, you should be able to find someone to do that part pretty cheap. A little over 10% of what I make goes to pay ALL help who do probably 90% or more of the work.



 7:18 pm on Oct 31, 2006 (gmt 0)

A common theme in business success stories is how they prospered once they shared lots of information with their employees. Once they explained what the business was trying to do, how it made money, what the cost problems were, what the financials looked like, etc., the employees began to use their brains to solve problems and kick the business into high gear.

That wisdom doesn't always apply, of course, particularly when employees/contractors have low commitment to a business and the barriers to entry as a competitor are very low. Still, it's worth thinking about - if you aren't engaging the full brains of the people that work for you, you are accomplishing less than you could.

I've used non-compete agreements with reasonable success; I only started doing that after a key employee (in a previous business of mine) started up his own company by working a deal with one of our clients. Poor ethics on the part of both, perhaps, but it can happen.

Non-compete agreements aren't always enforceable in general, but the specifics can be (e.g., stealing customer lists, trade secrets, etc.) and often the mere threat of a lawsuit will keep defectors in line. I know that I declined to hire applicants with non-competes a few times simply because I didn't want to get involved in a messy situation or have an employee that was distracted by a legal battle.


 7:46 pm on Oct 31, 2006 (gmt 0)

spaceylacie - I'm with you brother! Many of the things you say about dishonest people is right on. I too started out trusting people but over the years I've been screwed and have learned to watch my back...I've hired people who are not too "business savy" - it has hurt my growth a little bit but is worth it. I recently took a chance with a new employee though that is smarter than the rest - guess because I'm large enough where I don't care as much. You are right on target in many of your statements...


 9:48 pm on Oct 31, 2006 (gmt 0)

Napoleon Hill talks about this in the famous book called Think and Grow Rich. He suggests you should let employees know everything you do. Otherwise how do you expect them to do the best, if they don't know the end goal?


 11:08 pm on Oct 31, 2006 (gmt 0)

I'm wondering if this is the key issue when deciding whether or not to share all, if your business is established enough, go ahead and tell all. They have virtually no chance of catching up with you even if they tried. On the other hand, if it's a two year old business suddenly doing well, it would be easy for a competitor/ex-employee to "catch up" if they set their mind to it.


 11:49 pm on Oct 31, 2006 (gmt 0)

What about stock options and profit sharing? Anyone use that for loyalty?


 3:59 am on Nov 1, 2006 (gmt 0)

Gaining loyalty, using non-compete contracts, etc. These seem to miss a very important consideration, IMO.

People like to talk - with friends over lunch, with family on Thanksgiving day, etc. People like to tell others interesting & juicy tidbits - it makes them feel important.

When I started my first site, a local site, I didn't tell anyone it was mine or about my future plans but I did hire a lady to help me with preparing content.

She was learning and putting things together in ways I didn't realize was happening. Then one day I was in a conversation with someone who told me about this new site and how it was making money and how the owner of that site was making money when people clicked on links, etc. This guy had no idea it was my site he was telling me about, but he sure knew a lot of things about my site that I had not revealed to anyone.

It turns out he works at the same company as the husband of my hired help and they talk a lot during lunch breaks. What you don't know will shock you sometimes.



 4:04 am on Nov 1, 2006 (gmt 0)

Napoleon Hill talks about this in the famous book called Think and Grow Rich. He suggests you should let employees know everything you do. Otherwise how do you expect them to do the best, if they don't know the end goal?

I don't think that advice has a blanket application. There are certainly things you don't want an employee to know.

Wasn't it just recently that some Coke employees were arrested when trying to sell secrets to Pepsi?

If you've figured out how to make an adhesive to hold the top on your widgets, you probably want to keep that to yourself and let your competitor's widget tops keep falling off as soon as the customer gets them home. If you want to keep that from your competitor, sharing the information with your employees is a bad move.

Loose lips sink ships.



 4:06 am on Nov 1, 2006 (gmt 0)

I think intellectual property protection management needs to carefully dealt with in business. At the high end of the scale you have a situation like Google, and at the low end of the scale you have a business with a website.

There are several honest strategies. The first is recognise that the sum total of all the component ingredients forms an output that can [ or cannot ] be determined unique, by virtue of the introduction of those components by the business, to the business and it's owners.

Most good businessmen ask "helpers" "workers" "contracter" to sign a service agreement which includes "non disclosure" and "preservation of intellectual property"

In the event that you are using others intellectual property, you need to make sure, you can use it. By hiring that person, you should clarify that this is OK.

In order to enforce the contracts, business' must possess the means to have the process administered. So if you're small and weak in terms of financial backing , be prepared to be pillaged [ unfortunately ].

Lastly, if you make the secret soup with different ingredients to the next person, it doesn't mean you retain rights to it. So the outcome may be the same by a different method.

If you've got the money, see an IP attorney to protect your business.

Hope this helps.

btw - I'm no attorney.


 7:43 am on Nov 1, 2006 (gmt 0)

All I can say is, I started my own business so that I wouldn't have to work for a boss (actually, three bosses at the same time in one company) who kept the right hand isolated from the left. Had they developed a relationship with me as a person, rather than viewing me as a resource to be tapped as much as possible for as little as possible (and with as little information provided to me as possible), my sense of personal dignity might not have required me to start my own business.

When I left, that company's web clients looked me up and left too. I don't think their clients liked the atmosphere of micromanagement required by such an approach.

People are out to maximize their gain; that's business. Some methods of doing so are unethical. Gaining valuable business experience by working in the field is absolutely not in that category. Barring direct competition to yourself, why on earth wouldn't you want the people who made you rich to get rich too?


 1:36 pm on Nov 1, 2006 (gmt 0)

>>>> Besides attempting to prevent this from happening by spreading out the chores in such a way that no one person is privy to exactly how the site works, what are your other options?

Is there something so innovative and unique about the mechanics of your site? What are you talking about?

Or do you just want to hide the fact that the site makes lotss of money from everybody, especially the volunteers.


 1:46 pm on Nov 1, 2006 (gmt 0)

Barriers to entry are a key consideration in how much you can safely share. If you are a manufacturing company with a seven or eight figure investment in plant and equipment, or make products with a world-famous brand, the odds that one of your employees will go into competition with you are just about nil. (They could get hired by a competing firm, but that's a different issue.) So, in that case, sharing lots of information is relatively low risk, and can pay dividends when people start making better-informed decisions and suggesting new ideas.

In the case of a business that's primarily a website, there are far fewer barriers to competition. Sure, if you have years of inbound links, a great reputation, etc., that can be difficult to overcome. Still, the barriers to entry are much, much smaller and I the "tell everyone everything" approach entails a lot more risk.

A middle of the road approach might be to bring two or three people into an "inner circle" which has access to more information; these people would have to be loyal, with loyalty reinforced by better pay, NDA/non-compete agreements, and, perhaps, some kind of equity stake (shares, options, profit sharing, etc.)


 3:34 pm on Nov 1, 2006 (gmt 0)

You can sometimes convert a potential competitor into a partner. They are just starting out, and might well appreciate some help.

You might also look at those potential competitors and gently redirect them so they establish a related, but not directly competitive business.


 3:46 pm on Nov 1, 2006 (gmt 0)

I don't think that advice has a blanket application. There are certainly things you don't want an employee to know.

I think it should be a blanket. I mean, of course you don't want to give away banking information and stuff like that. But you should tell them all the tricks for running the company.

Wasn't it just recently that some Coke employees were arrested when trying to sell secrets to Pepsi?

Haha, c'mon, "secrets"? Wait, lets see, it's sugar, some more sugar, some chemicals, and, eh, coloring + water. That's pretty much the "secret". That whole "secret" recipe fad is just a marketing ploy to make consumers beleive that they are drinking something special, i.e. "secret", when in fact it's just poison in a can which is worth 2 pennies to make and sells for a buck.

I think maidix hit the point right on with employees' feeling left out and not involved when they are not "in the know". If you want to build a good working enviroment, treat employees like your close family. If you hide stuff from them, eventually they'll find out anyways, and then leave.


 8:49 pm on Nov 1, 2006 (gmt 0)

Is there something so innovative and unique about the mechanics of your site? What are you talking about?

Or do you just want to hide the fact that the site makes lotss of money from everybody, especially the volunteers.

Haha! I would like to think that my plan is very innovative. Right now I'm just in the building a foundation phase of the project and each component of my sites are working together toward an ultimate goal. I'm thinking it'll take about another 7 years to take the plan to completion. I figured about 10 when I started and I'm currently on track, if not a little ahead of schedule. Then I'll be able to take a break and let other people run the business. By then, it won't matter who knows what because they won't know what I did to build it. And even if they do figure it out and decide to start their own, they will have to go back to where I was many years earlier and start building their own foundation, not to mention costs that I am/will be investing over a period of 10 years that they would need to come up with. Without going through each of the steps and having the money for each one, I don't see how the business model would be feasible. Think I'm going to go announcing the ultimate goals so others can get a jump start on my idea, no way! Besides, what if my plan fails, then I'd have to listen to "See, we told you your plan was crazy and would never work."


 9:23 pm on Nov 1, 2006 (gmt 0)

Well, it's hard to say. A lot can happen in 7 years. Certainly WRT outsourced help, who due to a strong desire to compete for work from wealthy nations, seek higher wages and/or start their own businesses.


 11:02 pm on Nov 1, 2006 (gmt 0)

Good grief. I have no idea what you are talking about or trying to keep secret.
You're doing a great job.


 4:45 am on Nov 2, 2006 (gmt 0)

I think there are very few people you need to worry about running off and starting a business with your ideas...very few people have the stomach to be entrepreneurs. Protect yourself with contracts and such - and maybe keep only some extra vital information from your employees. The better they understand the business the better employees they will be, in my opinion.


 1:15 am on Nov 3, 2006 (gmt 0)

Excellent discussion everyone, and thank you spaceylacie for summing my fears so well.

Rogerd's point on barrier to entry sums how I feel about it, I'll repeat what I said in the AdSense forum:
The more I learn the less confident I become about how unique my accomplishments are.

How can you hire and work with people without teaching them how to take over what you are doing? How can you have peace of mind if you don't think too highly of your own knowledge? Don't get me wrong, I am very proud of the end product, it more than speaks for itself and more than stands out among it's competition, it's the inner kitchen that I am not too confident about not the dining hall.

Then comes the proprietary little things like the type of content management software you are using for example, I watch in amusement people in forums wondering how I am doing it, and none for years was able to guess :-)

I am thinking this type of fear is very specific to webmastering and cannot be ported to many other offline sectors, heck offline I am more confident and more fearless, there is a strong sense of vulnerability online, low barrier to entry, probably the lowest, 100 million sites? it is the lowest!

[edited by: Hobbs at 1:16 am (utc) on Nov. 3, 2006]


 9:33 pm on Nov 3, 2006 (gmt 0)

In my many years of experience online, I've rarely seen a business model that could not be duplicated. Google is one of the exceptions (for now). Even folks like John Chambers (Cisco CEO) state publicly that they worry about the folks who meet for lunch and design products on napkins.


 8:18 pm on Nov 6, 2006 (gmt 0)

Right on. Empower the individual in your own organization is the key. Sort of like how the ATM machines. It changed the way how we do transactions.

Keep up the good work Lacey. I am with you on this one.

Your sites are looking great!

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