Non-Competes in a Down Economy

I keep inching and inching into the beat of my colleague, Ray Capece of Venture Files, but I think it’s pretty important and weighty times for web professionals and small business owners alike. Unlike anytime in our history, the uncertainty of the future of our world and country are great.

Everyone is speculating about what the economic downturn bodes. Some Evangelicals I’ve talked to think that the investment of the Federal government into banks represents something akin to the fulfillment of end-time prophecy regarding the mark of the beast.

Others more focused on geo-political analysis believe we are seeing the end of the American Empire.

All of this is speculation and may or may not have merit. We simply don’t know. However, what we do know is that people are losing jobs, including in the web industry. We do know it’s hard for people to sell their homes without walking away still owing a mortgage. We do know that the impending baby boomer retirement wave just got pushed back.

A lot of companies, particularly smaller ones, like to use non-compete clauses to ensure that good help doesn’t go to a competitor when that help leaves. But what does that employee do when they are laid off and still have a non-compete?

While I will give my disclaimer that I am not a lawyer, I will say that anecdotal evidence suggests that non-competes are mostly unenforceable. Most laws are drafted in such a way that non-compete only have grounds when trade secrets are in play but countermanding court rulings suggest that no company can restrict someone from making a living.

Talk to your lawyer if you are unclear. At the end of the day, I suggest staying in a stable job if you can at least for a year or so until we put some distance between now and then. If you absolutely must leave, you probably don’t have to worry about non-competes with the economy the way it is. Take the job you can. Just don’t go sharing the information specific to the company you left with the company you are joining. That would be competitive and would probably be enforceable.

Also, if you can, honor your non-competes because it will speak better to your character. Sometimes it’s not possible. I get that. But all things being equal, if you can honor your non-compete, do so. When I left b5media, I was under a non-compete. In fact, I still am for another month or so. After my announcement, I had a number of blog networks approach me asking me to come work with them and I turned every one of them down because I made an agreement that I very well could stand by. So I did.

Don’t Quit that Job Just Yet

The economy has everyone shaky, even those in the web space who have been largely unaffected, so far, by the ups and downs in the market. The Web market is largely filled by companies who have, at best, private equity via venture capital or angel funding, or they simply are bootstrapping and don’t have any outside investment.


Photo by Egan Show

The economy has everyone shaky, even those in the web space who have been largely unaffected, so far, by the ups and downs in the market. The Web market is largely filled by companies who have, at best, private equity via venture capital or angel funding, or they simply are bootstrapping and don’t have any outside investment.

Times are tight, but even in the VC-stage where a company might have anywhere between a million dollars in investment capital to $35M or more, the money really isn’t that big in the grand scheme of thing and the funding is privately held. Mostly.

Here in Baltimore, VC money flows toward Biotech companies where significantly higher investments are made in comparison to small investments in the web space. Obviously, biotech has a higher overhead when it comes to research facilities, labs, expensive chemicals and doctoral employees. Web startups deal with much smaller costs like commodity priced hardware, and much cheaper salaries. Again, by comparison. Biotech is drying up, but web investments continue to happen.

However, just in the last three days, at least three people I know in the web space have lost their jobs due to the slowing economy. We’ll probably see more of it as well. eBay, who is admittedly a public company and outside the realm of the “typical” web company, just announced a 10% reduction in their workforce. That’s not going to be the end.

The worst time to try to change jobs is right now. If you are able to get a great job, you’re going to be subject to a last in, first out layoff policy. It’s likely anyway. Nothing is ever guaranteed.

If you’re independent, you may very well encounter a slowdown in business (so I hope you’ve saved!), but you probably aren’t going to fire yourself. Now would not be the time to start that practice.

Conflicting recommendations exist. Some recommend that work is going to be hard to come by in an entrepreneurs world, so flee for stability and medical benefits. The other side says, as I do, that work is going to be hard to find and if you get it, you’re going to be far from stable.

Be very careful how you proceed. Make sure you have a backup plan. Try not to panic. Hunker down for the long-haul and do what you can. Don’t let the economy frighten you but instead, lean on your strengths and make money how you can. It’s going to be tough for everyone, myself included, but there will always be a demand for quality people in essential positions.

If you’re in a stable “day job”, I would not recommend quitting now to go the entrepreneurial route. It’s going to be tough going. However, if you’re already there, stay there and kick some butt. It will be slow. Times will get tough. But you can survive!

You Must Be Somewhere

It’s 2008 and with 2008 comes technology. It’s awkward, I realize, for some small businesses to justify the use of social networks, blogs etc. After all, how can a small business trying to remain profitable encourage employees to waste time on Facebook?

Please Help

We think of companies like Dell and JetBlue as examples of companies that “get it”. Even this weekend at WordCamp where I hammered the ideas of Marketing, Message and Brand, these companies came up as examples of companies engaging in the social space, including blogs.

But these broad examples are still the exception to the rules. Most companies still don’t realize that they need to be in the space, engaging with not only customers but possible customers.

I met one gentleman this weekend who owns a construction business but is an English major. He decided he would start writing DIY and home improvement stories in the form of a blog and is making big waves.

I’d say most home improvement companies don’t blog. They probably aren’t on Facebook. Probably not tweeting on Twitter.

There’s a company here in the Baltimore area that has a radio spot. In the radio spot, the owner says he personally goes to every job site every day until a job is done. When that’s the way most companies operate, it’s easy to think there is no time for social media.

Here’s the secret sauce, though, that many are missing. Your customers are behind the walls of social networks and on blogs talking about you somewhere. Trust me. You can’t afford not to be part of the conversation, and there’s no legitimate excuse not to participate.

With the economy the way it is, it is truly a cheap way to market, do public affairs and drum up business. Why wouldn’t you do it?

5 Things Small Businesses Can Do To "Be Green"

The last few years have really seen a push toward making everything “green”. Generally this means supporting efforts and organizations that help the individual offset their “carbon footprint” or the environmental impact they have on planet earth. On the business side, large companies in the past did things like installing systems to make their buildings more energy efficient or improve sustainability. What characterizes a green business is that it is run in such a way as to conserve natural resources, eliminate waste and remain ecologically in balance. So where does that leave small businesses?

Small businesses which comprise up to 97% of the businesses across the United States (Source: SBA) have been kind of left out because it requires large investments that are not really feasible. In support of “Green Week” here at Technosailor, we have taken a look at different ways small businesses, even a one-person shop, can “be green” while not negatively impacting their bottom line. We have come up with five simple things that businesses can do to “Be Green”.

Promote Telework at least one day a week

During these hot summer days, running the A/C in many offices is extremely expensive because of rising fuel prices. As winter will be fast approaching, heating bills will be going up which means you might have to raise prices or not hire someone because you can’t afford it. Keeping the power off and having everyone telework from home or a coffee house at least one day a week can really cut down on the impact employees have on overhead costs. If you are a small firm you are probably utilizing services (e.g. web conferencing, VPN, VoIP) that make everything virtual, so having people work remotely might not be a far stretch.

While many offices still need to have people in the office for meetings, smarter scheduling can still keep the “Water Cooler” environment that all business need in some way. A good way to start is to have it come from the top down as a mandate that Monday or Friday as work remotely day. Tell everyone that power and AC/Heating will be shut off that day so that they know if they come into the office it isn’t going to be a comfortable ice box with everyone around. As more people get into the routine you will be surprised how fast you could take this to two or three days a week and really keep energy costs low.

Offer mass transit voucher/reimbursement program

Living here in the DC area there is a pretty good mass transit system with the Metro. They have a program called SmartBenefits where you can actually load their Metro Cards with a certain dollar value. This can also be done as a pre-tax benefit and you could reimburse the employee because they have the incentive to use mass transit instead of their car.

Offer incentives to be eco-friendly even outside of their job

Now metro and buses are not everywhere and not everyone lives right near easy access mass transit, so people must use their car. In this case, many companies have begun to offer a subsidy for using a hyrid vehicle. For example, Livingston Communications CEO, Geoff Livingston offers his employees a $1000 subsidy toward buying a hybrid vehicle.

Recycle Office Equipment

If you have operated your business for any length of time you probably have office equipment that is collecting dust and if simply thrown away would hurt the environment. There is a great site, called UsedComputer.com, that has all the resources on where to take your electronics. Officefurniture.org has a list of resources on what to do with old printer toner and office furniture that can found here.

Buy Green

This is the way to support other businesses that are going green and in a way motivates others if it becomes a preference by many companies as part of their vendor selection process. SmallBizTrends.com refers to two studies done on the impact of whether people care to “Buy Green”. They found:

A recent survey by Landor Associates suggests that the majority (58%) of consumers do not care whether a business is green. According to the survey, that still leaves 42% who are interested to some degree in the environment.

Another set of market research “” more extensive “” was done by the Natural Marketing Institute for LOHAS. LOHAS stands for consumers with Lifestyles of Health and Sustainability. The LOHAS research found that 23% of the U.S. adult population is “œclassified as a LOHAS consumer, meaning that they have a profound sense of environmental and social responsibility.” These are the people most likely to buy green products.

Twenty-three percent of the U.S. adult population is no shabby number “” it exceeds 50 million people. So obviously a decent-sized market exists.

Good examples of this are buying biodegradable office supplies or looking for companies that incorporate green behavior as a part of their production/manufacturing process.