Well it has been a weird few weeks here!

I am going to share some personal painful stories here…

Two businesses (not adbank) have both had issues of employee theft which is a first for my business! We are not talking hundreds of dollars but over 6 figures!

I won’t get into the exact details but one is solved and one is in the process of being solved.

The key anytime we have a major f-up in our business is to dig in and understand why it was allowed to occur, if the risk of it occurring again is worth putting in stronger systems.

This article will cover the 2 scenarios the systems that were in place and why they failed plus the 5 keys everyone should do if they have any team members with access to hurting your business financially.

Swiss Cheese Model for Losses:

One of the ways I like to think about the risk mitigation systems inside my business is the Hazards – Losses path through multiple layers of swiss cheese. No system can be completely bulletproof but the idea is if all layers are in place and working the probability of all holes lining up is very low.

Failure 1: Speed vs Control Accepted Risk

An employee wired himself funds, oversight was not in place fast enough.

There were 3 layers of mitigation

• Mitigation #1 – Trusted employee & controlled access
  • Never a sufficient mitigation on its own!
• Mitigation #2 – Accountant monitoring monthly numbers
  • The accountant was unfortunately months behind not revealing the problem.
• Mitigation #3 – Bookkeeper/Controller onboarded
  • The controller for the business was not up to speed fast enough leaving a window of time where things would go undetected.

In the end we were not pushing the pace fast enough on the 2 financial oversight systems resulting in a window for theft to occur.

Although this was the far larger of the 2 thefts it is one where no major systems upgrades are needed as there was some acceptance of risk due to prioritization and low probability of someone repeating with the systems that were too slow to get in place now in place.

• Note – All funds from this theft have been recovered + consideration for time/fees.

Failure 2: Execution

Although the dollar amount is smaller than failure/theft #1 this one has me much more upset.

This was a known risk we had put many barriers against but the systems all failed in the same way to allow this to occur.

• Mitigation #1 – Trusted long term team member & controlled access
  • Clearly this is not enough to rely on blindly! This employee has been with me for YEARS and involved on multiple projects.
• Mitigation #2 – Daily Revenue and Expense Monitoring – Temporarily Not Active
  • During this time we had taken a break from the daily expense tracking due to workload in other areas
• Mitigation #3 – Weekly unit economics review – Didn’t Validate
  • This one is frustrating as this practise was created with the intent of being able to quickly detect any issue however the theft was paired with forged numbers that were not validated. Human error on compliance to the process for validation of the numbers was the reason this mitigation failed.
• Mitigation #4 – Monthly PnL statements and review – Not setup on new system
  • We have been in the process of upgrading our proper monthly PnL and as a result were not in a position to review them. Getting these completed slipped down the priority list and as a result allowed this issue to continue.

Note – All funds have not been recovered, the length we will go to will be unreasonable 🙂

5 Steps to Take:

• Financial Risk & Access Control Matrix

1. 1. 1. There are a lot of potential attack vectors. Having an organized control list of all the places that someone could impact you financially and then understanding who currently has access is key. There are the obvious locations like bank account, paypal but then you also need to think about the revenue sources Amazon Account, AdSense account etc. Plus, don’t forget places where funds could be improperly sent from Fiverr, UpWork etc. Don’t forget your websites that make the money, swapping out an affiliate link on a few pages can be another source of theft that is harder to detect.

• Agreements Updated

1. 1. 1. Ensuring compensation agreements are in writing is key to ensure there can be no debate about the amount of funds received.

• Have Contact Information Handy

1. 1. For anyone with access to money you should have accurate information on them including name, ID, phone number, address etc.
2. Proper Login & Password Management
   1. Managing logins for a team is a daunting task! 1Password and LastPass are the tools we use for a couple different projects. The key is to be able to quickly turn on/off access while controlling the ability to provide access through either the tool as a user (with the login still in the password management system) or shared access via a password management system. Strong random never reused passwords and 2FA activated whenever possible goes beyond just internal theft but is one of the most basic steps to avoiding theft from hackers.

Conclusion:

I hope you haven’t experienced any issues like these. My hope is sharing these unfortunate events and what I have learned will be helpful in preventing future problems for you or if problems do occur arming you with what you need to resolve quickly.

Please share any other suggestions on how to help protect your business!

In 2012 I decided to document my journey of building up one of my online businesses and this site was born.

At the time I was working hard as an Engineer/Manager at a large Oil and Gas company and I didn’t want anyone there knowing I was grinding 3-4hrs/night building up my online businesses.

So I had a problem…use my real name or an alias.

I would be interested to hear feedback from the many long-time readers… apologies if anyone feels tricked!

Until I was 0% in my career I wanted to give and appear to be 110% there.

As my wife likes to remind me… I suck at lying because my memory is so bad I forget even the simplest of white lies. I almost revealed twice I was about to propose to her the day I did…I moved up the timeline so I didn’t reveal it.  

So I needed a simple solution to an alias that had everything about me being true but not as easily traced back to my employer.

So everything I have ever shared is accurate with the exception of my last name.

Haver no more… real name is Jon Gillham… but everything else is the exact same!

An Alias – NOT Alter Ego

If you haven’t seen Terry Gene Bollea talk about his alter-ego/alias Hulk Hogan it is pretty hilarious and recommended. I am sure if I had planned to create an alter-ego/alias it would have been a more exciting mystery man then a spreadsheet and systems loving family man who builds online businesses!  My point is it is not an alter-ego only a last name change.

Alias (everything but my passwords shared)…

Not Alter Ego…

So… Why Share Now?

I have my most ambitious project ever underway which has been going on behind the scenes for a while involving 5 new in house staff/co-founders including one who co-founded and sold a Digital Advertising Network which sold to Google for $xx,xxx,xxx!

My plans for a long time have been to untangle the alias as I have always had some anxiousness about having the alias and explaining to people in person my last name is Gillham not Haver.

Now is as good a time as any to make this change!

What is the new project?

I have eluded to it a few times throughout the year about a bigger project in the online space and we are very close to being able to share more details. Blockchain technology is one of those things that once you grasp it you realize it is going to change everything (especially disrupt middle-men).

A team has come together around a unique application of blockchain technology and applying some business model innovation to take a GIANT swing at the most interesting problem I have ever tackled. Our development team is working away and the alpha version is closing in on being done with more details to follow.

There are few times in life where the idea/team/resources/skill-set & opportunity all align and I am excited to see what we can do!

If you are interested in projects in the crypto/blockchain space feel free to contact me and I can share more details.

Does this change anything here?

Nope – same spreadsheet, data, systems and online business building focus moving forward!  AuthorityWebsiteIncome (although I am not a fan of the name) is a ton of fun to geek out on projects and try to provide some useful guides to people building online businesses.

It has been one year since I left the day job and pursued my online business activities full time.

I wrote a very in depth post on how I got to the point of quitting my day job – https://websiteincome.com/quit-my-job/

This post is going to cover…

How Have My Results Been Since I Left the Day Job?

I will break the results down into 3 parts…

1. Have I achieved my 2 main reasons for quitting?
2. Financial Results since I quit?
3. Have I successfully mitigated my concerns about quitting?

My Main Reasons for Quitting:

I had 2 MAIN reasons for quitting…

• See What I Can Do on My Own – Online entrepreneurship has a lot of opportunities I am excited to explore. I may or may not regret this decision but I am 100% certain if I never took a shot at building something on my own I would always regret it! (from my post 1 year ago)

• • Results after 1 year – I am definitely aligning the pieces of my business between projects and people on my team to be able to make a bigger impact. I would say that I haven’t achieved as much here as I would like but believe the combination of building an amazing team and getting heavily involved in some BIG projects has me moving all pieces of my business in the right way to make a big impact.

• Ski/Bike/Hike With My Family – My oldest child will be 36years old if I were to retire at 65 (3 years older than I am now) and the number of hours I work per day between now and then were not going to go down based on the path I was on. But the main reason is I simply wanted to ski, bike and hike with my family in my hometown! (from my post 1 year ago)

Results after 1 year – I have without a doubt massively increased the amount of time I get to spend with my family since leaving the day job. Now being home routinely between 3:30 & 4:00 vs 6:30 (on good days) we are able to do an outing almost every day depending on the season (beach, hike, bike or skiing). Plus flexibility to take time off for activities whenever it makes sense for the family. I do believe I still work too much to have a proper balance on the health side and see opportunities for improvement here.

Overall both of the main reasons I wanted to leave my day job to pursue my online business full time have been moving in the right direction. I am especially proud of the amount of time I get to spend with my family.

Financial Results:

“enjoying” working online full time is certainly great but how have the businesses results been? They have been solid, hitting my stretch targets (barely) and having a lot of success with a few new projects.

Have I successfully mitigated my concerns about quitting?

I had been working insane hours (80+ combined day and online job) and pushing myself VERY hard in the couple years before I left the day job. I had some concerns that the loosening of my schedule and the loss of a single clear goal would negatively impact my business. Here are my thoughts on the results…

• Getting Mentally Soft – For the last few years my schedule has been a little bit insane. Approx schedule… wake 6am, leave for work 6:30am, work 7am-5:30/6:00, Home at 6:00/6:30, family time until 7:30/8:00, work from 8pm-11pm(sometimes much later). Following this schedule was TOUGH and it, like training for anything, resulted in me being able to be disciplined about working. Will I now go soft since I won’t be working the same number of hours?
  • Results After Year 1 – I would say I definitely have gotten softer. My crazy dedication to working EVERY night no matter how tired/sick I was has slipped. Now I take nights (even the occasional day) off. Some would say this isn’t a bad thing but I do think I am getting softer as a result!
• No Single Inspiring/Driving Goal – Achieving my goal of leaving the day job had become an obsession and now my current goals are less tangible… will my business not have a stimulating goal and as a result be directionless?
  • Results After Year 1 – The goals have become a little more project/business specific. There is a central overall goal for myself which I don’t discuss publicly but am working towards. Because of the new focus on building a business I am continually inspired to build something awesome.
• Playing Not to Lose – For those that play/watch sports we all have experienced/seen a team take the lead and then play not loose vs playing to win. Will I now play not to loose vs take bigger swings?
  • Results After Year 1 – This one I am very happy to say is not a problem. I would say I am becoming less risk adverse and need to have the controls in place to make sure I don’t risk too much. Over the last 8 months I have put more money to work, hired more staff and started more projects.

What have I done?

Here are the major changes I have done over the last year…

1. Grew my in house team from 0 to 2 full time and 3 summer interns
2. Started a couple big new projects
   1. ContentRefined.com
   2. One investment vehicle I will talk about more later
3. Increased my rate of site building
4. Focused more on education and extending my time horizon from only a few years to much longer

Summary

I can say with certainty that leaving my day job was a great decision for my family and so far 1 year out my pocket book as well.

However, the fears I had around getting soft and not having a crystal clear goal I don’t think I have sufficiently mitigated. But overall I am extremely grateful for the world we live in where running this type of business is possible. The ability to both throw myself at a business and not sacrfice time with my family is pretty amazing I am extremely grateful for that!

If you are working towards a similar goal please know it is possible and can be done faster then it took me 7years to reach. BUT… it is not easy… I want to stress that it took me 7+years from when I first started and ~3 years after I got serious about building my business to hit the numbers I needed to hit.  Good luck to anyone looking to do the same!

This post is about a handful of rules I have tried to adopt when evaluating new opportunities. I don’t want to “fight” the bright shiny object syndrome as many new ideas are worth pursuing but this post is about how to “control” the urge to start too many different things!

Chasing the bright shiny object is a big part of what I do but I can’t endlessly pursue every exciting opportunity.

So this post is about a handful of tricks I use to try and determine if an idea is worth pursuing or not.

First Step is Admitting We Are Not Rational! In a perfect world I would put each new project on a list and use some calculation of NPV or IRR and determine the priority of the project. However, my brain is not that rational… the emotional side will skew the assumptions to the point that these calculations will turn into highly precise but inaccurate BS so I have made a handful of rules that try to trick/use my emotional brain to come up with an efficient way to get to the right decision on pursuing an opportunity or not! (more…)

Like most of us with an entrepreneurial leaning I enjoy listening to a lot of audiobooks and podcasts related to business and self-improvement.

There is one recurring message from wildly successful people and many success guru’s… FOCUS!

In this post I am going to argue why I don’t think the focus on a single business is the optimal strategy for many. It may be the right strategy for some but based on my goals (and depending on yours) I don’t think it is the right strategy for everyone.   (more…)