Things I Love / Things I Hate #4: Trade Secrets, Transparency, and Lemonade Stands

Sonia Simone on June 20, 2016

When is it smart to keep your business’s “trade secrets” — and when should you blow them up? How much sharing is too much?

As I was writing a quick introduction to Rand Fishkin over on Copyblogger, I got to thinking about this “transparency” buzzword.

When is it good business to play your cards close to the chest — and when should you open up? How do we make the call about what we want to share, and what we want to keep private?

In this 29-minute episode, I talk about:

  • Where all of this “transparency and authenticity” buzz fundamentally comes from
  • My first law of the internet (this comes even before “do not feed the trolls”)
  • Deciding for ourselves where we’ll draw our privacy boundaries online
  • The power that can come from vulnerability (and my thoughts on timing)
  • Making sure the friction in your process doesn’t grind the customer to a dead stop
  • The value of some friendly “lemonade stands” along the path to the “big” purchase
  • Where successful companies get their best product ideas

The Show Notes

Sonia Simone: Greetings, superfriends! My name is Sonia Simone and these are the Confessions of a Pink-Haired Marketer. For those who don’t know me, I’m a co-founder and the chief content officer for Rainmaker Digital.

I’m also a champion of running your business and your life according to your own rules. As long as you don’t lie and you don’t hurt people, this podcast is your official pink permission slip to run your business or your career exactly the way you think you should.

Note: Links to extra resources are in the Show Notes!

It’s time again for Things I Love / Things I Hate!

As I’ve been doing, I’m going to share lots of details on the “Love” part, and then some general principles and practices for the “Hate” part. This week in particular, I like the business that’s on my “Hate” list, but I feel they’re shooting themselves in the foot by clinging to a business practice that does not seem to be serving them.

Let’s start with Love!

Rand Fishkin and radical transparency

I wrote last week on Copyblogger about Rand Fishkin, who founded Moz, which is an SEO software service — at least, that’s the current incarnation of his company.

Every time I run across Rand he sort of startles me. There’s a lot of talk, especially for web-based products and services, about transparency. It’s a buzzword, for one reason:

If you lie on the internet, you will get caught.

This is as close to being a natural law as it gets on the web, because of the nature of it.

The word “web” of course points to the fact that everything is connected to something else. It’s what makes the internet work — it was designed way back in the day when Al Gore, yes, signed off on the creation of DARPANet, to be interconnected so that you couldn’t take it down through an act of sabotage.

Virtually everything on the web is connected to other points on the web through multiple points.

So if you say one thing on your super tiny private blog that has 8 readers, but you’re doing something different, you might get away with it for awhile. But as soon as you start to be better known, as soon as you do anything at all remarkable, good or bad, it will get shared.

This is how people get fired or sued for posting their bad behavior on their private Facebook account, or on a Twitter account that has a dozen followers.

Privacy online is very, very difficult to maintain, because it’s only as strong as the promises of every single person who can see your stuff.

So you have two options.

One, you can be extremely consistent. For example, you may choose not to share current photos or other personal information about your family online. If you make that choice — don’t do it at all. This is a legit choice — “privacy” is not the same thing as “keeping secrets.”

I also happen to be a fan of being private about your personal stuff. I don’t particularly get into my personal details online, whether or not it’s in a quasi-private setting like Facebook or a more public space like Twitter. I’m sure someone could find things, and that’s fine, but I don’t go out of my way to share.

So we all draw some kind of line, hopefully. Oversharing is a thing. I don’t need to see your sandwich every day. We’re good.

Vulnerability vs. privacy

One thing many folks are private about is vulnerabilities.

Insecurity, depression, grief, uncertainty, mistakes.

And my opinion is: It’s ok to be private about that. It’s completely your choice. But sometimes you can claim a tremendous amount of power by revealing your vulnerability.

Brene Brown is the champion of this, I think she’s very smart about it.

Choosing to be open about certain kinds of vulnerability — emotional vulnerability, insecurity, that kind of thing — tends to have the effect of unleashing a ton of energy that you were using trying to pretend you were more badass than you actually are.

So let’s talk about Rand. He’s very open about times when he was CEO of Moz where he made poor decisions. We all have blind spots, we all have times when we don’t follow our own advice. Rand just talks about them, where most people don’t.

In that, he does a couple of things. First, he defuses the situation so that no one can throw that stuff at him. It’s all open, so it can’t be weaponized.

Second, he opens up the opportunity to be of service and value to other people who have made the same missteps, or who are on the verge of that. That’s one of the reasons — that, and the fact that Rand is a really smart business owner who knows a lot of stuff and teaches it well — that Brian Clark invited him to keynote our event in October. Rand will give you the whole thing, not just the Instagram-ready pretty highlights.

Trade secrets

The other thing about Rand is that he’s been in the SEO game so long that when he started, it was all about trade secrets.

SEO professionals figured out how Google was working. Google itself, and the other search engines, were insanely cagey about how they ranked pages. So there was a lot of reverse-engineering and making educated guesses based on patent applications, that kind of thing.

This still happens in SEO, both on the SEO professional side and the search engine side, but Rand’s phrase for it is, “a pane of glass versus two tons of steel.”

One of the insights that Rand had, joined by folks like Danny Sullivan at Search Engine Journal, was to go ahead and publish any trade secrets that they found.

If they figured out something significant about how the search algorithms seemed to working, they told everyone. Matt Cutts came on the scene at Google with a more transparent approach, even though they certainly don’t reveal everything.

Over time, instead of SEO being about a lot of tricks, it started to become about just publishing quality content instead of searching out 10,000 different ways to produce spam. Which, coming around to 2016, turns out to actually be less trouble, honestly.

“Don’t take shortcuts, they take too long.”
-Sonia Simone

So Rand, and others like him, took this idea of “trade secrets” and turned it on its head. They revealed all of them — and it turns out that, no matter how many good SEO blogs you read, there’s still work involved, and people will pay good money to others to either do that work or to produce high-quality tools that will help make the work easier.

The idea is to uncouple your business model from keeping trade secrets — because, remember, secrets are really hard to keep online. They leak from one point to another until they find open water, and then you’re done.

Now, maybe you’re not as brave as Rand. I don’t think I am. One thing I will recommend: When we’re talking about airing your own screw-ups in public, I like to wait until I’m on the other side of the crisis. Crowd-sourcing solutions to problems that you’re still wrestling with has not, in my experience, been very helpful. Coming clean about lessons learned after the fact, though, is helpful, I’ve found.

If you are going through a tough patch, talking about it definitely helps, and getting some other perspectives helps — but get the perspectives of people you trust who love and respect you, not the peanut gallery. In my opinion.

Now the Hate part

So switching gears, I want to talk about a little online business that’s trying very hard to maintain its secrets, and from my vantage point, it doesn’t look to me like it’s serving them.

This is a company that’s come up with a particular kind of drawing. Come see me in Denver this October and I’ll show some to you — it’s neat.

So these artists invented a kind of proprietary structure and teaching for making a certain kind of drawing — and their business model is to teach the method to teachers, and then those teachers teach it to people like me who want to learn.

I found out about it by buying a little kit of materials — the right pens, the right paper, and then the box was decorated with these drawings, making the kit totally irresistible. I saw it at my local art store and it kind of jumped into my basket. That happens to me a lot at the art store.

So I think there are going to be instructions, right? No instructions in the box.

No problem, I go to the website. No instructions on the website — it says, “Find a local teacher.”

Just for grins, I look up a local teacher. But the two teachers in my area aren’t currently teaching — and here’s where the business lesson comes in.

This company has an idea about a business model: Train the trainer.

They forgot the most important part of that business model — all the revenue comes from people like me, the eventual students, and you have to understand that person’s path to purchase. Looking around at teachers trained in this method, only a few are taking students. It looks to me like a lot of the rest have given up — and I think it’s because they’re not doing enough to facilitate the customer journey that gets someone interested in the ideas to come on in to a class.

I use the term customer journey, we’ve written about it quite a bit, and we get in-depth on it inside our Certified Content Marketer training, because if you don’t get it right, there’s no fuel for your business.

In a nutshell, you have to know what the paths are that bring people from not knowing anything about you to making a purchase, and then past that through a wonderful experience so that they talk you up, they refer you, they do business with you again, all of that good stuff.

Keeping trade secrets — this little drawing company has certain types of drawings that they ask their teachers to only teach in a face to face class — by its nature puts up barriers to customers.

If these barriers can be smoothly and reasonably navigated, that can be ok. I’m not saying trade secrets are always bad. But you have to understand that you’re creating friction.

Now, you can’t keep secrets on the internet. So the instructions and how-to videos and all kinds of things are all over YouTube, Pinterest, Flickr, etc. So you haven’t actually kept your trade secrets at all.

“The Net interprets censorship as damage and routes around it.”
-John Gilmore,, technology pioneer and one of the founders of the Electronic Frontier Foundation

All you’ve done is created friction on your customer journey.

What you can do instead is to create lots of paths that move the customer pleasingly to the destination you have in mind. And you can also create revenue models that the customer wants to participate in, think of them as little lemonade stands along the side of the path. It might not be the eventual purchase, it might not be The Big Thing you sell, maybe it’s some micro purchases along the way.

For example, a lot of potential customers for this company don’t have thriving teachers near them — at least in part because the customer journey isn’t bringing in enough new students for the teachers. So maybe it would be wise to facilitate some great ways to let teachers teach online. Maybe this little drawing company could become a virtual workshop space, with teachers using their site to teach both micro classes and more comprehensive ones.

They could have a quick workshop on values, which are the lights and darks in a drawing — standard stuff. One on composition. Whatever it is that you see people are having problems with, you can create workshop on that. Which is one of the super nifty things about education as an online business, you can often put these together very quickly if you have the right tools. Cough, Rainmaker.

Instead of pushing every student into a half-day workshop at around $50, which some people want and some do not, look for what the students are looking for, and how they’re looking to get it.

If you have a student who takes, let’s say 3 or 4 $10 mini-workshops online, that person is super primed to go to a half or full day session face to face. And they’ll really get something out of it.

This lemonade stand model is what successful businesses do — they create products, which at first might be quite small, around what their customers are in the mood to buy. That’s what Rand Fishkin did at Moz. It’s what we do at Copyblogger — and we’re always adding to our model, creating new options, meeting our customers at new points.

It’s much more fun and less frustrating, because it actually works.

So, those are some thoughts on trade secrets, business models, and transparency. See you next week!