The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world's most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.
1. Get Rock-Solid Contracts
For most companies that employ online workers, there isn't a lot of physical stuff that gets shared -- it's mostly program material and proprietary systems. Intellectual property theft is especially hard to identify for most businesses, so early on I chose to include these descriptions and provisions in all employee contracts. I'm not a lawyer, so I worked with one who could get the language right and protect my business property from theft.
2. Don't Get Taken Down by Fraud in E-Commerce
If you're just getting into the e-commerce game, you most likely have no idea of the amount of fraud that goes on. Having certain elements in place in your e-commerce platform will be KEY to the success of your company, ensuring that you're only shipping out valid orders. Tools such as fraud score components on orders will help you identify fraudulent orders.
3. Be Careful in Your Hiring
Fraud is a bigger problem in the startup space than a lot of people realize. In regard to fraud by employees, while good contracts can help after the fact, generally someone willing to break the law is not going to be cowed by an agreement. The best protection is to avoid the situation in the first place by thoroughly vetting your employees, creating and maintaining a strong oversight regime and putting the kibosh on any undesirable behavior as soon as it is spotted.
4. Have an Emotional Buy-In
For early-stage entrepreneurs, committed employees will make a world of difference. Not only are they more willing to work harder, but they tend to care more about the founders and the success of the company.
5. Create Social Capital
The best way to minimize risk is to create social capital. Can you leave a sandwich in the fridge without a name on it and expect it to stay there uneaten? If that's true, the chance of fraud is minimized. To instill that attitude amongst employees, we operate everything with open transparency (management and governance) so it's easier to see when that's not being met.