In today’s episode of The Startup Chat, Steli and Hiten talk about how to deal with your employee’s side project. When an employee begins a side project, it’s easy to think that that project will affect his or her productivity. However, this is not always the case and in fact, doing a side project can actually increase the productivity of an employee. In this episode, Steli and Hiten how to decide if an employee should be allowed to do a side project, examples of side projects that are ok, the difference between a side project and a hobby and much more. Time Stamped Show Notes: 00:00 About the topic of today’s episode 00:20 Why this topic was chosen. 02:20 Hiten’s take on this issue. 03:44 Redlines to look out for. 04:50 Examples of side projects that are ok. 05:22 Why your priorities should be your work. 05:40 The difference between a side project and a hobby. 06:41 What side hustle means to Steli. 07:50 Why running a side startup can affect an employee’s productivity. 10:46 Why the discipline of an employee is crucial when deciding if he should be allowed to do a side project. 3 Key Points: Some of these things are required for these people’s happiness.As long as the project is not competitive with the business then it’s cool.Your priorities should be your work. [0:00:01] Steli Efti: Hey, everybody, this is Steli Efti. [0:00:03] Hiten Shah: And this is Hiten Shah. [0:00:04] Steli Efti: And today on The Startup Chat, we’re going to talk about how to deal with your employees’ side projects. So here’s why I want to talk about this with you, Hiten. Just got an email from somebody that was asking me… He basically, he has a small team of five people in a startup, and he discovered that one of his developers is working on a side project, on a little app on the side. It’s something that he didn’t know about and kind of like just stumbled over it, and he was kind of conflicted about this. I think that this is something that a lot of entrepreneurs go through, especially probably less experienced ones, where maybe you’re a bit more, I don’t know, afraid of the energy and time commitment and work that your employees put into your company, versus potentially putting into their side projects or something that could turn into their own business one day. And I have gone through this… a journey of this of myself. I think when I first started as an entrepreneur, I was maybe not as cool with it, and I’ve become a lot more cool with it and even would hire people that had very prominent side projects and tell them that I would support them with them. And if, in a couple of years, those side projects grew bigger, they could go on and do that full time. And that has happened successfully many times before. And I’m sure you have a bunch of good examples, bad examples. So I just thought it would be a fascinating topic to talk about from a founder perspective. How should you think about the side projects of your employees? Good, bad, encourage it, discourage it? What’s been your experience? What’s kind of your take today on this topic? [0:01:56] Hiten Shah: I think it’s… There’s two answers I have. I don’t really have a take. I haven’t experienced this a lot in my businesses, and when I talk to people about it, I think it’s cultural. Is it accepted or a norm at the company you’re at? Is the leadership, founders, whoever, are they encouraging it, okay with it? How do they view it? And then what do you want, as a team member, in a company too? And then there’s a piece that’s like… So I guess there’s more than two things, but there’s a piece where it’s like legally what are you allowed to do and not do based on the agreement you signed? Yeah, so I think it’s a topic that’s definitely something where I see a lot of people doing… Or I see an increasing amount of people do freelancing on the side just because… [0:03:05] Steli Efti: On the side, okay. [0:03:06] Hiten Shah: … They want to make more income, or they have a passion or something that’s not coming out at work. And so myself, as a sort of manager, I mean, there’s a case-by-case basis, in some ways. There’s a way to think of this as something where, as long as these things aren’t competitive to the business… Because I think that’s a no-no. It’s just not cool. It’s just not cool, right? And you’re still able to get your work done as well as you possibly can, there is a work-life harmony, work-life balance, your own personal happiness as a team member and thus your ability to contribute to the company that come into play here. So we have a designer, and he is a… He likes cars. He has a fixed-up car, and he’s part of a car club, and he sometimes on the weekend he’ll go… Like, they have a car meet-up, like a big one, and he helps organize it and stuff. Or he’s working on their website or working on their merchandise. It’s not like a side job. It’s not like a side gig. It’s not like freelancing. It’s just something he does. It’s a project, right? And it has nothing to do with work. So yeah, there’s stuff like that. I’ve had a couple of designers, and again I just mention designers because they’re just the ones that end up having this. They have a personal site. They were making a bunch of icons for people and things like that. Not for people, just icon sets and wanted to play around with it. So I wouldn’t say I’m the type of person to encourage it. I also wouldn’t say I’m the type of person to discourage it. I’m just the type of person that’s like your priority should be your work when it comes to how you’re making a living if you’re going to work at a company. So there are very rare exceptions where they don’t need to make a living, but they’re willing to work at another company. Some people are like that, but usually they’re working in a really large enterprise or a large company. So I look at it more like, from my end, on a case-by-case basis. And I look at it as some teams have this cultural thing where a lot of people have side projects. Other teams are way on the other end, where nobody does. And there’s, I think, folks in the middle. And then I think about it as like what’s the difference between a side project and a hobby, because everyone probably has a hobby? I actually… On Twitter, someone asked me about hobbies, and I’m like, “I don’t have a hobby.” I don’t. I think that’s just a construct, but that’s a whole different story. But a lot of people have hobbies or what they would call hobbies. Is that okay? I mean, look, ultimately we don’t control anybody. They control themselves. So I look at it as, again, case by case. And when I look at it as other companies and team members, some of these things are required for certain people’s happiness. [0:06:07] Steli Efti: Mm. Yeah, I mean, I think on this one we’re pretty much on the same page. For me, as many times as we said this before, it depends, right? I think there’s a few things that are important to consider, though. A, to me, there’s a difference between a side hustle, a side project, or a startup on the side, right? So there are differences there. Side hustle to me is something that is like… or a complementary income. So some people, especially like developers and designers is a good example, they might make a little bit of money here and there opportunistically in a way that’s very easy for them to do. Maybe they were freelancing for many years before joining your company as a, let’s say, designer, and then they still get approached by people that want design contracting work, right, or freelance work. And they might just be recommending somebody else and taking a small commission for that, or taking on projects but giving them to somebody else to finish, but doing that very kind of inbound, very sporadically. Maybe it’s two or three times a year. It just happens when it happens. It’s very easy, light work, very little bit of income. It’s just very opportunistic. That’s very different from working on… From supplementing your income and being like every weekend I’m doing freelance work that I’m practically pitching and bidding for projec...