This blog is a business confession.
I was describing the nature of trade secrets to a friend. I had explained that under California law a corporation cannot keep an employee from going to work for a competitor. This is one of the few good things about doing business in California.
However an employee going to a competitor cannot give that competitor trade secrets from the former employer.
That is what led to my discussion of trade secrets.
I had been the newly hired marketing researcher who studied the four year old BankAmericard, the first travel and entertainment card issued by a bank. It was intended to be a general purpose card. I knew everything about the BankAmericard.
When I left the Bank of America a few years later to join the Bank of California and start a marketing planning department, I set out one morning to visit my peers in banking.
All four of them were sitting together in a Wells Fargo office when I arrived. A fortuitous surprise for me. They were discussing a proposal from a man named Salverson. Salverson suggested that he create a credit card to be a service to the banks. The four bankers had laughed at Salverson's suggestion. They told him ‘the only credit card we need is green paper’... meaning cash (that was a bankers' joke.).
It was at this point that I used a secret from the Bank of America. I said that BankAmericard was extremely profitable and had generated $13 million in its fourth year of operation; net net. They wanted to know how that was possible and what internal interest rate was being charged. I knew another inside secret. The Bank of America was charging BankAmericard a 14% internal interest on its money. BankAmericard was really profitable already.
My four friends were stunned by this revelation. They promptly asked how we could start our own credit card and I explained how it could be done under existing banking law. (The same law that made a check clearing house possible.)
Out of this, in less than six months grew MasterCard. By the time MasterCard was started, it had hundreds of banks joining it. BankAmericard had to change its name to Visa and asked other banks to join.
I confess, I used trade secrets to help create MasterCard.