Overwhelmed by Technical Supports

"I have 500 paying customers and 7000 free users grossing about $7k a month and growing fast."

The very first thing to do is prioritize your work. Paying customers get priority technical support. Free customers get limited or no technical support.

"I'm tied down at least for several hours a day to handle daily maintenance and answering technical support e-mails."

This is the most common problem for start ups that I see and the thing almost all start ups handle incorrectly. If you hire somone to do technical support for you right away, you are compounding the problem, not fixing it!

Let's address technical support first. You take the calls and emails now. Are you logging them, looking for common problems? Are you using this information to reduce your technical support by improving the product, help, or documentation? Don't be the company that has a product with over 2,000 known bugs that is working on improving their packaging. Fix the bugs! If customers have that much of a problem with your product, fix the problem, then worry about hiring employees to maintain things.

Now let's address maintenance. If you spend 40 hours writing code to cut mainenace from 3 hours a day down to 1 hour a day, you pay for your work in less than a month and you cut your future work load (and the need for an extra employee) down.

One last point (which I forgot previously). Everyone who works technical support for us has either an email client that supports complicated macros, or an add on macro package. We supply each person with a library of macros that can answer 90% of all questions with just a few key presses. We prefer The Bat for an email client because of its macro support, but also supply libraries in Type Pilot. In either program you type a few characters, hit a special key, and those characters are replaced by paragraphs of boilerplate text. The macros can answer questions or just point them to the right place on our web sites for an answer.

Have you implemented any on-line tools like a wiki, forum or a site like stack overflow to allow customers to engage in self-help and help each other? Free software exists for all of these. Also don't forget about a FAQ page.

Rather than hiring someone right now, have you considered offering an incentive to one or more of your most knowledgeable customers to be a moderator on a form or Q+A site? They will know far more about your product than a new hire who you would have to train. The incentive could be money or it might be prestige, a free renewal or priority input for feature requests; there are lots of ways to reward a moderator.

I have 500 paying customers and 7000 free users grossing about $7k a month and growing fast.

I'm tied down at least for several hours a day to handle daily maintenance and answering technical support e-mails.

The amount of tech support related work is doable if I were to handle this full-time. However, this means I won't have time to develop new features or do marketing and business development.

Looks like you have outgrown being a one man team, great! Time to hire before your business growth suffers because you cant devote enough time to the right things.

Will he steal all my tradesecret and startup his own company? Will a non-compete clause really help?

Unlikely. Starting up is risky and involves a lot more than a few trade secrets. Very few people are prepared to risk it all and start up themselves. A non-compete clause will help but your best defense is just human nature.

How much do I have to pay? I don't even pay myself. However, I expect the revenue to push to $10k/month by the year end and double it by next year.

You should pay around market rate. My advice would be slightly more because that instills good will. You may well need a few favors if your business goes as well as your predicting (extra overtime)

What kind of skillset should I need? The ideal candidate will be like a swiss-army knife. Another consideration is I plan to develop another business written in RoR so I'll need to have another programmer to help out. Should I look for someone who already knows RoR and multi-task as a tech support guy for my current product?

Hire for you immediate need not for some possible future project. The requirements for the future project can change and even if they don't you can always hire again or have someone learn when you have a more concrete idea of your needs

Signup for a free (hosted) FogBugz account for your startup and grant your (paying) customers access to their cases (tickets). Also, create a wiki (or wikis) that all of your customers can access for FAQs and other public documentation.

As someone that has worked as both a support tech for 5+ years, as well as a support manager (1+ year) and a developer (2+ years) – all for small startups – I can tell you that the best thing you can do is acknowledge open issues, provide workarounds, but then (ruthlessly) eliminate any issues that are generating support calls or emails, especially for your paying customers.

I agree with most everything posted here previously. However, I strongly suggest you read the book E-Myth ASAP. Then go out and hire a Tech Support Rep. And pay them as little as you can at first. Maybe $8 to $10 per hour. Set up QuickBooks and pay the $3 (or whatever it is now) to calculate the payroll withholding.

Your goal should always be to off-load all of the tasks that you can hire done. Start with the things you can hire done for the least money first, or the things you hate to do, and then move up from there.

Once you have the systems for payroll and withholding setup it's easy to add the 2nd, 3rd, 4th, etc... employees. Treat them well and let them know you are just getting rolling but you'll do everything you can to help them move up as you get on your feet.

I was right where you are now, back in 2006. Now we have a profitable 12 person company with almost $2,000,000 in revenue. BEST WISHES!!!