QUESTION:
Should I quit my day job to ensure my startup gets off the ground?
ANSWER:
Naomi Kokubo
by Naomi Kokubo, Cofounder of Founders Space
Yes! Maybe? No! All three answers may be correct.
Yes, if you truly believe in your startup and you have enough money in the bank to survive for at least one year, while you get things going. Keep in mind, the money you need goes beyond personal living expenses. You’ll need funds to bootstrap your company too.
Maybe, if you truly believe in your startup and can scrape together the money to survive for at least one year.
No, if you don’t truly believe in your startup or if you’ll wind up in financial trouble.
Before I dive into details, let me say that I see very few “nighttime” startups succeed. It’s exponentially harder to get a startup going if you’re working full-time. It really takes at least one full-time founder to get something as complex as a new business off the ground.
Also, by quitting your day job, you’re under real pressure to make your startup go. It’s do or die. Halfway doesn’t make miracles happen. That type of pressure is what it takes for most people to get a startup to the next level.
But before you go “all in” on your startup, let me point out some things to ask yourself:
- Does anyone else believe in your idea? Why or why not? People don’t have to believe in what you’re doing, but it helps to get a sanity check.
- Have you talked to veteran entrepreneurs and gotten their feedback?
- Have you met with angels and asked them what they thought?
- Have you sought out professional legal and financial advice?
- Have you written up a business and marketing plan?
- How will your startup make money? And how much money do you need to reach profitability?
- Do you have all the skills it takes to launch this venture? Do you need anyone else to join you? What would it take to get them on board?
If you haven’t done at least what I described above, then PLEASE keep your day job. Work on those issues first. Once you have answers to those basic questions, you can seriously consider whether you want to risk it all. Like I said, very few startups succeed unless the founder is willing to take the plunge, but don’t plunge too soon!
“It is hard to serve one Master well and virtually impossible to serve two and keeps one's head attached to one's shoulders”.
As a serial Entrpreneur I can attest to the above statements validity. But “timing is everything” is also true. You should quit your day job when you have:
1) written a business plan to a sufficient level of detail that you gave a schedule with a budget
2) saved or raised sufficient funds to “cover your personal and business expenses for at least 18 months”
There's more needed but most people never do these two things first, so the rest really never matter.
One way to handle funding and still be valuable in the marketplace is to do contract jobs. They can go from weeks to months and this gives you time and income to work on your startup. You'll also still be growing your skills. Once the startup is generating business you can ween off of contracting. Keep building trustworthy relationships.
A very good summary on the problem of having a vision, but no funding. I actually had that discussion with people before, and it could be a life changing decision, ending with something really good or really bad.
What I personally think is that if you truly believe in your startup, in a way that keeps you up at night, you should turn to other parties, be it friends, family, associates, and even investors who can reflect on the startup from a more objective point of view. Sometimes, you can get so blinded from your own thoughts and dreams and it's important to have that feedback.
What I heard about from others and experienced myself, is a fear that someone would try and steal your idea, but if you think it through, investors, be it private (angels) or VCs don't care much for creating the startups themselves, it's not their core business, so there's nothing to be afraid of really, you can simply use feedback from such groups of people, that might stir you to the right direction.
And again, thank you for this post, it's an important read.
Good article. Explains the basic dilemma many entrepreneurs go through in an objective way.
I would add that the only one reason why one should plunge into an entrepreneurial stint is the unrelenting passion for your idea / calling. It has to come from the heart. Then one can use the head to enable it in a step by step way to reach little milestones. One of the key one being taking the plunge full time!
Is your time the critical resource your start-up is missing? Maybe you should keep your day job and hire someone with more critical skills than yourself?
I agree. It’s hard enough getting a startup off the ground when you’re working full time, let alone when you’re just working nights and weekends. Also, people need time with friends and family. Trying to do something as difficult as launching a startup in your spare time is not likely to succeed. Although, it can be a good way to explore new ideas and see if there’s something you want to dive into later.
Tommy