From beginning to finish, launching a startup is a complex and laborious endeavor. Everyday is an adventure, and problems will arise quickly. Whether you’re an aspiring app designer or seasoned engineering extraordinaire, you will have numerous questions along the journey of entrepreneurship that “Google” will not be able to answer precisely. For this reason, the Founder Institute has gathered our expansive network of entrepreneurs to solve the problems you encounter each day.
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In this installment of Ask an Expert, Adeo Ressi and Founder Institute graduates, address the question that almost all entrepreneurs must ask themselves before starting up,
Should I quit my day job to focus on my startup?”
1. You Need to Raise Capital
“It's important to quit your day job. I recently got an update from a graduate. Their company failed to raise capital and his day job was getting harder, so he had to close his startup. This comes as no surprise, since I have never heard of any startup that was able to raise professional angel money while the Founder was still employed. Furthermore, it's nearly impossible to dedicate the time and mental energy necessary to gain traction in the marketplace for your product while working for another company."
- Adeo Ressi, Founder and CEO of Founder Institute
2. It's the Next Step to Success
“Adeo is completely right. I bombed two investors meetings because I had a day job. Here’s the cold truth: Deciding you want to quit is usually just the first move in a long and cerebral chess match you’ll play with yourself. I’ve found that a founder's inability to quit their current day jobs had little to do with the perceived riskiness of their new startups, their financial situation, or general economic conditions. The real barrier for most of us is not external. It’s our own psychology – we:
- Overthink decisions
- Fear eventual failure
- Prioritize near-term, visible rewards over long-range success.
I found myself hesitating in front of an email send button. It was my resignation email which took three hours to write. Sending it was the ultimate mind hack."
- Mohamed Kamal, Co-Founder and Head of Product for Gigturn, a fan marketplace where anyone can discover, create and host music events in more than 600 venues throughout the US. (Washington, DC Grad)
3. There's No Such Thing as "Perfect Timing"
“My experience was similar, but with an extra ingredient... when I was about to quit my job my wife was diagnosed with cancer so it was an even harder decision. I talked to one of my advisors and he asked me, ‘When do you think it's the perfect time to start your company? There will always be a problem out there, you just have to choose if you want to do it or not.’ I then talked back to my wife and asked her if she would support me in case I didn’t raise enough money to live for a year and she agreed.
Now she has no cancer, we are about to receive new funds and the business looks promising. If I hadn't taken that decision in that apparently insane moment, none of this would be happening, so I really appreciate her faith in the project and the words from my advisor."
- Sebastian Wilson, CEO at Luminux.cl , a web platform where users can share recommendations for products, services and places with friends. (Chile Grad)
4. Minimize Distractions to Reduce Mistakes
“I have a meeting in about 3 hrs today to tell my employer I intend to focus on my startup full time. It’s a mind hack! In our situation, my co-founder happens to be my wife (they say co-founding is a marriage anyway right?!) - arriving at the decision that this is not only best for our business but also our family has definitely been a challenge, but at the same time a good measure of our ability to work as a team (in life and business) as well as an exercise in trust and support for each other.
I've spent the last 18 months developing, collecting user feedback and then developing again. Although that cycle never ends, it has come to a head where we have a refined enough product to start spending serious marketing money to grow it makes sense to us that we should minimize distractions which will hopefully reduce our mistakes and get more for our money.”
- Tom Walpole, Co-Founder of Wembli, Inc, the easiest way to plan out outing to concerts, theater and sporting events. (San Diego Grad)
5. Part-Time Work May be a Better Option
“Whilst I was in FI I quit my day job to focus on my startup. It was the right decision. In order to fund day to day living I was just going off savings but I've also been fortunate in picking up some part time consultancy gigs which is a bonus. By consulting to the right companies I've also been exposed to some other contacts including investors so that's good too. Up until the product was available (in my case) the consultancy has worked great. Now that the site is live my work is cut out for me as I hustle away the plan is to focus on Oddswop and fundraising."
- Yvonne Lee, Founder of Oddswop, a platform that lets you create your own classifieds site for any special interest group or community. For Free! (Sydney Grad)
6. You Fail Faster
"The thing about having a job is that you don’t have the ability to fail fast. An unemployed founder has the entire day to meet partners and customers but an employed founder only has a few hours per day after work. And that’s assuming that people actually want to talk to you after working hours, instead of spending it with their families.
An unemployed founder has a fixed amount of money, so that forces the founder to really focus on being cost efficient. An employed founder, however, has a steady monthly salary so naturally it’s harder to focus because that founder can literally afford to do so. That means that what takes an unemployed founder 2 weeks to learn may very well take an employed founder 2 months. Compound that and you may end up spending years of your life on something that doesn’t work."
- Elisha Tan, Founder of Learnemy, an online marketplace where you can take in-person classes from local experts. (Singapore Grad)
7. You have to Constantly Deliver
"We are scaling our product and team by doing consulting jobs. It's easier but it's constantly selling and delivering. So far we're alive and getting our core business up and running day by day. FI was one of the better decisions so far."
- Goran Candrlic, Co-Founder of Webiny, a complex system whose aim is to encapsulate all common web software into one big system. (Rijeka Grad)
8. The Devil's Advocate
"I'd agree with Adeo however there are a few important matters to factor-in that are often forgotten. We can all agree that without putting the effort in a startup then it is likely that it will fail so you have a few choices:
1. Do it slow - Work on your start-up part-time/casually whilst keeping your day job
2. Do it fast and quit your day job to work on your startup
An innate nature in humans is rush, they want results and they want it now. However to make the best decision it will depend on the grad's situation:
a. Stage of the startup (Early stage work is different than traction, funding etc...)
b. Financial situation - Can the grad afford to stay without funding for a while?
I believe it is vital to factor the two points above to get the answer that is best for each situation. The second point is really critical. I personally quit my job to work on a startup however I soon found myself distracted with having to get some money in the door to pay rent/food/expenses. The startup was not "officially" launched yet and I was no where near raising funding. I chose to do some web development on the side to get by however it took a fair bit of time of my day. So did I really "quit" my day job? Some might argue that I didn't. In summary, Adeo's point is spot on however it cannot be used as a blanket rule and is more geared towards grads that are ready for funding."
- Ramzi Zahra, Founder of Service List (Currently Under Construction), a quote management web application which allows users to collect and organise quotations from external companies and provides automated reports based on responses. (Sydney Grad)
The Founder Institute encourages individuals to keep their day job during the course, but we also encourage entrepreneurs to take the necessary steps to succeed, even after graduation.
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Interested in receiving advice from three founders who’ve left the corporate world to build promising companies? RSVP for our upcoming webinar, "When to Quit Your Job for Your Startup", Featuring Nexercise, Spikes Security, and TapGenes.
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