Going all in?

Alton Alexander PhD Dropout / Engineer / Data Scientist / Founder

March 20th, 2013

I have a secure full time engineering position but it might be holding me back from my dream which is to enjoy all the risks and rewards of working in a startup.

I have several ideas that I'd like to pursue as a founder or cofounder. I already have one small side business which could keep me financialy afloat as I concentrate the bulk of my time on a new venture.

To maximize the odds of success I feel like the best next steps are to find partner(s), define scope, and quit my day job to focus more of my time. I would like to hear your advice.

Michael Brill Technology startup exec focused on AI-driven products

March 20th, 2013

Hi Alton.

One thing I've found from talking with a number of people in this group is that (a) everyone wants a co-founder and (b) everyone has their own idea(s) they want to work on. So what often happens is that while you're looking for a co-founder, you work a bit on your idea, then a bit more, and then you're invested in it and now you have to sell the idea to someone who is very unlikely to have the same level of enthusiasm they would have if they participated in ideation early on. You are looking for a co-founder, not employee #1.

I'd recommend trying to get someone to work with you really early on, even before you make the jump. Make them as much of an owner of the idea as you. There are certainly exceptions, but for your garden variety tech company, having a partner makes everything you do much easier.

Bill Snapper Owner Principal at SammyCO, LLC

March 20th, 2013

My opinion from personal experience is to "go all in" IF you can afford it. I went the route of trying to work part time and have it fund my own development. The problem I had was that the part time gig started as a 20 hr per week and started getting up to 30 hours or so. Switching gears between technologies got tricky and tiring. I found that in order to do it right I needed to focus 100% on my own thing or it wasn't getting the attention it deserved. Others doing something in similar space focused 100% were passing me like I was standing still. I was kidding myself and wasting valuable time.

Careful taking investment to early too. It's tempting but can also be a huge distraction and weight if you don't get enough up front. It's a tough balance but if you can get up and running and generating revenue without taking in cash you'll do very well if/when you need to raise money.

I also learned that I need a partner with complimentary skills to mine. It helps keep you on track and provides good sanity checks. Focusing 100% on your own idea, in my opinion, is the way to be successful. Best of luck!

Jon OShaughnessy

March 20th, 2013

Hi Alton,

Love the question.

Here's a thorough answer (I feel like I've enjoyed reading the discussions on here and haven't contributed yet, so here goes my two cents):

I think many of us are in the same boat re: finding the right potential cofounders. I've been looking high and low for the last two months (turning down a number of interested potential CTO's in the process) because I haven't found my definition of "excellent fit." It's so incredibly paramount, and I think it's one of the few things everyone in the startup community agrees on. I can affirm this from the other side of the table - I used to be a VC and we would primarily invest our Series A money in the founding team, or rather, our belief in them to execute and overcome the as-of-yet unseen obstacles in front of them.

The point is that - just like the FounderDating tagline says - ideas change but people don't. Meaning, I guarantee that the idea you have at the moment - whatever it is - is going to morph and evolve and change many times over from now until you find "your engine." The point is having a team that can learn with new market data, and iterate very quickly to find the thing that works.

So my advice is - you can find that person or do initial market research while you have your job. Keep the income and safety net while you still can (as you take the next steps to get ready to take the plunge).

Next I think is the question of why you want to start a startup in the first place. Is it the joy of building things? Not having a boss? Riches? The excitement?

That answer is critically important. It IS exciting, glorious, and consummately rewarding - but having been in a failed startup in the past, I can also equally say that it is arduous, tiring, and unrelenting. I feel that there is always a "grass is always greener" with startups, and my perspective is that it is simply more of everything. The highs are higher and the lows are lower. That said, I firmly hope I never work for another corporate firm again. I love it, and the high potential for failure is dwarfed by the reward I feel by doing it. Just be sure you're up for the whole package, and not the glorified image the tech press portrays.

I think the only real reason not to take the plunge is if you had a family to support. For me, I don't mind if I put my own self in financial jeopardy (what's the worst that will happen? I eat ramen for a while), but that equation changes when others are involved.

That said, I think that once you find your cofounder(s) and have an idea of what you want to do - you should jump in. If you're committed to doing it, you find your partner, and you have an idea you love - jump in. Quit. Take the plunge. Best case you have a wild ride and make money. Worst case it fails and you move onto the next thing. Either way, you did it and grew from it.

My two cents.

Oh, and if anyone knows of any really excellent full-stack software engineers, please send them my way :).

For that matter, I love chatting with just about anyone in regards to startups so feel free to reach out.

Dominick Fuccillo Director of Business Development and Strategic Partnerships at Homesnap

March 21st, 2013

Great thoughts by everyone so far. Having quit a job too early to start a business before here are the equations I go by now:

How ever much time you think you'll need to reach sustainability (funding, customers, etc) times it by two. If you can't survive that long at your current burn rate don't quit your job (do not include credit cards limits in the burn).

If you can't do everything you need to do by yourself to secure a sustainable business (ie you want to start a tech company, but are not an engineer) don't quit your job. If you quit your job make sure you control your future and aren't relying on someone else.

If you need to ask this question you're probably not ready. If you find yourself thinking about it constantly start doing what you need to do to give it a go - saving money, making the right connections, finding co-founder, talking with investors, making your family/wife/girlfriend/significant other as happy as possible and comfortable with what you're about to do, etc. If you can't find motivation do this on nights and weekends then probably not ready.

Also Michael Grassotti brings up a great point - get people to prepay as a test. People will say they will buy it when its ready then flake on you. Get them to either prepay or sign something saying they will pay when your product is ready.

In the end its your rodeo though, if you want to get nuts then get nuts and quit your job.

Matt Monday Partner at STRV

March 20th, 2013

Hi Alton, What are your ideas? If you haven't started a company before, I would advise you validate as many of your assumptions as possible while still at your job. Once you start gathering significant positive data around your idea (perhaps even revenue if possible) then go ahead and make the leap. You're also spot on about finding a co-founder to join you for the ride. Best, -Matt _ _ _ Matt Monday @karmastore 419.304.8339

Justin Williams Digital Marketer and Data Analyst

March 20th, 2013

From someone who's been there, in an tell you that you can't prepare for everything. It's great you have a side job that can support you, but can it really support you? Have you considered the cost of health insurance? Wanting a startup is cool, but does your idea have a basis in reality? In other words, does anybody want what you can do/make? Can you sell it? How long will it take before you become profitable? Can you support yourself that long? Startups take a lot of time and energy (generally). Can you commit what is necessary to be successful? Finally, what's your exit plan? Lots of people like the idea of a Startup, but it's important to begin with the end in mind. Will you sell this business in five years? One year? Go public? Quit after it's grown? If you can answer these questions, and you still think it's a good idea, talk all the answers over with someone you trust who will be honest with you. If he/she says it sounds good, go for it. If not, reconsider.

Alan Peters VP Product and Technology at BusinessBlocks

March 20th, 2013

If you can be financially viable while pursuing your dream, why would you do anything else?

Michael Barnathan

March 20th, 2013

FounderDating truncated and screwed up the formatting in my email reply, so let's try this again from the message board. Sorry for the duplicate, everyone:

I'd advise "going all in", but being smart about it. In descending order of importance:

1. Have you saved up enough to live comfortably for at least one year without any income? If not, keep working and saving until you reach that point. Money issues will distract you and cause you to make bad decisions out of panic.

2. Can you fully utilize the extra time working on your business? If 4-5 hours a day is all you need, and you won't get any incremental benefit from putting in 10-12 into the business, then that alone isn't necessarily a good reason to quit your job (there are other reasons you might want to anyway, but that's out of the scope of this discussion).

3. If the business fails, can you get back into a similar position? If you can spring back into the same line of work with minimal loss, the risk of quitting is low.

4. Have you validated the idea (e.g. spoken to some customers and seen what their needs are)? It would be terrible to quit your job then discover that there's no market for the idea you're working on. If you haven't already, I'd recommend doing some market validation while still employed, then making the choice whether or not to quit based on that.

5. What timeframe do you see the business playing out over? A startup success can play itself out for 5-10 years or longer, but a failure will usually fail within the first 18 months. There are still many exceptions to this; your mileage may vary.

Since this is your dream, you should eventually choose to quit and work on the business. That's a given, or you'll end up living a life that you're not happy with. The only question is when.

Best of luck! I left a Google job to work on my startup - it was HARD, but I'm happier now for it.

Cheers,
Michael

Daniel Lo

March 20th, 2013

Many people here have talked about being able to sustain yourself and these are definitely important, don't guessimtate your burn rate, actually calculate it and don't give yourself a "working at home bonus"!

Also important is figuring out WHO you want to do business with and what kind of focus is the business in?

I talked to over 160 people 2 years ago, before taking another job. I found the following criteria very
important.

YOU:
1. What are you looking for in an equity stake and what are you bringing to the table to get that percentage?
2. How much risk can you take? 6 months? a year? Will you need a garage round or a VC round? Is the business self paying? Will you accept a partner that has greatly less or more leeway in finances than you do?

YOU AND CO-FOUNDERS:
2. What is the culture of the business?
3. What makes the person a great CEO/CTO? Are they someone you envision working with a lot? Do they have management skill?
4. Is the guy/gal a jerk? Are they reciprocal? You'll be working with this person a lot, rapport is very important.
5. Passion, Commitment,
6. NDA? NDA's hinder the validation of the business and in my book, don't really warrant further investigation as only a few ideas have been worth the effort of an NDA.

GOAL:
7. SaaS? B2B? B2C? UGC? What about marketing?
7. Flip the company? or build it out? The "why" is very important to me.
8. Is this actually scalable? If so what time frame?
9. Is there a clear understanding of failure and success?
10. Regulated industry (health, education, government, etc...) - automatic fail in my book.

I've come across a few other weird cases, such as the person doing several start ups at the same time, or the other founder's have way way more assets than I do, thus they can take a much higher and long term risk than I can.

Louis Hatzis

March 20th, 2013

Going after a dream is always exciting and I would recommend pursuing it, especially you're young without baggage (family, kids mortgage etc). Its much easier to go after a dream.

If this is your first startup, look around you for a co-founder(s). Look at the people you know and trust. Think about what are the most important things you need, and who you know that can do the job. Find people that you've worked with before at your job, at school or other places. Ideas are a dime a dozen, and even though ideas are important, ideas evolve and change. Teams make ideas real, people that have worked together before.

If this is the first time you going into the startup world, maybe instead of starting your own, you should find a job in at a early stage startup and see whats its like.

I recently moved back to the US. working on my ninth startup. Its tough but its also sweet.

On this site we're all entrepreneurs, we've got the bug and mostly likely all of us will tell you to go for it.

But be prepared for difficult times. Things will be difficult, unpredictable and stressful. Being an entrepreneur is a true test of character of how you execute how you find people and resources you need, how you make decisions and how you accomplish the what you set out to do.

Being an entrepreneur is a state of mind, not a state of employment.

Think about that and you should be able to make up your mind about what to do.

Going all in?

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