Within entrepreneur groups, there seem to be lots of questions about when you should quit your day job and go full time on your new startup idea. Generally, I am a fan of keeping your day job as long as possible as everyone needs money to live and having a day job means you keep that income and reduce the stress of paying rent and buying beer and pizza. In addition, when you start your new company, you are likely to be working nights and weekends so training yourself, your friends and your family on this new lifestyle is a good thing. Also, by having very focused time on your new startup (part-time vs. full time) you will focus on the most important issues, the “critical few vs. the important many”. Finally, you will find that doing your new idea will take alot longer than you planned, so letting that time play out while you have an income is a good thing. Here are some rules that I would apply;
- Spend at least 3 months on your new idea – this means telling people what you are working on, finding customers, finding other people to work on it, making prototypes and getting comfortable that this is the one…
- Develop a workstyle that involves at least 3 nights/week and 1 weekend day, preferably with other people who you want on the team. This will get you into a rhythm. You might try to do some specific things on each night (product dev, customer dev…) and get you/your team into some form of Agile sprint process where you can define meaningful progress on all relevant aspects of the business. Get into the hard working habit.
- Consider having 6-12 months of living expenses in the bank and discuss this with your family/partner/roommates…you need to know how you will pay the bills while you do the startup. Depending on your progress, you could be courting investors at this time so that investment in the company is a trigger to quit your day job.
- Have a commitment of 3 people who will join you and quit their own jobs and understand their parameters ($, focus, understanding of equity stake…) – to build a big idea, you need people and having them lined up before you jump it will be important.
- Try to get verbal commitments from at least 10 customers (for b2b companies) or 100 consumers on how they would pay for your solution. This is the hardest one to get, but if you are working on a big problem and you know where the market is, you should be able to have a group of people who are begging for the solution. Sometimes not having a real product yet is even more powerful in the early days, but keep working on customer development, it will be critical. Steve Blank has written about this extensively in his book The Four Steps to the Epiphany and you should read it.
If, after all these steps, you still have increasing excitement about the customers, problems, solutions and team, you can really consider taking the plunge.
image credit – http://www.etsy.com/listing/79054001/art-for-artists-motivational-print-quit
Great detail that couldn’t be more perfectly timed.
After working on a pitch deck all week and bloodying my forehead running into the same dead end with the projections, an advisor suggested I pair back my rollout and prove the concept for a few months before taking the full time plunge. It was the right advice and the points above add even more clarity to my situation.
Thanks for sharing the wisdom!
Glad it was helpful. I think we all under-estimate how long it takes a business to shape up and being able to develop it without the stress of paying the bills is really good. Keep working it!
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