I'm a pretty stern opponent of the idea that entrepreneurship is like jumping out of a plane. As an image, it has all sorts of incorrect implications (you only have one shot, you'll die if you fail, it's really scary, it can end in something horrible and violent, it's for thrill-seekers, etc) which mislead new entrepreneurs badly. For example, many will stake everything on that one startup and not realise that entrepreneurship is a career, and that it will probably take them years to get the hang of it.
That said, when you're sitting in your comfortable office chair in the office of a large corporation, earning a comfortable salary, working with comfortable, if slightly boring, colleagues, doing a job that comfortably stretches you a tiny little bit at a time, "taking the leap" does seem absolutely terrifying. It does feel like you're about to throw away your parachute and jump out of a plane.
I know, because I was there - six years ago, in 2007, and it was incredibly scary - though also very exciting, to be fair. I managed to concoct a deal that made it financially less daunting to me, although that deal was certainly a factor in the rapid death of my first startup, and a strain on my second, but psychologically it was still terrifying.
There's no way around it, I think. Either you take that jump before you even know what job security is (i.e. the "straight out of uni" approach, which has its own downsides), or you face this gaping, bottomless chasm and... jump.
You might get lucky. Your first startup might take off like a rocket, or at least like the Wright brothers' flying contraptions, and so you might come to the conclusion that it wasn't really worth being scared of in the first place. But that's pretty unlikely. Much more likely, you will face several years of failing, of barely keeping your head above the water financially, of every once in a while being sat down by your friends and family who will look at you with kindness and concern and ask in a reassuring but worried voice, "so, when are you getting a real job again?"
That being said, I believe there are several important things you can do to make those few years easier, and shorter. So, here's my advice to people who are about to leap into the chasm, or have just done so.
1. Cut (personal) costs to the minimum
Ultimately, your survival as an entrepreneur (not as a "startup" - you're a person, not a corporate entity) will depend on your personal runway. One day, you might find yourself facing rent and food costs with absolutely no money in the bank. You want to push back that day as far as possible, or even avoid it happening at all. The way to do that is to cut your costs.
How far should you cut down? Well, that will entirely depend on your personal circumstances, but chances are it's lower than you think. When I first left Accenture, I could barely live on £2,500 a month, net. By the time my involvement with Woobius ended and I started GrantTree, my personal, monthly costs were below £1,200 a month - that's living in central London, aged 29. Half of that was rent and bills, and the rest went on groceries, travel costs, and the odd beer. Mercifully, most startup events have free beer and sometimes pizza. Yay!
What you want to cut, in particular, are big, monthly costs. Have a car? Get rid of it. Big flat/house? Move into a single room in a shared flat or house. Daily Costa Coffee? Out. Anything that's regular and big or adds up should go.
You'll surprise yourself how low these costs can go.
The one thing you shouldn't do is move away from a startup hub (like London) to the middle of nowhere. Personal connections are hugely important in this new world you're entering. You must be at the centre of things.
2. Do not take funding
This is a controversial one, but here's a reality of being an entrepreneur: your job is to make money. As a new entrepreneur, your job is to learn to make money. Anything that delays that learning is really bad.
If you have a year's worth of funding in the bank, you won't feel that much pressure to either cut personal costs or make some money now. If you have just your personal savings and a business bank account that contains a big fat round £0, the pressure to make some cash flow is your daily companion, morning, day and night. This pressure is good - it's what makes you learn to spot opportunities for making money.
In addition, it means that any money you make is your money. You will probably choose to reinvest a lot of it in your learning and/or your business, but it's yours. No investors to report to. Did you just make £1,000? It's yours to spend. Don't forget about taxes though!
For most new entrepreneurs, investment is a cushion that delays their learning. If you're thinking of raising investment to cover your personal costs, don't - instead, learn to make money. It's really not that hard. Many people far less clever than you have figured it out. You can too.
3. Connect with mentors and peers and listen to them
The mistakes that killed or maimed Vocalix and Woobius, my previous two startups, were not very original. They were awfully predictable. In fact, I recall sitting with my cofounder in a great meeting with William Reeve, cofounder of ScreenSelect (which later acquired Lovefilm and took its name) and angel investor, a super-smart guy who explained to us in detail why Woobius didn't work as a business model.
Did we listen? Sure. Did it worry us? Of course! We felt very deflated when we walked out of that meeting. Did we rebuild our reality distortion field within minutes of walking out and go merrily on our way, ignoring all that good advice, and hitting the wall he described? You betcha!
It's not enough to get good advice, you also have to listen to it.
The problem is, of course, how to tell which piece of advice is good, and which is bad. The solution to that is to know the context of the advice-giver, and consider that along with the advice. If you're building something that involves selling to businesses and someone who's been doing that for years gives you advice, that advice is golden, for example.
Most startups fail for boring and predictable reasons. Very few fail for reasons that were really specific to them. To avoid being one of those generic flops, surround yourself with mentors who have actual startup experience, and with peers who share your issues and concerns. Talk to them, and listen to them. Get rid of your startup gung-ho attitude, and actually share your problems. Their informed advice is worth a lot more than that elusive intro to an investor or potential customer.
4. Don't tie yourself to one idea
In the business model workshops I've given over the last few years, I make one point particularly often: there are many ways to implement your idea, and most of them are wrong. Your job as an entrepreneur is to figure out the right one.
Beyond that, though, you need to pick an idea space where there might be something worth doing. Too many startups declare that they're going to "revolutionise email" or some other random unattainable goal, and then fail hard because they picked a space that is incredibly difficult to crack profitably. Don't force yourself into that corner prematurely. Play with multiple ideas, in multiple markets, until you find a market that seems to stick, that seems to be both interesting and relevant to you, and profitable.
"I quit my day job yesterday. I'm starting a business to solve the problems of email tomorrow." is not something you want to either hear, or be saying.
5. Don't make plans or set deadlines
You may think it's sensible to "give it six months" and then go back to the corporate grind. It's not. If you've given it six months it will probably take you three years.
While I don't recommend taking risks that mean that you won't be able to pick yourself up and try again after your first startup bites the dust (such as mortgaging the house to pay for the startup), there is something to be said for burning the boats.
Don't look back. Your way forward is forward. If you do need to get a day job again, get it in a startup, not in a large company. Make sure enough people on the startup scene know you or know of you so that it won't be a problem. If you do need a job again before you finally make it as an entrepreneur, it should not be a job you have to interview for.
In conclusion
This is a pretty long article - and that's not counting all the articles it links to. If I'd read and applied all this advice back when I took the leap, it would have saved me a lot of pain.
If you've just quit your job, or are about to - do yourself a favour and save yourself all that pain.
You'll still be terrified of the leap. Nothing will change that except the feeling that actually, things aren't as bad as you had expected. But believe me - if you apply the advice in this article, your real chance of success will be vastly improved.
Good luck!
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