By the time you read this, my desk at my 9-to-5 job will belong to someone else. Until last week, I worked at IAC, the parent company of some of the most visited digital media properties on the web, including CollegeHumor and Match.com. It’s been a heck of a ride. I was lucky enough to be a part of a startup team both pre- and post-acquisition. I’ve learned important lessons that I’ll never forget.
I’ve always dreamed of striking out on my own, but last week I took the step that separates the wantrapreneurs from the entrepreneurs: I quit my job to work on my startup. It’s the scariest decision that I’ve ever made, but it’s not the hardest. I’ve been preparing for this jump, and you should be too if you are thinking of leaving your steady paycheck behind.
So what is it about quitting a 9-to-5 gig that makes even the most driven and enthusiastic startup founders shudder in fear (if only on the inside)? Perhaps this fear stems from the entrepreneur archetype popularized by Paul Graham’s Y Combinator: the ramen-noodle-eating co-founder coding late into the night. This characterization of the harshness of startup life can make talented people with mortgages, student loans, and children to care for feel like they will never be able to quit their job to work on their startup full-time. The truth is that you can make it happen, even if you aren’t a 19-year-old ivy league drop-out with zero debt.
If you are thinking about quitting your job and you need someone to push you, allow me to help. I don’t have a Computer Science degree from Stanford, I’m not free of financial obligations, and on most days I like to eat more than just pizza and beer. I have learned some valuable lessons in the transition from full-time employee to startup founder. Here are the big ones that you have to address before you strike out on your own.
Work for a startup.
If you have never worked for a startup, go directly to get a job at someone else’s startup. Do not pass Go. Do not collect $200. There is nothing that will guarantee months of misery and failure more than leaving a giant corporation with a chip on your shoulder to start your own company if you have no prior startup experience. If you’re not a developer, do business development, social media, ad sales, or customer service at a startup. You’ll learn the importance of A/B testing and product rollout strategy, plus you’ll be exposed to a variety of new technologies depending on how bleeding edge your team is.
Even if the startup that you work for is in a different industry, you’ll learn the dance of startups. The uncertainty of a payoff combined with the extreme highs and lows that come with the creative process is the common thread that attracts startup junkies like myself to the lifestyle. Even if you know you are cut out for it, you’ll still be surprised by what you don’t know you don’t know.
I’ve been lucky to work directly under passionate and intelligent entrepreneurs in a few different industries. One startup that I worked for failed miserably. The other was acquired by IAC for an undisclosed sum, and I stayed on the team after the acquisition. There is no better business education than the experience of sticking with companies through major milestones.
Make your startup worth it.
My husband and I are co-founders, and we have gone through four startup ideas before we came up with the big idea that we both agreed was worth the sacrifice.
Learn to live with less.
One of my favorite photos of Steve Jobs is an image taken in 1982. Jobs is sitting in his sparsely furnished living room, surrounded by a lamp and a stereo. Although you don’t have to get that minimal when you are starting a company, you should consider how you can live with less. This can mean different things for different people. Maybe you can learn to live with less dinners out, or less yearly vacations.
In my case, we decided to live with less possessions. Our tiny dinner table doubles as my desk. We gave away unnecessary furniture, outdated clothes, and I even sold my triathlon bike. While we can live with less “stuff,” we decided to keep a few dinners out per week just for sanity’s sake. Maybe it’s the opposite for you.
There is a concept in Zen Buddhism called “the empty cup.” Think of the cup as your life. When a cup is full, there is no space for anything new to enter the cup. By making space in your life, you’ll be able to fill it with the new obligations that come with founding a company.
This one is obvious, but it can be the hardest to actually do. There is nothing that will lower the anxiety of leaving your full-time job like having money saved in the bank. Start saving as soon as you think you might want to leave your job. Don’t wait until you have decided to leave for sure. This will give you enough time to save, and you’ll be putting money in the bank consistently.
Cut unnecessary expenses.
No matter how frugal you think you live now, there is always room to cut more. Look for hidden expenses in your daily life that could be siphoning off your bank account. The two smallest and most consistent money sinkholes are atm fees and monthly subscription fees that you have forgotten about.
In our household, we saved hundreds of dollars per month by slashing our web app subscription fees. We canceled our Vimeo account, 37signals product suite, and my Birchbox subscription. Instead of Basecamp by 37signals, we now use the free app Trello.
Make all necessary doctor appointments.
While you still have health insurance, schedule all of your maintenance appointments. Get your teeth cleaned, go get a physical, and get extra blood work done. If you have been putting off any procedures like getting a cavity filled, now is the time to do it.
Train for the startup marathon by living the entrepreneur lifestyle for a few months before you jump in.
How do you know you are willing to work 16+ hour days, on weekends, and holidays? Try it out before you commit to the life of a full-time entrepreneur.
I started taking on freelance work a few months ago while working my 9-to-5 job and doing market research for my startup. By taking on more than you think you can handle, you’ll quickly identify your weak points. Mine was organization. Over the past few months, I’ve created task systems to process loads of incoming information, contacts, work, and email. If you don’t have a system to process all of the inputs that you are responsible for as a co-founder, you’ll miss important deadlines and fall behind in your work.
Hire a great lawyer and accountant.
There are two types of people that are equally loathed and beloved in society: lawyers and accountants. When you are founding a company, you’ll find that your lawyer and your accountant will become your best friends. You must pay careful attention to both the corporate and financial structure of your startup to avoid serious problems down the road. Companies like LegalZoom offer legal templates that founders can download and fill out as official documents, but nothing can come close to the legal advice that many lawyers are now offering in startup incorporation packages. By working with a lawyer, you’ll receive personalized advice about your company, including how many shares to issue, how to set a vesting schedule.
Find an accountant who is skilled at working with startups. Accountants who specialize in high growth businesses will be able to answer key questions in each phase of your company.
Take on your former employer as a contracting client.
If you will be bootstrapping the early phases of your startup, you will probably need some additional income to pay your personal expenses, like rent. The best way to do this is to take on your former employer as a client. It’s optimal for both parties, because your boss won’t have to hire and train your replacement, and you won’t have the added stress of finding work to pay the bills as you are struggling to build the prototype of your product.
Don’t have a backup plan.
In startup circles, there is an axiom that goes like this: Ideas are cheap. It’s the execution that matters. If that’s the case, then there’s no better commitment to make to your “nights and weekends startup” than to throw yourself into it full-time. The first step to executing on your idea is to put everything you have into it. Don’t have a backup plan. Backup plans allow you to head for the door during the dark hours when you are unsure about your abilities and your idea.
Although I’m just at the beginning of my entrepreneurial journey, lining up for the race is farther than most people will ever get. Being paralyzed with fear while clinging to a steady paycheck is far worse than going after the dream of making a difference in the world, even if that means making mistakes along the way. Although it’s impossible to predict success, the likelihood is much higher when you prepare before making the leap.