With all the attention in tech being on the startups and the rampant acceleration of innovation and valuation at those startups, I hear from a lot of people ready to scratch their itch for starting a company.
Do you think you’re ready to leave your company and build the next leprechaun or unicorn?
Maybe you’ve found the right business that you can’t resist pursuing. Maybe your family situation is finally ripe for you to make the leap. Maybe you’ve finally set yourself up financially so that you can make it happen. What else do you need to cover before you make the leap?
You’re ready to leave your job when…
- You’ve spoken to customers, lots of customers, and have refined your product and biz model based on those activities.
- You’ve tested the economics of your business and have some evidence that the economics you assumed when you started will work.
- You understand your marketing and distribution channels and have begun discussions, begun testing, or at least have a clear set of experiments that you’ll be working with when you’re ready.
- If you’ve done 1-3, you shouldn’t be too far off from understanding when you’ll see revenue coming in the door and this will help you understand how much savings you should have set aside. You’re past success will be the basis for funding your attempt at your future.
- Once you have living expenses sorted out, you also need to understand the initial capital costs of the business (proper formation, founders agreements, IP assignment, technology, branding, and so on). Some of this you can do yourself, but most of it you should find a smart partner who will help you grow your business over time.
You should wait if…
- You’re thinking of asking investors for money before you leave so you can pay yourself a salary while you figure out if this ‘startup thing’ is what you want to do.
- You have four ideas and aren’t yet sure which one you’re really committed to doing yet.
- You haven’t convinced anyone else to join you on your journey.
- Your family and social group aren’t supportive… at some point you’ll need their help.
- You haven’t spoken with lots and lots of customers in the target market you’re aiming for.
What if you don’t have all these things sorted out and you want to just say fuck it and leave anyway? I’m not going to tell you that it won’t work out… I will tell you that I see more people struggling who go that route, a lot more. The folks who have these things figured out move much quicker and are able to do so from a position of confidence.
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Don’t leave until it’s a self-sustaining business. Investors do not fund risk so you will need to shoulder it all yourself. If you’re willing to work for free until you hit profitability then that’s your personal choice, but don’t expect an investor to share the risk with you.
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