Entrepreneur Office Hours - Issue #34
Should you quit your job to work on your startup full time? And why frugal entrepreneurs are more likely to fail.
Continuing with the theme of last week’s issue, I seem to still be focusing on the stupid mistakes I’ve made as an entrepreneur. For better and for worse, it’s a well that won’t run dry anytime soon.
Specifically, in one of my articles this week I discuss how being too frugal almost killed my companies. And, in the Q&A segment at the end I share how trying to run a startup and work another job didn’t end well.
Also, in a bit of a throwback to my early career on the Internet as a Web advertising guy, I had a fun opportunity to speak with John Danner, the man who launched the first Internet advertising startup. When we consider how important advertising is to the Web, that’s a pretty cool claim to fame. Or, depending on your perspective about the impacts of advertising, maybe it’s something to be ashamed of. Either way, the conversation was great and definitely worth a listen.
Thanks, as always, for reading. I’m 34 issues into creating Entrepreneur Office Hours at this point, and I can’t believe how much the audience has grown. And… hey… let’s keep it up! Share this email with someone you think might enjoy it. Just press that little “forward” button in your email client and type in an email address or twenty. You know you want to…
I Couldn’t Spend Money Fast Enough, and It Almost Killed My Startup
In the early days of building a startup, being a frugal entrepreneur can help your company survive. However, that same penny pinching mentality can also be a surprising startup killer.
The "Horrible" CEO Who Invented Internet Advertising
Unless you’re an Internet history buff, you’ve probably never heard of NetGravity. However, NetGravity is, in some ways, one of the most important startups in Internet history. It was the first Internet advertising company. Considering much of the Internet these days relies on advertising, being the company that started the online advertising industry is… well… kind of a big deal.
Hear the full story of how NetGravity got started on the new episode of Web Masters. Listen now on:
…or search “Web Masters” wherever you listen to your favorite podcasts.
It's Time for You to Stop Talking About Your Startup Idea
Entrepreneurs love talking about their ideas. But there's a huge problem with telling people about your "brilliant" startup idea. Do you know what it is? (Hint: It's not that someone else is going to steal it!)
Office Hours Q&A
Just read your excellent article about how entrepreneurs should spend time working for other companies before launching their own businesses. I definitely agree.
It made me curious. What’s your take on building a startup while working for another company? Like in the evenings and on weekends.
Me and a couple buddies I work with are kicking around a startup idea and we’re trying to figure out whether we should go full time on it or take more of a cautious approach and just do it on the side.
Thanks for all these great articles every week! Loving the podcast, too!
If you’d asked me when I was in my 20s, I would have said, “You’re either ‘all-in’ on your startup, or it’s definitely going to fail.” I even remember times when I’d meet a founder with a “nights and weekends” startup at some sort of networking event, and I’d immediately write the person off in my head as being someone I shouldn’t bother networking with because the person obviously wasn’t a serious enough entrepreneur and the company would fail.
Then I got into my early 30s, had kids and more responsibility, and my opinion changed. I saw the advantage/importance of maintaining a stable income, and I could empathize with entrepreneurs who needed to keep their full time jobs while working on their startups. However, I suppose my opinion didn’t necessarily change. I still believed the chances of startup success while only working part time were significantly less.
In other words, in both situations, I still saw startups as being something that required 100% commitment.
For what it’s worth, I also lived this exact type of failure. In the final years of my most recent startup, I began teaching entrepreneurship courses at Duke. As much as I was sure I could handle the extra commitment, in retrospect, I definitely sacrificed some portion of my company’s ultimate success.
Do I regret that choice? No. I love where my career has taken me. But it still underscores my point about the limitations of focusing on multiple jobs/careers at the same time. Ultimately, there are only so many hours in a day. Every minute you’re working on something else is a minute you’re not working on your startup. Those choices have consequences.
Despite the unavoidable fact that time is limited and entrepreneurs can only accomplish so much in a given day, as I’ve gotten older and my understanding of entrepreneurship has evolved, I have what I hope is a more nuanced perspective about building startups “on the side.”
Back when I thought startup success meant either 100% dedication or failure, I had a very narrow view of entrepreneurship. I believed the only types of startups that mattered had to be on a path toward becoming full-time, venture-style (or similar) companies. In other words, they needed to be big businesses with lots of employees, lots of customers, lots of impact, and lots of money flowing through them.
In retrospect, that perspective on startups is obviously ridiculously limited. Founders can be building plenty of different types of companies and/or ventures. Not all of them are -- or even should be -- on a trajectory toward becoming large companies. Because of that, a big part of the answer to this question relates to the type of company you’re building.
Are you trying to build a billion dollar, Silicon Valley unicorn? If so, the kind of time and work you’re going to need to do is going to be different than if you’re selling scented candles on Etsy for a few extra bucks a month.
The other factor that needs to be considered is the stage of your venture. If you’re still in the validation phase where you’re trying to prove the opportunity, that’s very different than if you’re generating $20k/mo and growing 30% month-over-month. In the former situation, before you’ve determined whether a business opportunity really exists, giving up your “day job” (and income!) is probably premature. In the latter situation, your venture clearly has significant upside. By not giving it more time/attention, you may be setting yourself up to fail. At the very least, you’re setting yourself up to not reach your venture’s full potential.
I realize my answer here is more of a non-answer. I’m basically telling you “it depends.” But, at this point in my entrepreneurial journey, I’m pretty sure it’s the right answer.
In your case, my non-answer means looking carefully at what you’re working on, what you hope it might become, and how far along it is. Use that information to decide on the right moment to leave your current job and go full time on your startup.
Got startup questions of your own? Reply to this email with whatever you want to know, and I’ll do my best to answer!