When to Turn Your Hobby into a Business
Don’t start none, won’t be none.
Nas, Made You Look
“So you’re suggesting that we quit our jobs in San Diego and move to San Francisco so that you can start a tech company?” My girlfriend (now wife) asked me in May of 2011.
“Yes. That’s precisely what I’m suggesting. It’s a great opportunity for both of us to work with some really talented people. We can stay with my parents in Santa Cruz for a month, while you find a job and we figure out where to live.” There was a month or two of deliberation, but we ultimately decided to pull the trigger and go for it.
That was the story of how I came to launch my last company. I quit my job and went all in on a tech startup. No backup plan. No house. No income. Starting a company is never glamorous, but starting a company in this fashion is a surefire way to go from totally secure to completely unstable. We’d agreed to stay at my parents’ house for a month or so while we “figured it all out.” One month turned into two. And two turned into four. By the time we finally made it to San Francisco we felt like we had already been on an intense emotional roller coaster ride. We had sacrificed a lot. After reflecting on this entire experience, I’ve told myself that I’d never start a company in that same way again. However, after advising and consulting many early stage companies, I’ve formulated some thoughts about how I would start my next company … if I were to do it again.
Time equals zero (t=0) the day you quit your job, go all in on a company, and rationally decide to have zero income. From that day forward, the clock is ticking. Regardless of whether you can last three months or three years without income, the clock is ticking. Tick, tock. When time equaled zero for my last company we didn’t have a complete team, a product, users/customers, and we were light years away from revenue. We hadn’t yet become a legal business entity in the state of California. We didn’t have a bank account. We didn’t even have a name yet. There’s no doubt that you eventually have to go all in, but I’d suggest getting as far along as you can before “time equals zero.”
If I were to start another company, I’d do the following things before I forced myself into time equals zero:
MUST DO
- Solidify a team that can build the core product
- Research market inside and out
- Create a product
GREAT TO DO
- Validate that the market exists
- Generate revenue
- Create a name and brand identity
NICE TO DO
- Form a business entity
- Open a business banking account
If you are considering launching a company, then I’d recommend emulating these two companies that have delayed their time equals zero to an optimal position:
Astrologicalendar — Wyatt Hull has created a beautifully designed zodiac calendar that is targeting the astrology, photography and design markets. The Astrologicalendar has created a calendar by aligning the months with the signs of the zodiac (rather than months in a traditional calendar) and includes major astrological events throughout the year. The Astrologicalendar has oversubscribed its Kickstarter goal by 350% and it still has a week to go (at the time of this writing). Product? Check. Validated market? Check. Revenue? Check. All of this has been done while Wyatt has had a full-time job. That seems like a much cozier time to go all in on a company rather than starting your time equals zero before having checked any of the boxes.
Alibi Interiors — Chris Curtis and Paige Shanahan have been crafting picture frames out of reclaimed wood that are tailored towards “Etsy-type” markets. It started as a backyard hobby, but they decided to take it more seriously when retailers began asking to carry Alibi Interiors’ product. They now have a warehouse in Santa Cruz with several employees and they’re pumping out thousands of frames each month. Alibi Interiors has even helped decorate the LinkedIn offices with their reclaimed wood projects. The company has allowed Chris to quit his job as a paramedic and go all in with Alibi Interiors without needing to start the ticking clock. Time never equaled zero for Chris. A true storybook transition in the world of entrepreneurship.
I want to be clear that these entrepreneurs go through the same psychological fears and self-doubts that all of us entrepreneurs have gone through. However, they’ve delayed their “time equals zero” for long enough to give their companies a legitimate shot at making it. A bit of planning can help you get further along and closer to your dream of having a successful company. There’s a lot to learn about how these entrepreneurs started their companies compared to how I started my last company.
The loudest sound that you can ever hear as an entrepreneur is tick, tock. It’ll keep you up at night. It’ll wake you up early. As soon as you go all in on your company, the clock starts ticking. And once it starts, it’s extremely difficult to make it stop.
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