- Many years ago, I got super-excited with an idea for a new startup. I worked at Microsoft at that point. After thinking for several weeks, I decided to quit Microsoft and dedicate my entire time to the new venture. I told my manager that I would be quitting in 4 months, so they would have enough time to find a replacement. I also did my best to finish everything I could finish, and to pass to my successor all the remaining projects in perfect shape.
- Every 2–3 weeks my manager tried to convince me to stay at Microsoft, but with no result. He made his final attempt in our weekly 1:1 just a few days before my last day. When I reaffirmed the desire to leave, he asked about my startup. I spent 15 minutes describing the idea and what we had achieved so far. Eventually, my enthusiasm ignited him, and he asked me whether I would accept him as an angel investor. Of course, I responded “Yes”. This is how we got the first $50,000 of seed money, and a Microsoft VP as an investor.
- That first investment gave us momentum. We recruited a few other prominent angels within just a month of me quitting Microsoft. Note, I never intended to raise money from my manager. It just happened this way because he did not want me to go. And he did not want me to go because I did my job well, even knowing that I would be leaving soon.
I’ve spent the last 10 years running startups. In addition, I have been occasionally teaching workshops around the world about launching new startups. Workshop participants always ask a lot of questions; some of the popular ones are:
- I have this great idea for a startup, but I am currently employed full-time. How do I start? Should I quit my job to pursue the idea? What should be my first steps?
I always begin answering with the story you just read above, and then I proceed with the list of recommendations. The story above is a perfect illustration to the very first advice from this list:
Plan Your Transition, Leave on a Good Note
1. Do not burn bridges. One might think that, because you are leaving, it’s OK to start doing a bit less at your current job. It will get you more time to spend on your brand-new startup, right? Wrong! The reality is different; you need to go an extra mile to make sure your employer will fight for you. When you leave, you want to do it in a way that would allow you to return (or, at least get a good reference) in case things go south with the startup. And for an absolute majority of startups, things do go south! Karma matters; sometimes events have an unexpected turn, as you have seen in the story at the beginning of the post.
2. Plan the transition phase. Before leaving, you will need to spend some time as a “weekend entrepreneur”, working both on your current job and your startup. I would recommend you spend 3–6 months in this mode. You will need to put extra efforts on your current job to ensure a smooth transition. You will also need to invest a lot of efforts into the startup; the more you do now, the better prepared you will be when you switch to running the startup full time. The only way to succeed with such a load is to plan carefully. This post will give you some ideas on what should go into your plan.
Learn the “Rules of the Game” for Both Sides: Founders and Investors
3. Teach yourself to be an entrepreneur. If it’s going to be your first startup, you need to invest some time to understand how the startup world works. Study books from my must-read list. Watch videos from Y-Combinator’s Startup School. Go to meetups and conferences, and build a network of entrepreneurs to learn from.
4. Put yourself into the investor’s shoes. VCs invest money into startups and entrepreneurs invest time, but they are essentially the same. You need to learn how VCs operate. First, it will help you make a better decision on whether you want to invest your time into a startup. Second, it will help you be more efficient while raising money for your company. Read my “The VC of You” post for details.
Contemplate Many Ideas, Validate the Best Ones, Only Then Decide
5. Brainstorm and evaluate. Think about a few dozen ideas before picking which one to implement. An average VC looks at between 100 and 400 startups before investing money into just one of them. You are about to invest your time, which is more valuable than money. So, do not jump into the first idea which excites you; take your time to analyze and compare a significant number of alternatives. Define in advance your selection criteria (you can simply use my 10¹⁰ Framework) and apply them to compare the ideas.
6. Validate your assumptions before you quit. Your startup idea might sound fantastic. It could pass all the possible thought experiments and theoretical tests. But so did hundreds of thousands of ideas whose authors in the past raised money for their startups, only to shut down those companies a few years later. You don’t want to quit your job to start a soon-to-go-bankrupt company, do you?
Will customers pay for your product? Will you be able to exponentially grow your customer base? As a weekend entrepreneur, you should focus on answering these questions. Spend a couple of months validating the assumptions behind your idea. Talk to potential customers from your network. Build a few simple landing pages with an email signup form for your future product. Experiment with promoting it on Google/Facebook. Hire a freelancer and create a Concierge MVP …. You do know what Concierge MVP is, don’t you? If you don’t, read these 11 books before moving any further with your startup.
Cash is King
7. Save enough money to live with no salary for 12+ months. If you plan to move to Silicon Valley in 2019, the budget will be $6,000 per month for a single person’s living expenses (apartment, car, food, etc.); add to this your initial business-related expenses, e.g. attending conferences or paying lawyers, and it will get you to at least $120,000 that you need to have in the bank.
8. Do your best to get the first paying customers before you quit. First revenue will serve as a solid validation for your idea and also help you mitigate financial risks. It will give you more time to operate without outside investment, and at the same time improve your odds of raising venture money. If you are in a B2B segment, try to secure pre-payment from a few enterprises who are painfully struggling without a product like yours. If you are in B2C, consider crowdfunding.
Startup Is Not Just Work … It’s Your Life
9. Develop self-discipline and be ready to sacrifice a lot
- Am I supposed to do all the above in my free time, while working full time on the current job? And also, go an extra mile for the current employer? How many hours a week will I need to work? Will I have any life at all? Will I even have time to sleep?
These are all the legitimate questions to ask at this point. And the answer is: Yes, you will need to work 70 hours a week to accomplish everything described here. Probably more than 70 hours. Welcome aboard! Later, once you quit the current job and start working on your startup full time, your load will increase even further. Are you ready? … And yes, you will have to explicitly allocate time to eat, sleep, and exercise; if you burn yourself, your startup will die.
10. Align your startup’s and personal mantras. In a book “The Art of the Start”, Guy Kawasaki introduces a concept of a startup mantra: “a three- to four-word explanation of the meaning that a startup is seeking to make”. Sometimes in his talks, Guy also mentions a personal mantra: “how you want to be remembered by people”. In my opinion, it is extremely important that your startup’s mantra resonates with your personal mantra.
You are going to spend several years of your life doing nothing but running a company; so, make sure the company is doing something that really matters to you. Will you feel happy working in your startup 2 years from now? 5 years? 10 years? When you die, do you want people to remember this startup as your biggest achievement in your life? This is not an abstract philosophical question, it’s a very practical one: it’s a question of whether you are going to have an internal source of additional motivation and energy. … BTW, you did read “The Art of the Start”, didn’t you? If you didn’t, read these books before moving any further with your startup.
Now, it’s quiz time. In this post, I have offered you 10 recommendations on how to approach a “project” of quitting your current job and launching a startup. All recommendations are battle-tested and are based on my personal experience and the experience of entrepreneurs from my network. One of these recommendations, however, is way more important than all the others combined. Which one is it? Please review the list above, think for a few minutes, and then make your choice. In a moment I will give you my answer, but please read it only after you have your solution for the quiz.
Ready? Have you decided which one of the 10 recommendations is the most important? If no, please stop right away and make your choice. If yes, write it on a piece of paper.
Now, take a look at my answer and compare it with yours. If your answer differs from mine, forget about quitting your job for now and instead focus on going through the must-read books and Y-Combinator’s videos.
Good luck and may the venture force be with you.