You’re hanging out with friends or family and conversation drifts towards someone’s great idea for a business. “That’s an awesome idea; it's a great opportunity...you should totally do that! Everyone would use it and you’d absolutely crush it with that business!”. How often have you been part of a conversation like this? Me - too many times to count. And then a few months later you reconnect with the same people and they are still talking about how brilliant their idea is, but they haven’t acted on it. Still talking...
So when I hear about someone who took the plunge and decided to start a business around their great idea I want to give them a huge pat on the back for taking that step that most people don’t. Ideas are a dime a dozen. Entrepreneurs having the courage and passion to start a business is rare.
To have a chance for success with your new business idea, you have to dedicate yourself to it full-time. This often means leaving a well-paying job and relying on your partner or family to help pay the bills, or tapping into your savings, until your start-up gains traction and the business can afford to pay you a salary.
Yes, there are examples of new ventures starting as a side-hustle until they gain sufficient traction to afford paying salaries to founders. Phil Knight started the Blue Ribbon Shoe Company and taught accounting at community college to pay the bills while supporting his young family. That worked out, right? Yes, but these are more the exceptions rather than the norm, And the Blue Ribbon Shoe Company, from which Knight later launched Nike, was almost ten years in the making The founders of Atlassian, a successful software platform company from Australia, self-funded the company for over ten years and in the process dedicated all of their waking hours to building Atlassian.
If you’re going to look for outside investors to help take your idea into a business venture, it’ll be hard convincing people to invest if you’re not dedicated full-time to the start-up. When you raise money from angel investors or institutional investors typically the founders won’t be drawing a regular salary. Entrepreneurs that prepare themselves to act on their idea know this and it’s part of taking that leap into the start-up world.
Many people think they are ready for start-up life and jump in, only to leave the business after six to 12 months.
Start-up life is hard; things take longer to unfold than planned for; small fires erupt everyday that require immediate attention. Founders have to deal with idiosyncrasies and misaligned priorities all the time. These things take a toll and members of the founding team will often drop out of the race. True entrepreneurs persevere through these challenges, even if it’s their first time starting a business. But they either know they have the required grit or they discover they have grit by exhibiting the patience needed and maintaining the passion they had at the start, even in the later years of the journey.
They get a pat on the back for starting the journey and they get another pat on the back for sticking with the mission several years into it.
I had a family member with a good idea for a business. He and another family member spent a lot of time flushing out the product vision, go-to-market strategy, and the monetization model. When they shared their vision with me I was excited about it. Having been involved in many start-up businesses, I wanted to gauge their level of commitment to the idea and assess if they were going to actually take the plunge. If the answer was yes, I’d help them raise seed capital to get started and perhaps invest myself. It was a good idea. Part of that discussion drifted towards the allocation of founders shares. Always a fun topic. Through this discussion I learned that one of them was going to work on this full-time, the other wasn’t planning to leave their day job but could help out on evenings and weekends. The “part-timer” had some buddies that could help with coding, etc. Whatever. The part-timer wanted an equal equity stake as the full-timer because it was originally his idea. Like I said earlier...ideas are a dime a dozen. People who act on those ideas are rare.
The two of them never did launch a business together, but the “full-timer” did eventually launch a start-up loosely based on that original set of conversations. The “part-timer” stayed in his full-time job, and the family relations are great. I didn’t end up investing because the idea ended up moving in a direction that I was less excited about because the monetization strategy wasn’t the most lucrative, in my humble opinion.
I regularly take time to catch-up with the “full-timer”. He’s still working on the opportunity; he’s brought-in a great co-founder and some early team members. I have as much time for him as he’d like. He left the starting line and stayed in the race. Pat on the back!
Founding a company, or joining a start-up in the early days sounds exciting and a path to huge amounts of wealth. It is indeed an exciting journey and it *could* lead to a decent nest egg of savings or more. But it’s not for everyone and it’s ok if your personal situation doesn’t allow you to take the risk and make financial sacrifices. Those that pass on joining a start-up earn respect for making a good decision for them.
Those that take the plunge...a huge congratulations for joining the ranks of few who actually act on their ideas and give their best to make it happen. Enjoy the journey and never have any regrets. The things you learn and the people you meet along the way are worth more than any financial rewards that come out of it.
Thank you for investing time in reading this post. Questions and comments are always welcome.
Shail Paliwal
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