Jake Hare is the founder and CEO of launchpeer.
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Everyone has heard the story. An ordinary person has a great business idea, quits his job to pursue it and manages to exceed his wildest dreams. So swinging in front of the fences, that’s what it’s all about as an entrepreneur, right?
Not so fast. I get the pull to march out of your box and dive headfirst into your passion project. Still, that’s not always the best way to start a startup. I think you’re much better off with hybrid entrepreneurship — moonlighting or going part-time — until your new business is established enough to command your full attention.
You often hear that doing business is about taking risks. But that’s only a half-truth. What really matters is risk management. And leaving your job when your startup is brand new is usually too big a gamble.
Quitting puts you on a countdown clock.
This is the most obvious reason not to give up your day job. Without a regular salary, you can only work on your business until one of three things happens:
1. You start making a profit.
2. You raise capital.
3. You burn your savings.
That means you have less room to experiment. Most entrepreneurs need to tweak, reassess, and spin at least a few times before their business really clicks. A day job gives you the freedom to keep trying different tactics without worrying about how you pay your rent.
Relying on your startup to pay your bills also pushes you toward strategies that promise a quick, easy path to monetization. Don’t get me wrong, I’m a big fan of bootstrapping. But sometimes long-term or out-of-the-box approaches are a better fit for your idea. And those small risks will seem even more daunting if you’ve already taken the big risk of quitting.
You must invest your earnings in growth.
It’s much easier to gain market share as an early-stage starter if you can put some money toward growth. That’s hard when you have to spend some of your earnings on your grocery bill.
Sure, it’s great if you can find creative ways to bring in customers without spending money. Many startups get their first few clients with tactics that take a long time and cost little, such as content marketing or building a brand on social media. Those kinds of approaches can get you started, but they tend to be slow and difficult to scale. You will grow faster the more revenue you can earn from paid advertising or sales team salaries.
The hybrid approach is supported by evidence.
Holding on to a steady job while working on your startup gives you a higher chance of success. Researchers at the University of Southern California to confirm a study that followed more than 5,000 entrepreneurs over a 14-year period found that startups were 33% more likely to survive if their founders didn’t quit their jobs right away. That’s an incredible advantage. I’d try just about anything (anything legal or ethical, that is) if I thought it would increase my chances by even half.
Would you like some anecdotes with your data? Look at Steve Wozniak. He stayed with Hewlett Packard for nearly a year after co-founding Apple. Sara Blakely, creator of Spanx, sold fax machines for two years while working on her prototype. There are plenty of other examples of entrepreneurs who played it safe and still won big.
It’s not always either-or.
Quitting your job is risky, but working full-time while pushing your startup within the margins can sound exhausting. The good news is that it is possible to find a middle ground.
Your employer may be willing to let you switch to part-time or take a more flexible schedule. Don’t be afraid to tell them why (as long as your startup isn’t directly competing with them). Letting your bosses know that you’re starting a business can lead to advice, networking opportunities, and sometimes even financing. If you really need to leave your current job, you can always take a part-time job or get into the gig economy while building your business.
Remember, there are many tools that can reduce the time your startup needs. For example, you can use Carrd to build your landing page, Jasper and ActiveCampaign to manage your marketing and Zapier to automate your daily tasks. With tools like these, running a business outside office hours can seem a lot less daunting.
Knowing when to make the leap is crucial.
Waiting too long to stop is also a mistake. Your startup could be put on the back burner forever as your day-to-day work continues to be prioritized. Or maybe you’re starting to let things slip because your business has grown too big to fit in your spare time.
That is why it is crucial to choose a finish line in advance. Set yourself a milestone; it could be a monthly revenue target, number of users, sales target, or any other relevant metric. Once you reach it, go all in.
As tempting as it is to keep the security of your day job, you will eventually have to make the switch. You shouldn’t take meaningless risks, but you’ll never succeed if you don’t take any risks at all.
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