6 Steps to Surviving Your First Startup
Remember that you are immensely capable and resourceful, and you will find a way. After all, there is no other option.
How do people survive financially after quitting their job and pursuing the entrepreneur route of a startup? Originally appeared on Quora – the knowledge- sharing network where people with unique insights answer compelling questions.
Answer by Daniel L. Jacobs, CEO and co-founder of Avanoo, on Quora: Source: inc.com
I’ve quit my job to found a startup twice. Both times, I went into massive personal credit card debt ($50,000 and $70,000). Both times the company I founded eventually raised investment capital, and things worked out. Here are the few things I’ve learned about surviving as a bootstrapped entrepreneur after quitting my job:
1. If you aren’t 100% sure, don’t even try to survive financially. Get your job back. Being an entrepreneur is painful, and not the romanticized kind of pain that ends in two hours and gets packaged like a Disney Special. It’s a dull, lingering, financially disastrous pain that is only worth it if there is absolutely nothing else you can see yourself doing. If it isn’t that black and white for you, get your job back. Now.
2. Plan for at least two years of financial suicide. That’s a bare
minimum.Most entrepreneurs begin their entrepreneurial journeys with rosy forecasts. If they can just do these four things, well heck, they’ll be the next Facebook or at least the next Instagram. That’s the fairytale, anyway. The reality is you’ll be probably trudging through financial quicksand for years. So plan for it.
3. Find a co-founder who is as wildly passionate as you are. Ideally, a rich one. When you’re lost and alone in the desert with no directions for how to find water, it is easy to let the hallucinations and ramen-induced vitamin deficiencies take hold. But when you have a co-founder, an advocate, a best friend who needs it as much as you do, then that person can keep you sane. If the person is rich, he or she can also take you out to dinner every now and then.
4. It doesn’t matter if you once lived like a king. You are now a pauper. Before I took the social entrepreneurial plunge, I was making easy money, driving a nice Mercedes, staying at 4-star New York City hotels, and enjoying life. It took me a few months to realize I was a pauper when I started my first business. The result: I used what could have been three years of savings in five months. Don’t be as stupid as I was.
5. If you hit zero, credit cards can be your best friend. But beware. For an entrepreneur, the only thing scarier than losing money every month is losing money you don’t have every month. But this is part of the financial suicide referenced earlier. When you’ve hit zero, 0% interest credit cards (readily available in the U.S. for the first 12 months if you have good credit) are your best friend.
** Use with caution: if you aren’t idiotically sure things will work out, return to step 1. Ask for your job back.
6. Work on your mental game. It’s the most valuable asset you have. It’s more important than money. Entrepreneurship is oftentimes a war of attrition. Those who can take the most pain and stay in the game the longest are the victors (if they are smart and continue adjusting all the time). The key to staying in the game isn’t money. It is knowing the truth about yourself and your team: that you are immensely capable and resourceful, and you will find a way. After all, there is no other option.
This question originally appeared on Quora – the knowledge sharing network where compelling questions are answered by people with unique insights.