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I think we're getting dangerously close to that point with Pairagraph but would love some feedback from the community on how y'all would think about it.
Great question with no easy answer. For what it is worth, I recommend ensuring you have a stable revenue stream with Pairagraph that covers your ability to pay yourself for at least the basics e.g. housing, food, etc. before you quit. Early in my career, like many founders, I jumped feet first and went two years without any personal pay rationalized by putting every dollar back into the business. Early on it was great ~$250k in the first three months, all reinvested, and then early "guaranteed" leads fell through and converting new prospects become more challenging. Savings went quick, and personal pressures led to splits among the founders that eventually killed the company. Later, I learned this is a classic form of undercapitalization. Don't quit your day job until you have the cash to sustain 12-24 months of risk. If you have the cash and a plan - go for it - but remember cash is always king no matter your size.
Right, we're growing fast but don't have "a stable revenue stream that covers the basics e.g. housing, food, etc" so we'd need to raise money. I don't need money for fancy dinners, nice clothes, or vacations to the beach; but I would need a little bit of cash to pay for the essentials. I think we're almost to the point where Pairagraph could conceivably cover that.... but not yet!
Sounds like your close. Keep it up! You will be there soon.
If you have long-term Significant Others make sure they are signed up for this and be realistic about how long you're going to do this.
Also how you're going to deal if one of the team cannot live up to this commitment. Talk through this now even if has to be over friendly drinks, so you're not dealing with it when you may be in a hostile, stressed mood.
How quickly, with your team size and current traction, can you get to significant investment or income from the startup so that you reassure them about your financial future.
I was out of work when I started Touchgram going through the Founder Institute in 2014, picked up some minor consulting work & then had been working on it full-time for about 3 months when my co-founder quit. My wife wasn't prepared for his departure & I ended up getting another fulltime job and it was over 2 years before I returned to working on the product.
As I was starting again with minimal context (on top of an admittedly dodgy prototype) it was a solid 2 years of not bringing in income before there was even a version on the store. It's another 15 months down the track and I'm only just (hopefully) kicking off a significant growth with a new version then adding monetisation.
We are not financially endangered by this but it's not comfortable - it's one reason I've spent a lot of my time in the last 14 months painting the 550 sq m exterior of our house, as a trade-off.
That's not a penance - it's saving us a good $25K compared to someone else doing it as it's a complex two-storey house which commercial painters would have to scaffold more expensivly or use cherry-pickers. I regard it mostly as thinking time and have got through a lot of podcasts.
Just sharing the example to make you think about the wider implications.
Hey Andy, thanks so much for the thoughtful reply. Love that you painted your own house as a trade-off for doing what you love! (All that time for podcasts and thinking actually sounds pretty wonderful)
Love this question! Agree with @robbowers, no easy answer.
Love these stories:
- Wozniak built the Apple II while still at Hewlett Packard.
- Phil Knight built Nike on the side (with clear market fit) for as long as he possibly could. Grinded it out as an accountant, I believe, at first, then transitioned to a Professor to afford more free hours. Then eventually, forced by the success of the company, went full-time.
If it's clear that you need to quit in order to physically keep up with support tickets / demand, then do it! Otherwise, don't.
But Woz had Steve and Phil had Johnson.
Idk. For me it just depends on the competencies of the team as a whole. I'd suggest you don't all go full-time at once. Consider one at a time, based on who can get you to ramen profitability soonest.
Honestly. It costed my 15 year couple. Don't. Unless you have at least a revenu of at least 50% of your day job. Plus growing.
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