Tuesday, July 8, 2014

Lesson #181: Should You Quit Your Full-Time Job Before Launching a Startup

Posted By: George Deeb - 7/08/2014

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Many entrepreneurs today work on their startups at night, while they are still working their full-time day jobs.  The question is: should entrepreneurs launch businesses with this part-time focus?  The answer is: not typically, but it all depends on your specific situation.

Here is the case for keeping your day job:
  • Startups require capital, and your day job can be that source of capital.
  • Startups are risky, and having a day job is your "safety net", until you are sure your startup has gained enough traction to feel comfortable quitting your day job.
Here is the case for quitting your day job:
  • Startups require focus and a lot of hard work, and working on it part-time is not doing it any justice.
  • Startups require speed and an all-out sprint to stay ahead of potential competitors.
  • Investors are not interested in backing a "part-time" team
  • Prospective employees are not interested in working for a "part-time" CEO 
So, as you can see, there are clear and material pros and cons on this subject.  But, the rationale for quitting your day job outweigh keeping your day job, where you can. 

My recommendation to entrepreneurs is as follows:
  • If you can afford to quit your day job, you should.  Anything less than full-time focus is disadvantaging the startup's focus, efficiency, speed, hiring and financeability.
  • If you cannot afford to quit your day job, you need to understand you are materially handicapping your odds of success.
  • You should only keep your day job in startups where you are not worried about keeping a first-mover advantage, up against current or potential future competitors.
  • That all said, if you are risk-averse (which questions whether or not you should even be an entrepreneur in the first place), getting your business to proof-of-concept first, before quitting your day-job, can certainly be an appealing option for you. 
Hopefully, this helps all of you entrepreneurs sitting on the fence on this decision, to make your leap, one way or the other.

For future posts, please follow me on Twitter at: @georgedeeb.

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