There seems to be a big debate these days about the best approach to starting a new business. Some argue the only way to start is to drop everything and jump in with both feet, while others recommend an overlapped approach to the lifestyle, including not quitting your day job until you have revenue and a proven business model. I’m definitely a proponent of this latter approach.
Billionaire entrepreneur and "Shark Tank" co-host Mark Cuban is an outspoken proponent of the all-in early approach, and has made it clear that he gives no credibility and low odds to founders seeking funding who have not fully committed their time and efforts to their cause. Obviously his approach of absolute focus, getting up early, staying up late has worked for him.
On the other hand, I just finished a new book, “The 10% Entrepreneur: Live Your Startup Dream Without Quitting Your Day Job,” by Patrick J. McGinnis, a well-known venture capitalist and private equity investor. He makes some good points in the book for the overlapped entrepreneur approach that I espouse:
One job is not enough these days. The smartest people I know these days always have several things going concurrently – and more in the queue. With the rapid pace of change and all the unknowns in the world, everyone should be working on multiple options, including a conventional paying job as well as an entrepreneurial opportunity.
The early entrepreneur lifestyle is not much fun. Even with high passion and a good cause, early startup efforts are stressful, lonely, and things always take longer than expected. I see no reason not to balance these frustrations with the satisfaction of more conventional work accomplishments and the people relationships we all need to thrive.
Startups cost money but don’t pay a salary before revenue. Most entrepreneurs don’t get the satisfaction of a salary for the first couple of years, even if their startup is well funded by investors. Living off credit cards and borrowed money, instead of other work income, can ruin your personal finances and kill your startup motivation far too early.
Maintain the status and affirmation of an existing job. Not all friends and family will see your entrepreneurial efforts as visionary and prestigious. You can choose to keep your startup efforts “below the radar” to keep peace in the family until your business has the momentum and visibility to overcome the qualms of skeptics important to you.
Make sure you have the right idea before risking all. I very much respect the passion and enthusiasm of a new entrepreneur, but I’m seen enough as a startup advisor to know that more time and effort is often required as a reality check. Reality checks are best before you have put everything on the line, essentially eliminating the ability to back out.
Odds are you are going to fail before you succeed. Historical and current statistics still show the chances of failure on any given startup are better than even. The good news is that you can learn from that failure, improving future odds. Having another job is more good news, since it improves the financial, emotional, and social ability to try again.
In my view, entrepreneurship is an endurance sport, rather than a quick dash to success. When you are starting a new venture, raising capital, and landing those initial customers, the obstacles keep coming, so you need all the flexibility and resilience you can muster. It pays to be able to step into a more familiar role from time to time to clear you mind and hone your strategy.
Over time, I do find that the entrepreneurial lifestyle is more addictive and usually more fulfilling than more conventional business roles. As a result, I know many successful entrepreneurs, including Mark Cuban, who can’t resist starting or investing in a second or third business concurrently, or even hundreds. That’s another variation of a part-time entrepreneur.
As a mentor to aspiring entrepreneurs, I often advise them to start with another alternative, of working for an existing startup, before or while starting their own. I recognize that everyone is unique, with different levels of risk tolerance, energy, and motivation. Thus I encourage you to take a hard look in the mirror, and you’ll know when you are ready to be a full-time entrepreneur.