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Should Startup Founders Keep Their Day Job?

Posted on the 23 March 2011 by Martin Zwilling @StartupPro

keep-your-day-job-manMany entrepreneurs I know feel guilty about not quitting their day job when initiating their startup, worrying about not giving their all to an employer, juggling the multiple roles, or even a legal conflict of interest. I’ll try to offer some guidelines to address these issues, but I generally recommend you keep the day job until your new company is producing real revenue.

The exceptions to this advice would be if you are being paid for your startup position by external funding, or if you have enough money in the bank for both you and the startup to survive for at least a year. Otherwise, I suggest that founders be up-front with their employers, with an honest commitment that the “side” work on the potential startup will not jeopardize committed results.

Then there are the more pragmatic questions of how to make concurrent startup efforts productive. Many people simply can’t handle multitasking, so they struggle for years doing both, and really do both jobs poorly. Even if you are not in that category, I recommend the following guidelines, summarized from real experiences of Babak Nivi on Venture Hacks a few years ago:

  1. Team with a partner. In a part-time effort, a co-founder is essential to keeping you on-track and working. At some point, you’ll hit a motivation wall, but if you have a partner who is depending on you, you will find a way past that. If you don’t have a partner, you’ll often lose interest and find something else to entertain you.

  2. Pick a day and time per week where you always work together. Babek and his co-founder worked one weekday evening and one weekend day, every week. That doesn’t mean they weren’t working other days, but keeping a fixed schedule will help you through the phases of the project that might not be so much fun.

  3. Set some real milestones. What will it take for everyone to dive in full-time? 5,000 active users? 10,000 uniques a week? Funding? The target should be a shared understanding. You don’t want one founder who is ready to go full-time while the other has reservations. That’s not fair to either one, and it leads to disasters.

  4. Pick an idea that is viable part-time. Every startup is a hypothesis. If your hypothesis is, “we can build a better web-based chat client”, that’s something you could test quickly. If your hypothesis is “we can build a car that runs on lemonade”, that’s just not going to work as a part-time effort.

  5. Understand that your first version will not be the final. Be prepared for a long journey and be surprised if your startup is an immediate hit. So with your first version, look for the tiny little flicker than you might be onto something. Use it to motivate you to make it better. Every week, make it better than last week and see if that flicker of light can be fanned into a tiny flame.

  6. Use every spare moment at work getting smarter. While others are enjoying coffee or lunch, use the time to update yourself on your technology, your competitors, angel investors, or how to incorporate a new business. That said, be aware of the fuzzy line between using your cool-down time at work for your startup and stealing time or resources from your employer. If you’re paid to do a job, you need to do it first.

You also need to be realistic about the conflict of interest issue. If your startup could even have the appearance of competing with your employer’s business, you could lose everything later. Also check any employment agreement you may have signed that might dictate that “any” invention or development during employment is the property of that company.

Obviously, the alternative of quitting your day job early avoids these issues, and also removes any excuse that your startup is merely a hobby. There is nothing that drives a team like the fear of debt, starvation, and visible failure. Even you may be surprised what you can accomplish under pressure.


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