Super Angel Ron Conway To Would-Be Startups: Don't Quit Your Day Jobs

http://www.alleyinsider.com/2008/10/super-angel-ron-conway-to-would-be-startups-don-t-quit-your-day-jobs

by vascoos01 • 18 years ago

22 20 18 years ago

alleyinsider.com

prakash3• 18 years ago

Now would be a good time to apply to YC, or start startups in the FogCreek/37Signals way.

tptacek• 18 years ago

Both Fog Creek and 37Signals started by consulting to Fortune 500 companies. You think now's a good time to do that?

prakash3• 18 years ago

I didn't know that, I knew they consulted at companies. Do you have a link to which ones they consulted at?

maxklein2• 18 years ago

prakash, all due respect, but are those really the companies you want to quote? FogCreek and 37Signals are not the best or most profitable companies making money off these intranet, and they are not a 'way' of starting companies. They are just the loudest. Many, many companies started off like those two and are now pretty (Symantec, ZoneAlarm, Winzip). Those are the real success stories, not people who make their money by giving talks on how to make money.

rrf• 18 years ago

Isn't their "way" simply: "brilliant" product plus price = profit? Seems sensible to me.

jonny_noog3• 18 years ago

I think you're missing one point that I get from 37Signals, which is the "be happy baking good bread" angle that DHH has espoused on at least one occasion I can remember. What he means by this is that not everyone feels like they have to crush Google to call themselves a success. Some people would be happy to be doing a (likely self determined) job they enjoy that provides what they need to maintain their chosen lifestyle. There's a lot of niches out there waiting to be found.

Granted, not everyone is happy just to "bake good bread" and that's cool, I'll be the first to cheer you on as you enter the area with Google/MS/Symantec/Digg/Facebook/whoever but on the flip side, don't assume that no one is.

This may be a hard concept for a lot of people to grok in a world addicted to "more" and possibly an unrealistic concept to entertain if you have a big VC expecting X return on their investment in Y amount of time.

But to write off companies that obviously have their own idea of how to proceed and seem to be doing just fine from their point of view is overly myopic on your part.

prakash3• 18 years ago

I was using FogCreek/37 as an example in not taking money, start small, consult, grow organically type of example. Hard to raise money in this environment, and hence I used YC.

Those are the real success stories, not people who make their money by giving talks on how to make money.

I think there is a little more to both those companies :-), in any case if there is value in what they are saying that is akin to building something users want.

jcromartie• 18 years ago

I love how there are both "a recession is a great time to join a startup" and "it's a recession, don't quit your day job" stories on the front page at the same time.

I know the advice isn't mutually exclusive; but that was a confusing front page the first time I saw it.

steveplace• 18 years ago

But you don't understand. I don't like my dayjob.

MicahWedemeyer2• 18 years ago

The worst case scenario for a startup entrepreneur is failing out and having to get another day job. Skilled software engineers are still in high demand, and a recession will not change that. Therefore, the safety net (corporate America) is still there for anyone who quits.

However, if you like your current day job, it might not be a bad idea to hold on to it for a while.

liuliu• 18 years ago

I think the "cut cost" idea is correct. Startups who survived from series A fund should be really careful about its cash flow statement. Especially in the economic winter, who can last longer who will be able to see the spring sunrise.

wheels2• 18 years ago

Read more carefully what he says, and I agree 100%:

Keep working until you've saved enough money to live for a year. If you've got a decent IT salary and really learn to tighten your belt, you can do that in 6 months.

  - Quit driving and use public transit.
  - Never buy anything but generic stuff.  Shop at Aldi or somewhere that only sells cheap stuff.
  - Get a roommate.
  - Eat at home.
  - Pack your lunch.
  - One beer at the bar instead of three.
  - No new toys.  No, you don't need an iPhone.
  - No impulse purchases.  If you didn't go out to get it, you don't buy it.
  - No hotels.  Need to travel to pitch?  Find a friend's couch.

Once you've got that down, it's amazing how far you can go on a little bit of cash and how fast you can save it up if you need to. Learning to keep an eye on your cash also pays dividends on managing the burn-rate in your company.

MicahWedemeyer2• 18 years ago

Is a year really long enough to grow a business to the point where it can support you? I think a lot of startup types don't realize that sometimes the hockey stick is a little less vertical than you planned for, and there may be nothing you can do to speed it up.

It's disheartening to have a business that's growing, but not fast enough to stop you from hitting the brick wall one year out where you're out of money.

Retric• 18 years ago

1 year of total focus is plenty of time to find out of you should quit or go home. If you have positive cash flow and a solid company you can always borrow at below your growth rate and come out ahead. Take a part time job and keep living cheep. Or find some inverters.

wheels2• 18 years ago

I've not been there yet, but I'm pretty sure the answer is, "It depends."

I think you also have to have some real idea for how you're going to make money on the stuff. Even if you don't write a real business plan, sitting down and saying, "Our costs will be about this much. We'll make this much per user. So, we'll need to have this many users in a year of it's a no-go." -- doing that can give you an idea of if your ideas sound really nutty or not.

The brick wall is an important construct; it's an important idea to have there to keep you scared of what happens when the cash runs out ... but in reality, if you've got a stupidly low burn rate, you just do one week of consulting and then live for the next two months off of that.

Super Angel Ron Conway To Would-Be Startups: Don't Quit Your Day Jobs

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