Poll: What was your financial situation when you started your startup?

https://news.ycombinator.com/item?id=5404986

by niggler • 13 years ago

162 140 13 years ago

news.ycombinator.com

scoj• 13 years ago

It seems like there should be a few more options.

My case would be bootstrapping and paying bills through parttime contract work.

niggler16• 13 years ago

You are either doing contract work to extend your existing runway -- you saved up 6 months expenses, and the contract work is what allows you to let the business build for a few extra months (in which case you have a runway and the fourth option applies) -- or doing it to survive the next few months (in which case the last option applies)

Even though I disagree that it's a separate category, I added " You have an existing job and are continuing either full time or part time while you start the business"

tibbon• 13 years ago

Ditto. Contracting to make it work.

mindcrime2• 13 years ago

You left out an option:

"Nothing. No savings to speak of, but self-funding through my salary at a $DAYJOB or consulting."

That's pretty much where we are at Fogbeam Labs. The plus side is, we have a nearly infinite amount of runway, as long as the co-founders have jobs. The downside is, we're stuck working the $DAYJOBS 40 hours as week, and have to make time for the startup by night + weekend.

niggler16• 13 years ago

"self-funding through my salary at a $DAYJOB or consulting"

You are right, I didn't include the case of doing it on the side.

EDIT: added " You have an existing job and are continuing either full time or part time while you start the business"

bartonfink• 13 years ago

Do you think you'd be able to keep up the nights/weekends commitments without cofounders?

mindcrime2• 13 years ago

I can't speak for anybody else, but I slaved away on this for a year or more before a co-founder came onboard. How much longer it would have gone if that hadn't happened, is hard to say. I'm pretty persistent though.

orangethirty4• 13 years ago

Nothing, at all. No car. No job. Not even unemployment or government benefits. Started doing software consulting. Grew it to a good size. Then started doing business development consulting. That is still growing. Started a couple micro businesses, all of which are profitable. Developing Nuuton, and another micro.

All in 3 years time. (:

How did I do it? I don't take no for an answer.

Edit:

Oh, and no VC money.

vecinu2• 13 years ago

That sounds like a successful path to growing healthy companies.

I'd like to be in your 'business shoes'.

orangethirty4• 13 years ago

My path is not the same as yours. You have to find out for yourself. Go out, don't take no for an answer, and realize that the only thing keeping from success is failure. Fail more.

Kluny2• 13 years ago

How on earth do you convince people that they need to hire a consultant? Serious question.

orangethirty4• 13 years ago

Oh, that's easy. I simply advertise myself as such. Say, a post on HN or Craigslist (SF, Austin, NY, Denver) stating that I am available for hire. I put my rates in the ad to make sure that people who contact me can pay my rates (which are not really high, I don't charge that much), and sit back. Really simple. If you really want to hack it, just start blogging about the specific type of programming you want to do, and have your contact details in a place where people can see it. I did that for a short while, but I'm to busy to blog these days.

I also make sure to treat people as such, and not as walking dollar bills.

Try it out, it works.

Edit:

Here is a template for an ad you can use.

Headline/post title: $language_name developer/engineer/programmer available for hire.

Body:

$language_name developer/engineer/programmer available for hire. Rates are $rate. Mature and responsible. Focused on working with serious people.

Remote only.

* That's it. Dont give out too much information, because you are only pre-qualifying leads (people who respond to it are very likely to be able to afford your rates and meet your requirements). Then just work out the deal through email/phone/whatever.

obviouslygreen• 13 years ago

Looks like I'm in the majority on this one; there's no way I would've been able to save up a significant amount without then thinking "hey, if I saved up that much..." so I went with what I had. Fortunately not being a financial idiot goes a long way, even when that just means not living on debt.

While a side project might technically be a startup, for purposes like this poll, it hardly seems relevant; that doesn't carry nearly the risk -- real or perceived -- of actually working on something new full-time.

dude_abides• 13 years ago

You left out a (probably very common) option: You have an earning spouse.

niggler16• 13 years ago

While "Family" technically includes spouse, I see how my use suggests only parents, grandparents, and other relatives; I'll add "Earning Spouse" to the list

teuobk• 13 years ago

I had about two weeks of cash left at the time my product finally got traction. It was right down to the wire.

Ah, bootstrapping...

dopamean• 13 years ago

What is your product?

prawn• 13 years ago

From their profile: https://www.blurity.com/

herval• 13 years ago

On my first one, I had about 5k I gathered on small jobs during college years. Lost it all (and then some more), had to sleep in a client's floor for a week+ before I could afford a (windowless) roof again, but didn't give in for almost 2 years.

On my second, had enough to pay my bills from side-projects. Didn't make any money, but didn't get to sleep on the streets (which was sort of bittersweet - among the "survivors" from this period are companies such as Rovio, Gameloft and Kiloo)

On my third, had enough money not to have to work for a year or two. Got to sell the business in a good moment, for a reasonable amount.

From first to last, my actual anxiety about losing what I've amassed was exponentially higher on each try. I guess having more to lose plays a VERY important factor in determining how much effort/faith you put in a project (and how much pain can you endure before giving up)...

kurtko• 13 years ago

I guess I am in the majority - five years ago, I was just coming out of graduate school and gave myself three months to become 'ramen profitable'. To my amazement (and especially the amazement of folks around me) it worked out, just barely, which gave me license to keep going.

cajuntrep• 13 years ago

At JobKaster, we all have an existing job, and are working nights and weekends.

I'm married and have a baby on the way, so I have to be able to support my family and manage risk.

Could we grow faster if we were full time? Maybe. But we might as well prove that the project is going to be profitable before we jump all in!

bmac27• 13 years ago

Bootstrapping with day job. Will clear six months of runway by June, maybe sooner but would like to be throwing off at least enough cash to pay all of my non-rent expenses (which total less than my rent).

Once I get to six months and leave the day job, I'm contemplating taking on at least part-time client work to extend the runway a bit but I'm concerned about distractibility from the business. Really would like to go full bore on what I'm working on for six months. Plus I wouldn't know where to start with the client work, as I don't have any existing search marketing clients and I don't know how long it would take me to build up enough cache to bring in semi-regular consulting work. Ugh.

mixmax2• 13 years ago

You missed one, which I know a few people that have used: Live on social security for a year until you get your startup off the ground. If you don't you go get a normal job.

This, of course, requires that you live in one of the Nordic countries, or another welfare state. We don't have many advantages in the Nordic startup circles, but at least there's this :-)

niggler16• 13 years ago

Added "social welfare programs" which encompasses stuff like social security and unemployment benefits.

mixmax2• 13 years ago

Well it seems that this option now has one vote :-)

On a sidenote, it skews the poll quite badly when you add options this late. Nothing against you personally - just something to note.

icelancer• 13 years ago

>This, of course, requires that you live in one of the Nordic countries, or another welfare state. We don't have many advantages in the Nordic startup circles, but at least there's this :-)

Hardly. I lived on UI in America after being laid off of the Evil Empire in Redmond. There I planted the roots for my startup, which I run today.

nostromo• 13 years ago

Unemployment Benefits are actually pretty generous in many parts of the US. http://fileunemployment.org/unemployment-benefits-comparison...

zura• 13 years ago

What about health insurance for unemployed?

jhaglund• 13 years ago

You don't get unemployment if you voluntarily leave your job. edit: or a contractor.

imjk• 13 years ago

My startup journey consisted of incremental stages in terms of my financial growth. I started with some student loan money designated for books and learned some affiliate marketing arbitrage. The first day I spent $50 and made about $50 profit. I consistently doubled down my earnings for a few months until I had a pretty solid reserve. After about 2 years, I had decent amount of savings (in the low to mid six figures) and hadn't changed my lifestyle much at all. At this point I met my cofounders, who were in similar situations as myself, and we pooled most of our savings together to start our company.

Along the way I made several risky bets -- doubling down my money on more than one occasion -- but I was never really in that risky of a situation because I had so little to start with. I was just a relatively broke student with some student loan money.

niggler16• 13 years ago

"Along the way I made several risky bets -- doubling down my money on more than one occasion "

While not quite the same, your story reminded me of a story involving the Fedex founder gambling the last dollars in vegas and managing to make enough to continue the business:

http://www.businessweek.com/stories/2004-09-19/frederick-w-d...

Chris_Newton• 13 years ago

I voted “Side project+”, but in reality I do freelance contract work on one hand and have my start-up on the other, spending time on the latter as my varying contract workload allows. The same is true of the other person most involved with the start-up.

The downside to this is that it’s taken significantly longer to get near launching than it would have done if we had been working full-time, multiple years in our case where perhaps we could have done the main development work inside a year. Naturally that can be frustrating.

The upside is that we’ve been able to manage our finances sustainably until we are nearly ready. The nature of what we’re doing means some aspects of our timetable are always going to be partly outside of our control, depending on for example how quickly we can co-ordinate other parties who are contributing or how fast various new technologies evolve and reach a useful level of adoption. Sometimes we just have to wait for things on the critical path, so I doubt we would ever have made it this far if we’d dumped the paying work and relied on some form of limited runway to switch completely.

dbounds• 13 years ago

Side project+

peterarmstrong• 13 years ago

If bootstrapping by consulting counts as "go into prostitution" then that's me I guess!

OldSchool• 13 years ago

I was 20-something, quit my very first engineering job and started consulting here and there while developing a product. I had a pile of credit cards that I used heavily at times but never maxed or missed a payment. Worst case would've been personal bankruptcy but one product led to another over time. Your customers will tell you what they will buy.

The hardest things are avoiding distraction and starting in the first place. Don't be paralyzed trying to find perfection before you're willing start or you never will. Also, don't get drawn into "auditioning" for investors, just blaze your own trail, making sure that whatever you produce is something that people will pay for.

brianmcconnell2• 13 years ago

I think the consulting route is generally a good one. If you establish yourself as an expert in the right area, you can charge good money. Just pick your clients carefully, and you can work part-time consulting, and the rest of the time on your project.

lucisferre• 13 years ago

Hmmm, this is a bit hard for me since more than one of these is true to some degree or another.

niggler16• 13 years ago

You can choose multiple options, although usually one factor is closest to reality

shadykiller• 13 years ago

Looks like a karma bait to me

niggler16• 13 years ago

This was a genuine question

Context (for posterity sake): https://news.ycombinator.com/item?id=5404216 (conversation between myself and pytrin)

In particular, the last three posts:

https://news.ycombinator.com/item?id=5404743

https://news.ycombinator.com/item?id=5404879

https://news.ycombinator.com/item?id=5404996

<niggler> Many if not most entrepreneurs already made their FU money or already had a cash reserve.

<pytrin> It's pretty shocking to me the different worlds we live in. You honestly think that most startups are created by people with FU money?

<niggler> "You honestly think that most startups are created by people with FU money?" Let's put it to a poll: https://news.ycombinator.com/item?id=5404986

I was hoping to get some statistics, but I was surprised by the overwhelming response.

pytrin4• 13 years ago

Yet somehow, FU money is not on the poll. So I don't see how that settles anything. A more interesting poll would have been to ask that question specifically.

tomasien8• 13 years ago

STRONGLY considering going on unemployment to start my next startup. I have about 10k saved, live the simplest life you've ever seen, and live in a city with amazing standard of living. I also have a good job, I'm just fed up not building something, and I want to try to build something amazing.

I've thought a lot about it, and my instinct is to feel guilty. I'm from a middle class family, have a great degree, and have great earning potential. I could get a job any time I wanted, and that's not what unemployment is for. However, trying to build a startup for 3 months that I believe could create hundreds if not thousands of jobs feels like its a good idea. The alternative for me is to start a company that is NOT a startup, one where I'm reasonably (50%) certain we can be profitable, but one that will not and could not scale (a service business).

Any moral advice here?

tomasien8• 13 years ago

Context on me: I started a startup that is well thought of that "failed" to become profitable in time to be sustained (because of unwillingness to change regulations in VA) given our extremely limited funding (<$20k) and all the shit we'd been through (http://tommy.authpad.com/the-one-year-anniversary-of-sleepin...) and so I got a coding job.

I have a lot of domain expertise organizing large people-based systems, built a profitable event planning business in High School, and am technical.

eupharis• 13 years ago

The state of Oregon at least has programs specifically targeted at you. Basically, you get unemployment money while devoting yourself full-time to building your business. You don't have to apply for outside jobs. It's the "Self Employment Assistance Program."

http://www.oregon.gov/EMPLOY/ES/SEEKER/pages/self_employment...

I've heard the guys at Urban Airship in Portland made use of the program. They just raised $25 million in funding this past February.

From a tax perspective, it's a pretty enlightened policy.

ktrgardiner2• 13 years ago

These programs also exist and are active in Delaware, Maine, New Jersey and New York.

batgaijin• 13 years ago

My advice? Don't be stupid. On unemployment you get access to quality services and healthcare.

dinkumthinkum2• 13 years ago

Why can't you work on this start up in your off hours? I don't see unemployment as a good option. It's not very much money. If you really wanted to do that, since you "great earning potential," why don't you save up for a few months and then try it? Although, I think the first option makes more sense in many cases.

tomasien8• 13 years ago

I have saved up. I think I made that clear.

I also am working on it in my "off hours" (after an 8-5 job, supporting other entrepreneurs in my community, and exercising every day how much time is that?) but I don't believe there's much evidence that's how great companies are built. How many great companies were "spare time" companies built by someone who wasn't in college (college is nothing but free time, whatever any student tries to tell you). Great companies are built on talent, process, and RELENTLESS EXECUTION.

I'm not saying unemployment is the right thing, but this is a MORAL not practical decision. Unemployment + my savings would be more than enough for my to relentlessly execute for 6 months to a year, which would be enough time to either validate or show I wasn't going to validate enough to get investment.

nell• 13 years ago

If you can do it on the side, I strongly urge you to take that route. Quit only when you are already seeing traction at your startup and requires your attention. Even at that point, see if you can take a short break at your current workplace.

Take extreme measures only when situation demands it. Do not force yourself into extreme situations especially if you don't have a backup.

It is good to have confidence. But don't let that blindside you.

tomasien8• 13 years ago

I feel like I should be clear here: my lifestyle is extremely simple. With my savings, even $600 a month would cut it for close to 9 months, 6 months without ANY decrease in lifestyle. Upon needing a job, I could get a restaurant job and continue to support my lifestyle or get a job in my field within a month at most.

tomasien8• 13 years ago

Why I don't want to do it on the side I answered in the comment below you, but I don't believe that's how great companies are built. And that's what I want to build.

On the side I've built, and have either launched or (in QuickRamen's case ready to launch):

Quickramen.com Letterlasso.com Traxi.co

Helped with Coffitivity.com (200k users in 3 weeks)

Added to cityswig.com relaunch (my old startup, relaunching this week)

None of which have the potential to be huge or great companies. I want to build something great.

phyalow• 13 years ago

Do it.

pseut2• 13 years ago

(I'm an economist, not an ethicist or a lawyer)

Morally: you've paid into unemployment while you worked and you're cutting short the safety net you'll get if the startup bombs and you have to look for another job later. You're probably internalizing enough of the downside that you can take unemployment with a clear conscience.

tomasien8• 13 years ago

My sister said the same thing actually

sliverstorm• 13 years ago

Would that actually work? I thought for UI, there was some requirement that you be actively pursuing employment in your field.

tomasien8• 13 years ago

That's the dilemma

alaskamiller2• 13 years ago

In California you're not allowed to be starting your own business while on unemployment. They ask you multiple times if you understand such clause from your unemployment handbook. It's a social security seen to get you back to employment as soon as possible instead of being a subsidy to your entrepreneur lifestyle.

That said, I hear all kinds of stories about people on unemployment. Ranging from someone that's managed to be on it for over a year and a half, traveled to Thailand for eight months.

It's a lenient system and you're the one that has to sleep at night so you make the call.

mtrichardson• 13 years ago

Same restrictions on normal unemployment apply in Oregon. The SEAP is unemployment, and requires that you be on regular unemployment first. The differences are that you're specifically allowed to work full time on your company. The company has to be vetted to make sure it's not completely ridiculous, but all profits you make are yours. It's a fantastic lifeline and without it Urban Airship would definitely not exist. It's also a federal program (as well as federally funded), though the states run it - in other words, California could implement it. They just haven't.

flyinRyan3• 13 years ago

> It's a social security seen to get you back to employment as soon as possible instead of being a subsidy to your entrepreneur lifestyle.

Wow, that's infuriating. As if employees are great contributors and making a business isn't... Where do they suppose these jobs come from to begin with?

jpdoctor• 13 years ago

> Ranging from someone that's managed to be on it for over a year and a half

That was possible only during the recent financial meltdown. Benefits in normal times are 6mo (US will likely return to that in the next year.

mountaineer• 13 years ago

> STRONGLY considering going on unemployment to start my next startup

One doesn't just "go on" unemployment usually, right? You have to be laid off usually. Quitting does not usually qualify. But, I guess it depends where you are and the laws there.

dlitwak2• 13 years ago

I technically got laid off from the previous job before I started Mozio, my startup. I qualified for unemployment, but declined it. I graduated debt free from UC berkeley and was born into a well off family and my unemployment was on purpose in the search to make myself much more wealthy, and it didn't seem right to take public money to do that. I understand that te prevailing sentiment on this thread is that entrepreneurs would add more value than an employee and so therefore are entitled to the benefits just as much, but for me it was personal: I looked at myself and my family situation and thought that it would be greedy and bad karma, and not how I wanted to launch my career. I had already been given so many advantages in life that I didn't think it was necessary to be unscrupulous and repurpose a government program like that.

brianr• 13 years ago

First one: dropped out of undergrad, if things had totally failed going back (with financial aid) would've been an option.

Current one: ~1 year personal runway saved.

brianmcconnell2• 13 years ago

This was a long time ago. I funded my first startup doing consulting work writing IVR software for an "audiotex" company (I told my friends I was a phone sex repair man). While it was a colorful client, they were the best consulting customer I ever had. Paid well, and paid on time every time. Also got to travel to interesting locales such as Guyana, Nicaragua, Italy, etc. (And yes the people staffing the phones were not attractive, and more than a few were men).

I guess that counts as prostitution.

krohling• 13 years ago

Sold my car, cashed out my 401K. That was 5 months ago.

anonfunction• 13 years ago

How's it going? I'm selling my car in the next weeks and moving to SF to work at my first startup and I'm really excited. Any advice for a 25 year old hacker going into business?

RudySF• 13 years ago

We (co-founders) all saved up for a few months runway but we also didn't launch the business until we had a committed client which meant we were close to cash flow positive from day 1.

jacoblyles2• 13 years ago

Founding my startup, I took out an extra student loan I didn't need and put it into Apple stock, which gained about 30%. After I ate through that I cashed out my 401K, and then I started taking out cash advances on credit cards. I was very happy when we got funding.

Irresponsible debt - it's the American way!

niggler16• 13 years ago

From the Newsroom (an awesome series on HBO):

> America is filled with Greater Fools.

just_throw_away• 13 years ago

I started web design as freelancer in my country haven't worked in web design industry at all. Every now and then I blew up financially and get bailed out by parents, like some 400$ or so every 6 or 8 months.

I don't know how to build a complete dynamic product at that time. Now things are looking good.

shimms• 13 years ago

You missed one: Sold an asset to realize the capital locked up in it.

For my first startup my wife and I sold our house, the proceeds from which gave us a year's runway.

niggler16• 13 years ago

Year runway + money to pay for rent, I assume :)

I realize it's a bit late in the process, but I'll add "Personal Asset Sale"

treitnauer3• 13 years ago

I moved from Germany to Australia in 2007 where I was able to save some money from my day job. Then moved across the ditch to Wellington, NZ about 6 months later with ~$10k cash in the bank. I started running out of money after 9 months which was exactly the time our little domain registrar iwantmyname could afford a small salary. Most exciting time of my life (in a good way) with moving countries and starting a company!

Felix21• 13 years ago

Your service is very simple and straightforward (i love it) and the customer service is among the best I've seen in the industry.

Great job building something so awesome.

treitnauer3• 13 years ago

Thanks for such kind words!

fmstephe2• 13 years ago

Did you work at the Metservice in Wellington? And run the Erlang user group?

treitnauer3• 13 years ago

That would be my co-founder Lenz :)

evantahler• 13 years ago

A really interesting question!

I was in the "You have enough saved up so that even if things blew up you could last a year or more" bucket myself, and luckily things worked out and we got (small) salaries just before that year was up.

I would be interested to hear folks' stories on transitioning states. How did you make the decision to go from "have money saved" to "living on welfare"? What state was your company in to convince you that you just had to hold on a little longer?

cperciva• 13 years ago

Family can't give you funds but can let you live in basement if the startup blows up and you need to find the next thing

I selected this option, but really it's only the first part which is true: I started Tarsnap as a recent university graduate living in my parents' basement.

I still had some costs, mind you -- food, car, medical (type 1 diabetes is not cheap, and the Canadian health care system doesn't cover drugs) -- and I covered those from a combination of savings (I graduated with money in the bank and no debts, thanks to good scholarships) and consulting; but taking rent out of the equation cut my cost of living by about 70%.

The greatest asset a young entrepreneur can possibly have is tolerant parents.

wilfra2• 13 years ago

"The greatest asset a young entrepreneur can possibly have is tolerant parents."

While this is true, if my own circle of friends is any indication, tolerant parents don't usually produce the kinds of kids who have the kind of drive it takes to become a successful entrepreneur.

The lack of a safety net is a powerful motivator. The presence of one can make you lazy when the going gets tough.

talkingquickly• 13 years ago

My experience on this has been a little different. Within my circle of friends/ acquaintances a lot of the people who have taken big risks, including startups or other personal ventures have been people who have only been able to do it knowing that they have the 'basement' option if it all blows up.

These aren't the particularly wealthy ones, most of whom have followed quite conservative paths, but the ones who were confident they wouldn't get a "well it's your problem, you should have got a real job" response.

Hitchhiker• 13 years ago

Bill Gates ?

krmmalik• 13 years ago

Pretty much what happened to me. I had very tolerant parents when I started out, and yet, had i had the fear of not being able to make rent and so on, it would have made me execute very differently. It can be both an advantage and dis-advantage simultaneously.

flyinRyan3• 13 years ago

>The lack of a safety net is a powerful motivator.

Yea, a powerful motivator to make you stop this craziness and get a "real" job before you starve to death. If you look back at the great insights in history they were usually from people who didn't have to worry about earning a living.

buro92• 13 years ago

I live in London and have no family I can turn to, no friends who could bail me out. I also take care of my girl (she's doing her PhD and has no income whilst she focuses on finishing it... matter of weeks now). We have very little savings (few hundreds, not thousands).

The way I did it was to cut all costs, everything. 2 people living in London on barely £1,000 per month covering everything. We didn't cut to a comfortable level, we cut as if our lives depended on it.

Then we individually reserve 1 day per week to figuring out how to hustle cash to stay alive... this week I've made and sold cycling caps. Last week my girl gave some English lessons to Japanese people (which looks like a recurring source of money so she's doing that next week too).

Our approach has simply been to reduce our living costs so far that the amount falls within a hustle-able amount.

And if it fails... we continue to hustle until I get a job.

Sometimes you just have to go hungry and work hard, and it seems that the early days of a startup are those times. I don't think anyone should fear it though, being brassic isn't the end of the world, it's what enables you to work on what you believe in.

Edit: I should also point out that some of this spirit has gone into the startup. That most of our computers have been given to us for free, that we have possibly the cheapest office space in London, that we get a hell of a lot done with very little cost. Our burn-rate is almost unbelievable given what we have and how we work... actually most people just don't believe it.

lclarkmichalek• 13 years ago

Did you ever consider leaving London? Having just moved here from the Reading area, I'm still impressed how ludicrous some of the prices can be.

alan_cx• 13 years ago

Reading isnt that much better. The whole of the south east is pretty much insanely expensive. Even so, moving is a double edged sword, since London and the South East is where the money is to make. So if you move out, you lessen your chances to make money. Which is exactly why its so expensive to live there.

buro92• 13 years ago

Yes, of course. I even considered the USA and SF in particular (health insurance, immigration and rental costs all deterred me), Chile (distance and isolation from my customers deterred me), elsewhere in the EU (language deterred me, but I did think that Greece would be a very good option at the moment) and finally elsewhere in the UK.

On that last one, a lot of the ability to survive on barely sufficient income is in making it go a long way. The majority of my users are London based and supporting the startup and keeping me personally just the right side of the line when it comes to money related things (they don't give me cash, but they help out in other ways). I've been helped out with feedback, customers, the friends investment round (where friends = very dedicated users who have become friends), coffee, cheese, washing powder (damn that stuff is expensive when you're only spending £40 per week on groceries for two), and then there's more than one dinner that has been cooked in different parts of London.

I knew all along, that if I were not somewhere the costs were dramatically in my favour, or that the opportunity is dramatically the wind in my sails, that I should stay where the support is greatest. And the support in London is extensive, not just from my users but also from a very intense and growing startup ecosystem (one of the computers in use in the office came from the one of the users of the freenode IRC room ##LDNstartups ).

So yes, considered it... weighed options, stayed put.

cj• 13 years ago

Side project+: You have an existing job and are continuing either full time or part time while you start the business

What are some successful companies that got off the ground this way?

shanelja• 13 years ago

One notable one is Facebook, if you count Zuckerberg's education as an existing job.

ksikka• 13 years ago

Khan academy started this way, although they are a non profit.

spicyj• 13 years ago

Only sort of true -- Sal quit his job not long after he decided to spend a substantial amount of time on it.

cdvonstinkpot• 13 years ago

My parents died & left me a 6 figure inheritance. I still feel as though I let them down after my startup failed.

kayoone• 13 years ago

Founded a gaming company, very ambitious goals which in hindsight were highly unrealistic for the team size. Spent loads of savings and family money, got into a startup accelerator program with small funding. 3 Years later the product was released but nowhere near profitable. Had 6 employees, now down to 2 doing consulting in web development and still paying back the debt.

Lesson learned: First time founders, start small.

bcx• 13 years ago

Coming out of graduate school I had made 22K a year and lived pretty comfortably, with savings. I had an NSF grant that paid 30K a year, which allowed me to save even more.

You can support 4 people pretty easily on 3K a month even in Silicon Valley. (As long as you shop at costco, don't eat out, and are willing to have someone sleep in the dining room of your small townhouse ;-)

dacort• 13 years ago

Another "missed" option: Got seed funding to pay the bills until it ran out or the company became profitable/raised another round.

jacoblyles2• 13 years ago

Where's the debt/credit card/student loan option?

meerita• 13 years ago

I will start one. I will do it the way mantaining a job. I do the design and schematics and the code will it's done by other on free time. When we reach the finished product we will launch it, see if it works with a little savings money for marketing and see if goes well to start getting seeding money.

waldr• 13 years ago

Savings, Selling (thing I own) and Freelance kept us alive for a long time until we first raised some money. Lots of occasions where the lights actually went out, but as old friends it was much easier for us to brush it off and keep finding ways to press on.

madaxe3• 13 years ago

You don't have an option for "less than nothing". Long story, but my parents split and left me with their debt and my brother to raise. By the time we started the company I was £200k in the hole, at the age of 22.

Nothing like having a fire up ones' backside to make one work...

HeyLaughingBoy• 13 years ago

Is it really possible in the UK for your parents' debt to become yours? That's insane if it's true.

madaxe3• 13 years ago

Possible, but not how I ended up with my fun - see my reply to sibling!

niggler16• 13 years ago

If its not too much to ask, could you go into more detail? I wasn't aware that type of thing happened in England (guessing based on the pound). In the US at least, no debt is transferred (except for possibly mortgage debt if children opt to keep the home)

madaxe3• 13 years ago

Yeah, as I said, long story. It's true that the debt isn't legally transferrable, but I was left in a situation where I had no choice but to take it on.

Long and the short - kid brother at expensive private boarding school - taking him out wasn't an option, as at the time I was about to go to university, and having a dependent child in my student halls was a non-starter. Therefore, had to keep him at the school - managed to get a bursary (reduction in fees) and amenable credit terms from them, and this little side of things racked up some £60k of debt over the four years I paid for. I also ended up paying for my last two years, as it turned out my parents hadn't, and the school (same school!) kindly decided to sic the bailiffs on me for that, as I was their only traceable contact. In the interests of not having my bro expelled for my delinquency, I stumped up the cash. So far, so good, £80k in the hole.

Some years before this shit all went down, my dad bought a house from my great aunt at a below-market price, which was above the ludicrously below-market price offer they were about to accept from equity-release pirates, so they could continue living there. He dropped this like a hot rock, failed to pay the mortgage, and that entire side of my family came crashing down on me with their ire for not stepping up to the plate to help said elderly great aunt. Sucker here offered to buy the house out from his dad, on the proviso that said aunt would pay a peppercorn rent to help me cover the mortgage, and the ensuing scenario was that I got gouged by my old man to the tune of 3x what he paid for the place not 4 years previously (asshole kicked off a bidding war with a property developer for me, kindly), and the great aunt reneged on her agreement to pay rent, leaving me with a £100k property I didn't want and a nice cash drain in the form of property taxes, maintenance, and all the rest... oh, and a sitting tenant. Who's still there, and still tells her kith and kin that she owns the place. Waiting the old bird out at this point, but at least I've paid off the mortgage these days.

Next up came supporting my mother, who after vanishing for six months resurfaced needing cash in order to not lose her house. Idiot here paid for the remainder of the mortgage on her house, by extending the mortgage on the above house, giving her somewhere to live.

At this point, I'm 18, at university, £200k in the hole, and everything's peachy. Add student debt to that, and by the time I graduated, I had about £250k of debt to my name, not counting all the other shit that my parents dropped which the debt collectors had started chasing me for.

Started the company at 22, while still heavily in debt, but at least making some headway, and "only" about £200k in the hole. Spent another 18 months dodging bailiffs after my parents until I could start going "Statute of limitations" and hanging up on them, and, as of last year, I finally have a net worth > £0.

So, yeah, there's the dismal ditty, which I largely brought upon myself, but, as they say, every cloud has a silver lining, and I got two major positives out of the whole experience:

1) The expectation that everyone is out to screw me, and that everyone will renege on every promise they will ever make to you. This leads to one being rather cautious with client and contract dealings, and has saved our bacon more than a few times.

2) Having nothing to lose is one hell of an incentive to take insane risks, like ditching a well-paying job to move into a office-cum-home squat to start a business.

xlance• 13 years ago

It would be really interesting to see which of these alternatives that has the highest success rate 5 years later.

jorisw• 13 years ago

I am a freelance web developer lucky enough to have a client who keeps hiring me two days a week. I spend the other 3 working on two startups.

ef4• 13 years ago

At least for a technology person, if you're good enough to launch a successful startup you're probably good enough to get a high-paying development job.

A good development job will pay something like twice the median salary in lots of places. Live a median lifestyle and save the other half. Each year you do this buys six months of runway (and more if you can invest wisely in the mean time).

okmichael• 13 years ago

Used my (Dutch) scholarship for it

hatu• 13 years ago

I turned to consulting/contract work to carry myself over the tough times when I just needed some cash in right now.

shiftpgdn• 13 years ago

Where is the option for maxed out my Amex & Discover card getting it off the ground?

niggler16• 13 years ago

When I put this together, I thought of some common situations that I saw amongst my friends (and based on what i've heard others do) but I probably should have explicitly given that option. I would consider this as "nothing".

dlitwak2• 13 years ago

Had an implicit cushion of parents who supported me and eventually lent me 10k. However, also minimized rent by moving into our closet/study for 500 bucks a month (which in sf is unheard of) and now I've moved into the living room and pay 150 a month, have a free parking space in my house and free office space provided by Wilson sonsini. So essentially I can get by on very little and sill lead a fairly comfortable life. I also found odd ways to make money, from 400 dollar an hour usability testing to airbnbing my room during the outside lands festival and sleeping on my roommates floor.

vuzum• 13 years ago

We helped others building their startups first. :-)

And we still do. Except now we have the cash needed to invest in our own as well. And we have learned a lot along the way too.

Bootstrapping is hard. And it isn't for everyone. You need to make a lot of sacrifices, and you might end up loosing years of your life trying. Success is definitely not guaranteed.

designNERD• 13 years ago

Dayjob but they are allowing me to take time off to work on my startup and I received some no-strings attached grant money to fund my time off.

Poll: What was your financial situation when you started your startup?

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