"Quit your job, move to Costa Rica, and do what you love!"
"Stop being a cubicle dweller!"
Entrepreneurship is the new hipster thing. We love the idea of walking into our office one day, cursing off our boss and risking everything in order to pursue our passion on a beach with perfect weather and a cool beverage.
Stop. Just stop.
Here's the reality: Most entrepreneurs fail. Of the ones that succeed, it often takes years to simply break even. You have to work harder than you ever did as an employee, take on way more risk and have way more stress.
Here's the real question: How can you get both the benefits of starting a business and the benefits of a full-time job? In other words, how can you get freedom and potential for a big win while you still have the stability?
Simple. Do both at the same time — at least for a little while. This is exactly how many of the most successful entrepreneurs started their first businesses. A 14-year study of 5,000 American entrepreneurs demonstrates this exact point: Entrepreneurs who kept their day jobs failed 33% less often.
Having a cash cushion gives you time to find the best business model. Being desperate forces you to pursue any model that can pay your bills immediately. It also gives you what I call the Tripod of Stability: If your first idea fails, you can explore more because you can afford to. Without a cushion, if your first idea fails, you might have to throw in the towel. Not being patient can ultimately do more harm than good.
"But Ramit, I don't have the time or energy to work full-time and start a business! "
You don't have to.
To make the transition between your full-time job and your dream business, you just have to be a little creative. Here are five creative approaches that successful entrepreneurs like Daymond John (founder of FUBU), Sara Blakely (founder of Spanx), Jack Dorsey (co-founder of Twitter and Square), Marc Benioff (founder of Salesforce) and others used.
If moonlighting is too hard, consider negotiating with your boss for a more flexible schedule or a schedule with reduced hours. Use the extra hours to develop your idea.
Ryan Hoover joined Playhaven as its first product manager when it was a 10-person startup. After three-and-a-half years, the company had 100 employees and Ryan decided it was time to move on. Rather than jumping ship immediately, he negotiated a six-month transition period where he worked part-time. During that period, he explored several business ideas: one of which was Product Hunt, a platform for product-loving geeks to share and learn about new products.
On December 1, 2016, after three years in business, it was acquired for $20 million.
If you've been at a company for many years and built up the trust, taking a break — with a guaranteed job when you come back — might be a good option. Worst case scenario, you still have the job. With an extended leave of absence, you have enough time to see if your idea is truly feasible.
Before starting Salesforce, Marc Benioff was an executive at Oracle for 13 years. Close to 10 years in, he was feeling burned-out and got approval to go on a six-month sabbatical. During his time off, he traveled the world and thought more deeply than he ever had about opportunities in the enterprise technology world. This extra space gave him the idea for Salesforce.
After returning to work, Benioff shared his business idea with his boss Larry Ellison and got support in the form of advice and an investment worth $2 million. When things turned sour between him and Ellison, Benioff left Oracle to work on Salesforce full-time.
Today, Salesforce is valued at over $58 billion.
If the business you want to start is related to your current company, consider asking your boss to partner or collaborate. Your company can support you with office space, funding, and connections, making your transition to full-time entrepreneurship much smoother.
Jack Dorsey joined a podcasting company, Odeo, as a web designer, but then got obsessed with a product idea: Twitter. He discussed it with a colleague, Noah Glass, and with their boss's blessing (Evan Williams), they assembled a team at work. When Odeo fizzled, Williams bought back its shares and assets (including Twitter) and made Dorsey Twitter's CEO. Then, he continued to fund Twitter for more than a year before the platform took off.
If your full-time job isn't flexible, another option is to quit and replace it with a part-time gig. This way, you can cover your living expenses and work on your business.
Bill Drayton quit his job at the U.S. Environmental Protection Agency (EPA) and worked for McKinsey part time for four years while growing his non-profit organization, Ashoka. Ashoka is now the largest social entrepreneurship network in the world. Yoshiko Shinohara started her staffing company, Temp Holdings while teaching English part-time to fund her venture. In 2016, her company made $4.8 billion in revenue.
Finally, there is moonlighting: balancing a full-time job with a side business. With this approach, you can get started right away without having to negotiate with your boss.
While selling fax machines door-to-door full time, Sara Blakely launched a side business to make hosiery. After moonlighting for two years, she finally quit her job when she knew that Spanx would be successful. And today, it is. Spanx earns over $1 billion in revenue per year.
If you're determined enough, you will find the time. Daymond John, the founder of FUBU and one of Shark Tank's celebrity judges, had a job from 10 am to 10 pm at Red Lobster. Yet he found the time to work on his fashion company between shifts and after working hours until he could afford to make the leap to focusing on FUBU full time.
While working full time as an accountant, Phil Knight started selling Japanese running shoes on the side. This company's name is Nike. You may have heard of it.
We all love the story of the entrepreneur living off ramen noodles, maxing out 10 credit cards and being forced to the brink of bankruptcy only to make millions a few years later.
These stories are heroic. They're great for the media to write about. They're also a terrible strategy for entrepreneurs to copy. You might as well go to Vegas and keep putting all of your money on red.
A reliable income, a plan and patience will not only increase your odds of success, they will give you more flexibility and peace of mind.
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