Ask HN: Should I take the plunge? | Hacker News Reader

Ask HN: Should I take the plunge?

2 pointsjunkbond5 comments

I am a wannapreneur and have been working (moonlighting) on a start-up idea for last 9 months or so. I work as Director - Business Development for a mobile internet company in my day job. I've been thinking about quitting my job and doing this full-time but, i am not sure if its such a good idea to take the plunge during current economic times.

I am stating personal and project related data points and a couple of options. Do you think it might be a good idea to take the plunge?

Personal

Education - BS (Computer Science) and MBA from top tier school Experience - Software Engineer (2yrs), Marketing/Sales/BD (3yrs)

Product

Proven concept applied to a niche segment (I guess 2-3mn and growing) Using open source - zero product development costs so far. Demographics - predominently 22 - 30, very affluent male.

Traction Below is some data on the uptake of service:

Month UV Visits Pageviews

Feb 734 1266 22500

Mar 1964 3596 37314

Apr 3246 5975 158898

May 3948 7949 77877

Jun 4922 10134 98626

Jul 6438 12806 138758

Aug 8536 15407 186394

Sep 9414 18256 180612

Oct 9308 17436 171421

Nov 10188 19239 176359

Registrations: 1500

Financials I bought a house recently.

Paid - 25% Savings - 40% Deficit - 35%

I can stretch the savings to pay the mortgage for next 12-18 months. I would need to work for 12-16 months to save 35%.

Options

Option 1: Work for a year and pay for the house before taking the plunge

Option 2: Take the plunge hoping things will work-out in next 12-18 months (while the savings last)

What do you suggest?

You certainly appear to have an abundance of education that should assist you tremendously...

A born financial conservative, I say go with Option 1 - but note that I have completely no experience in these types of ventures.

What I can offer is that in this time of economic turmoil, if you happen to be doing alright - you don't need Warren Buffet to tell you that now is a nice time to buy as things are on sale, even if we haven't completely hit bottom yet. Now that only relates to the market and stocks specifically, but apply that to your idea - startup costs specifically, mustn't they be low too? Supplies, equipment, all marked and coming down due to businesses going belly-up. You fancy open source, so that's a cost saver too... heck, you've got an MBA and you're asking us about plunging, mortgages and finances?

I say keep at your goal in the moonlight, pay off deficits as much as possible, that way you'll have less to worry about when you do take the plunge. I'm not really impressed with the numbers showing page views - your company could go bankrupt for some illegal exposure that you didn't foresee occurring. What I am concerned about is how much can you afford, and/or how much can you risk? If you don't have a backup plan, I say you have no plan - hence the cushion that the 35% would provide.

Best of luck.

I am going to have to say, go with Option 1. You could take the plunge today, but personally I'd rather be safe than sorry.

Another option would be to slowly phase out your old job, cut from 40 hours a week to 35 and spend that extra time working on your new business. I'm not sure if this is possible in your current situation but if it is it may be an option worth exploring.

My 2 cents.

how confident/comfortable are you with the idea of working on this company as your sole source of income? ... really, you need to honestly answer that question first.

second, do you have a co-founder? though one isn't necessary it doesn't hurt to have one (or more).

to go with option 2 (which is my knee-jerk recommendation), answering affirmative to the first is required, for the second it's "strongly encouraged".

also if you have a spouse, sig-other, or any dependents, it might be nice to (see: you better) talk this over with them and get their input.

Something you gave no mention of: what if any revenue is the site generating? Ads? Paid premium service?

One thing to consider: Lots of situations can wipe you out in cash (family member gets ill, you get ill or injured, new child born, etc) BUT if you go for it now, you'll know if your cashflow is good enough to keep going or if you have to get a new job. You seem qualified, intelligent, and responsibile: You should be able to find a job pretty quickly if the entrepreneurial thing doesn't work out.

Faster you jump in, more likely you are to do it. There's tons of things that can come up to make jumping into the unknown a very bad idea. But right now, you can try your hand for 6-10 months and see where your cashflows are and if your business is growing. If it doesn't work, you've got 8-12 months to find a new job before you're broke.

Also as an employer, trying your own hand in business is a huge plus on the resume. Staff that can think strategically/managerially are really cool to work with. You'll learn a hell of a lot on your own, you've got a long time to make things work, and then if something changes, you'll know if your biz is viable to support you and your family.

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