Ask HN: When to Start a Business? | Hacker News Reader

Ask HN: When to Start a Business?

33 pointsfunarchist61 comments

I am aware that this is a very comprehensive question. It includes individuals own circumstances, experience, country, and macroeconomic situation. In my life, I have tried to start a business or frequently had the urge to start one. But, retrospectively, when I look at them, I see many reasons why I shouldn't have done it. Moreover, these created a huge amount of opportunity cost. I think I am more inclined to be impatient regarding this topic. My question is more specifically: what are the heuristics I can use to understand that this is the right time for me to start a business that does not create huge opportunity costs and is not an impulse that is the result of my impatience?

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There is a cool study that says that the likelihood of your startup suceeding does not peak until your late 50s.

https://hbr.org/2018/07/research-the-average-age-of-a-succes...

I think the public debate is so skewed towards young founders because it is so centered around extreme outlier founders and companies.

This is interesting! I wish it would address whether the founders in their 50s had spent their 20s-40s continually trying to start companies. I expect more experience in starting something makes you better at doing so. But this would mean that people should _start_ young, so they can eventually succeed

Remember that most startups don't have a "single founder" and the founder who becomes the "face" of the startup if it goes big is not necessary the only contributor to the success.

Older partners may have less time to dedicate to the startup, or have other reasons to hold back.

It may also indicate that a percentage of startup success is attributable to networking effects, which mostly grow with age.

I think the biggest thing to start a successful business is to not start a startup.

I think another huge factor is the network of people you know and the breadth of knowledge you can tap into that way.

Superstar young founders have crowds coming to them to fill those gaps, but less high profile young founders don't have access to that.

I would think that a very astute person starting their first startup in their 40s, but with tons of connections and deep knowledge in the target market, would have an easier time than a generalist that had done ton of startups but with less connection to the target market. But that's a broad heuristic which may have nearly as many exceptions to the rule as data supporting it...

> whether the founders in their 50s had spent their 20s-40s continually trying to start companies.

Apart from some differences in legal paperwork, starting a company and seeking employment are the exact same thing. An employee needs everything else that makes a business: Sales, marketing, capital, viable product, customers, etc. So, unless you think it is the legal paperwork that falters those who are younger, almost assuredly they did. Just like most everyone else.

Lack of capital is what kills most businesses. Statistically, 50-somethings have the greatest access to free capital. Any younger and you're still working on acquiring it. Any older and you have to focus what you have towards supporting retirement. That may explain it more than anything.

That is the information I needed. I am sitting here with my almost finished app, sometimes about to give up after having put so much work into it, thinking I am too old to get this done. I will pull this through, thank you!

You might look into building in the open.

At 20, 50 or 60, one constant is that building something for too long is the opposite of what generally leads to any traction.

Put it out there, post about it on platforms discussing what the app does, ask randoms (but your target audience) to try out the app for feedback, already.

Get out there, it's exhausting for introverts, but the web makes it less daunting than ever. Only Apple stuff and maybe tesla sell all by themselves.

What's the app going btw, does it run?

It is an SVG editor. Here it is:

  https://www.hyvector.com/

I agree, I need to get implement feedback channels and get it out into the open.

My cynical take is that the young founder phenomenon is because the young folk haven't seen enough to know when they are getting screwed over, so the VCs are able to keep more control for less money when working with inexperienced talent.

Counterpoint to starting a business: the founder of Nvidia, who is worth tens of billions, says if he had it to do over again, he wouldn't. Starting and running a business takes a tremendous toll. https://www.forbes.com/sites/julianteicke/2023/10/28/jensen-...

If you insist on proceeding... Validate demand first; once you find something you're sure people want, you know a great deal about these people and enjoy working with them. You're sure you can find lots of them, and you find the core problem you're working on fun and interesting.

My dad told me... "A successful business is when you can do something badly and people will still pay you for it." That's key in a startup because it takes a long time and a lot of money to do most things well, so you need customers who will settle for ok.

Good luck!

> Validate demand first;

Some people just don't want to have a boss/want to solve new problems every day even if it isn't the most "efficient" thing they can do with their time in terms of ROI

Even if that's all you want, you need to be sure someone somewhere will pay you, and that you have some hope of getting them to do so. Otherwise, it's not a business, just a hobby you're hoping will pay your rent.

Being a self-employed contractor is running a business.

Right, and I wouldn't quit my job to be a self-employed contractor without having a contract. That's validating demand.

Beware of wealthy people saying they wouldn't do it again. They are just validating their own lifestory: it was hard, incredibly hard. Implicit in that statement are approximately 8 billion other statements, where they believe they suffered more than than every other individual on Earth who makes less than them.

Exactly, would he really rather be another worker drone, perhaps desperately looking for a job, having been 'let go' by the latest round of owner-class imposed austerity, and perhaps facing looming unpayable rent bills etc?

Since you said heuristics, I'll try to leave out my unquantifiable experiences.

I also think that the question you are asking is maybe best answered by someone with a Sales or Product background... tho I could be convinced otherwise.

-Do you have an idea?

-Can you describe the customer?

-Can you find example customers?

-Can you sell this without a demo or prototype?

-If not, which one do you need?

-Can you self-produce said demo or prototype?

-If not, can you source the talent?

-If not, yer f*cked! jk jk

Im pushing you toward validating your idea and your passion to do it! But, don't fret- here is my experiential advice:

-Form your own LLC, protect yourself.

-Dont skimp or cut corners on legal!

-Dont focus on only single solution at first, try to map your strengths and passions to a problem. That problem to a custom group.

-Goals! Just be real, set some simple quarterly/yearly goals and measure them! Seriously.

I have not personally produced a windfall startup, but I have built/consulted for many, and many founders directly... and I run my own consultancy for 20 years now. It can simply be boiled down to, Passion, Problem, Customer. You lack any 1 of the 3, it wont play out nicely.

I always wanted to own a business.

So I thought I'd get a job at a big corp, see if I can learn how business works, save up some money, and then start a company. That's exactly what I did, but it was a big mistake.

There's no better (other?) way to learn than to do. And you learn about a hundred times more and faster if it's your business versus a job, no matter how high-powered.

I should've started before I even left high school and simply failed many times. All's well that ends well though!

I would be really happy if you elaborated on why you think that was a mistake. I am considering a similar road.

Usually it's because all the stuff you learned "on the job" isn't terribly useful to running a business, because tiny businesses and large companies operate so differently.

This is not the case where the "job" is basically an apprenticeship, such as lawyer or plumber or what-have-you.

Turns out almost all jobs, with the possible exception of commission-only sales, are nothing like owning a business at all.

For one thing, you're only covering a tiny part of the enterprise.

Another issue is you have a performance safety net. Most people coast through life, which is OK, but that's not good enough for running a company.

The most important problem though is that a job has a well-defined path, but in business you can never know what the "right" thing to do is until after you've done it and it either worked or didn't. Having a well-trod path you can follow is a million times easier than starting with nothing and making it all up as you go along.

To quote King George 3 in Hamilton: "it's so much harder when it's all your call."

I think the way to do it is to start a business, inevitably fail, and then just rinse and repeat until you finally figure it out. Easier said than done!

Not the author, but in my experience at big(ish) corps: it will gather lots of people that want a safe job, people that want to do only one thing, or people that want predictability. None of these are bad things, just that they are different from startups.

Also compared to a startup there are a lot of departments so you will probably need to do few things outside your job or even interact with people doing unrelated stuff to your job.

I’ve always felt like this is how I would best succeed, too, but only after the initial spark. I have business ideas, but I haven’t had the one that really feels like it could go somewhere. What was your process of “idea linting” like?

Step 0: see if you can get someone to pay you for the thing you want to sell. It's not so much about what you want to provide, but more about what the market wants to consume.

If you aren't exchanging money for goods or services, you don't have a business, full stop. You might be building a project, or creating something, but that is separate from having a business.

You have to ask yourself, do you care about creating something, or do you just want to be your own boss? If you want to create things, create things and think about capitalizing afterwards (or maybe not at all, depending) when you find that people are asking for something like the thing you created. If you want to be your own boss, just get into white labeling/arbitrage/reselling/etc, there are a lot of side hustle guides out there that will get you profitable a lot faster than trying to start a business with your own original idea.

Do you have any references/links for the side hustle guides you're talking about?

> If you aren't exchanging money for goods or services, you don't have a business, full stop.

You wouldn't have a profitable business without holding a debt over someone (money), but a business can also see the transaction be fulfilled and completed in the moment. If I sell pottery and you sell chickens, and we agree to exchange pottery for chickens, then no debt (money) is involved, but we still have viable businesses.

Do you pay yourself in chickens?

Not only in chickens, but I often get paid in chickens, yes. In fact, I had chicken for lunch. It didn't magically appear. I had to trade something for it.

"Money" here stands in for anything the government would try to tax, which includes bartering.

Basically, where are the customers? If you only have theoretical ones, you don't have a business yet, you have a project or startup.

The substantial number of 'businesses' – probably the vast majority – see some trades of goods and services happen, but never accrue anything that the government would try to tax. Colloquially, they 'lose money'. What do you consider those entities if not businesses?

The very trades of goods and services is the money the government would try to tax (assuming you made a profit) - even the term used "lose money" admits that they're transacting.

So, just a long and roundabout way to say: "If you don't make trades, you don't have a business"? Or, maybe, "If you are not willing to make trades, you don't have a business"? The latter captures entities that are prepared to make trades, but have not yet done so. While the original definition rules out a 'business' that is still waiting on their first sale, I suspect that wasn't the intent.

I'm wrestling with this same question myself. I have never had any idea. For me I've started businesses when the external pressure of having a co-founder dictated that I should. Or, I'd be in a fit of passion-inspired development for a few weeks until it was time to talk to customers. I think the answer varies from person to person. It's hard to say what a good heuristic would be. We all operate with different heuristics.

For instance I now have a family, and starting a business would either take me away from family time, involve nights and weekends work, or involve quitting my day job (of which the bar is now very high).

If you find the answer, let me know!

I actually created a set of heuristics that would increase the likelihood of success for the company. However, I am occasionally frustrated by the amount of time it takes to prepare for these conditions before actually founding the company. Maybe it helps.

1. Maximize the effect of geographic arbitrage. Regarding the macroeconomic, political, and social situations of countries regarding their GDP, GDP per capita, and the number of millionaires and billionaires gives a good idea. There are also chances that highly skilled people are also there. Solution: Immigrate to the country and best city in this manner.

2. Maximize legal flexibility. - Having citizenship in a country is hugely advantageous in terms of safety net, a good passport for global travel, and making business with specific industries.

3. Have a skill set and job that make you the top 5–10 percent of earners. Wait to see where salary increases change marginally. When you start working, climbing to a high-paying job and being in the top 5–10 percent of earners in a population is significantly easier and safer than building a business. However, after some years of year-to-year increases, the salary doesn't move you in lower percentages significantly.

4. Acquisition of enough information regarding operating business. - Having knowledge regarding the meta-information of business like legal, accounting, HR, marketing, logistics, manufacturing, etc.

5. Global Industry Wave Riding a historical wave of technologically induced progress can increase the potential maximum of the point significantly.

6. While having the job first, MVP builds, ships, and sales have been done.

7. Having 200–250k of money to burn. With three founders each putting similar money this is enough money to build a team of 3–4 people and keep the company alive for 12–15 months.

But as I said, these things in my own abilities take years and years, and it is really frustrating. However, I know it is logical or a good plan. I would love any feedback anyone have.

1. When you feel you have enough knowledge and competitive edge to stand out above the current market participants.

2. When the failure of the business will not ruin your life (and, very importantly, your family/dependents lives)

3. When you feel there are enough advantageous circumstances (like first-mover advantage, or you are lucky enough to be part of a skilled group that is like-minded, or you simply are extremely motivated not to work for an employer anymore)

These are just my honest observations, ymmv.

Some people are more risk-averse, so they will want more pre-conditions, some people are okay with just 1 of the above, etc.

I don’t consider myself a typical “entrepreneur” and I don’t think others generally would, either.

The thing is, I have businesses that just made obvious sense. They aren’t in the glorious technology sphere, and I’m not trying to grow them aggressively. They were all formed based on a need I had, usually because having a business that did “X” was cheaper than paying one to do it. Now, collectively they make me very comfortable.

In my experience it’s not about “big” or exciting decisions to create a business, it is about efficiency with money and time.

Having watched decades of companies start and then succeed or die based on uncontrollable situations, the only thing I found is you will only succeed if you truly have a good model or product and a niche.

You can't succeed if you don't have those and if you do you'd just go for it because the impetus is there. Everything else becomes secondary. It's the same as trying to time the stock market.

I am trying to build a sustainable side business that allows me to scratch the itches I need to while getting the bills paid during 9-5.

The only advice I have is if you take this route, you need to be able to put your project aside and prioritize the "keep the lights on" income at times. If you can be at peace with setbacks that are out of control, it will set you up for success in other parts of business starting too.

I'm just going to keep cranking till I get there. Very close. It's a long game but when it comes together I will not be paying anybody else or splitting revenue with any other party. It's worth this in the end.

Having a sustainable day job is also KEY for this, it took me roughly 5yrs through burnout to get here since my last real significant job.

Expectations are the root of all evil. Make the best you can with the situation you are in today. Set yourself up for success tomorrow.

Only you can decide it, but, uh:

1) Are you primarily interested in finding a way to extract revenue from people, or are you primarily interested helping people? If the former, please, don't. We have too many parasitic businesses already.

2) You either help people do what they are already doing better than they could do it previously, or you help people do something they want to do but couldn't do previously. If neither of those apply, please, don't. We have too many solutions in search of an acquisition already.

3) Do you want the tradeoffs? Starting a business sucks. Not starting a business sucks. Decide which problems you're willing to have. If you aren't willing to have these problems, again, please, don't. For your sake.

But, if you do want to help people, you know how you'll help them, and this sucks less for you, then get going already.

Ok I will answer this question with years of failure and almost quitting tech and then earning $4 million profits last year.

You should always start a business. The way these things work, is that you need a unique set of lenses to align in order to make it work. And they are mostly out of your control.

The two biggest ones that you do control are : your interests and the market you are targeting.

You got to take your interests and building something in a growing market over and over again and eventually you will hit something which takes off.

And take off = 100s of new signups everyday. Paying you $99 / month or more. You can go from 0 to $10,000 MRR and then from that another 30 40x in days and months once you find product market fit.

Elsewhere you said, "Piracy is a moral imperative", so I'm presuming it's OK to take whatever you are selling and not pay for it.

The realistic timeline to have a business that generates more income for you that than being a decently paid employee is probably around 5-10 years. So one heuristic could be, do you have the opportunity and patience to wait that long for the results?

For me I started after getting bored at a job and working on an interesting side project at home that I wanted to take to market. I was financially secure at that point and just wanted to go for it.

Whole thing failed miserably but I learned a ton. Well worthwhile use of time to get that hard earned knowledge. Someone I met along the way offered to hire me and I’ve grown much more in my new role than the previous would have allowed.

So I may be biased here but I think trying with a bad idea is better than not trying at all. It ended up feeling like a “you make your own luck” scenario.

My favorite quote:

"A man holding a cat by the tail learns something he can learn in no other way" -Mark Twain

You need to grab that tail and learn things you will not otherwise.

From that it follows that the answer to your question is: As early as possible.

This also means you probably should not make your first experiences the most grandiose ideas. You might actually want to assume failure. Don't assume you know anything about business at all. Jump in. Make mistakes. Learn. If you get lucky, great. If your experience is +/- on standard deviation from the mean, you'll come out of the experience all cut-up and bloody (image: holding cat by tail). And you will also come out with tons of wisdom. That's why you don't bet the farm on your first attempts. You are far more likely to fail. Don't worry. Keep going. Make small bets. Don't risk it all in one hand. Make small bets and learn.

Definitely self-fund. Don't play with someone else's money. I know this is very much counter to the YC/SV culture of funding young teams with and idea and zero business experience. So be it. Around 90% of startups fail. YC does a bit better than that. I think I can say that failure is far more probable than success. So, fail small and fail a bunch of times.

Every try to learn to play a musical instrument? You can't learn without constantly making mistakes. In fact, neuroscience tells us that learning requires making mistakes. Why should business be any different?

Can you start something with a few hundred dollars? If you fail, so be it. You will learn invaluable lessons.

The challenge from The Wolf of Wall Street, "Sell me this pen", is extremely important. You have to understand how to sell. If you don't, and your competition does, you are never going to succeed.

At the end of the day, making a better mousetrap isn't enough. In fact, making the same mousetrap is just fine if you are good at selling. I know a guy who decided to sell US flags. He didn't make anything. He bought them from a manufacturer and focused on selling. He was soon making over three million dollars per year.

Sell me this pen.

My experience has been "any time." There are always pros and cons, things will always arise, time passes. Best time to plant a tree is 20 years ago, next best is now.

Now a specific product or service may be much more impacted by the market it will be in, so that requires forethought.

And a business can be "a job" or it can be an entity one plans to eventually sell, with or without others being part of it (partners, employees, etc.).

Financing has also changed quite a bit, my ventures have been frugal, so that is my experience.

It’s a question of motivation.

If you want to get on the money train or want to be impressive, your insecurity might be motivating you and that’s not a powerful place to create a contribution.

If you want to build a cool product that you want but doesn’t exist, commit and start building now. If you don’t have the skills to build, go learn them.

I did it to protect myself. Worse case they can only take whats in my company. (I build apps, but you never know when you will encounter the next ouch-hot-coffee-in-paper-cup wacko)

Keep in mind, at least in the US a "business" is nothing more than a legal and tax entity. Lotta people talking immediately about "your startup will fail!". A "startup" is only one of many ways to do business, and more and more often I find it a smoke and mirrors way of doing things.

More on the actual logistics in the US: you pay $200 for registering the LLC, must do taxes each year of course, and file a biennial statement (at least for New York State LLCs) confirming if your information has stayed the same or changed.

It's really nothing glamorous.

> the next ouch-hot-coffee-in-paper-cup wacko

Nitpick, but this specific example, despite its place in pop culture, wasn't a case of a lawsuit-happy wacko. McDonalds screwed up, after being warned they were screwing up and failing to correct, and someone got badly hurt.

Noah Kagan says you should do it this weekend: https://www.amazon.com/Million-Dollar-Weekend-Surprisingly-7...

While I have a fair few qualms about such an idea, I think the 'now not how' approach is correct. We don't learn how to swim without getting wet, after all.

As the saying goes, the best time to start is 10 years ago. The second best time is? Now. For me, starting a business is not a specific point in time. I constantly trying out different thing, asking for feedbacks. When I find a solution that solves the pain points for a lot of people, that's when it's time to start a business.

when you think you have a decent hand to play, and when you think you know how to play it and when you have the guts to play

When people are paying you.

People often have it backwards, thinking they'll start a business, THEN get customers. That is often wrong.

> what are the heuristics I can use to understand that this is the right time for me to start a business that does not create huge opportunity costs and is not an impulse that is the result of my impatience?

I'm wondering if it makes sense to think about your goals here. Why are you even thinking about starting a business? Are you trying to make money? To really serve people? Because it's a fun challenge? Because you want financial freedom? Because you see an opportunity? Because you've been told you should or want the status of someone who has "made it"? What's in your heart?

> In my life, I have tried to start a business or frequently had the urge to start one. But, retrospectively, when I look at them, I see many reasons why I shouldn't have done it.

What were the reasons (that you see), why you should not have started those businesses?

In the comment down below, I have written about the heuristics that I created for business starting timing. Some of them are the result of my own experience. - In my attempts, I was in an unsuitable country, in another attempt in a good country but not in a safe legal status (student visa), and I did not have enough business knowledge. -These also created a huge opportunity cost regarding my academic results and hindered my timeline to get a high-paying job that would satisfy other heuristics like an even better country, industry, and seed money.

First search for the midwit meme. Then you will know the answer is "now"

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