Taking the Leap
swombat.com
swombat.com
I think it's because I moved from Employee to Contractor, to Consultant/Occasional Contractor before I really got deep into building products that it never seemed like I was in a particularly scary place.
I was already spending several months at a time voluntarily without work, and taking contracts when I needed to. The only real difference was that instead of travelling and rockclimbing full time during those breaks, I was parking it in one spot with the laptop and writing code. And I guess I started referring to those consulting gigs as "bootstrapping".
That might be a good path to look into if you want to make the transition from "guy in a cubicle" to "dot-com thousandaire". There's plenty of room to take it slow.
For example what exactly the move from employee to contractor entailed, or the one from contractor to consultant?
Most contractors tend to try to move from one contract to the next with as little downtime as possible, or work for an agency that sorts it all out for them. For me, the downtime was the big payoff, since contracting pays roughly double what a salaried job does. If you have no attachments, you can spend a fair amount of time slacking off before picking up another contract. I used to push it as far as 9 months off between 3 month contracts and still put plenty into savings.
Repeat the above enough times, and you'll be able to break off work that doesn't require you to be on site, or pick up work from new clients from word of mouth. Some people refer to this as freelancing, but then they don't get to charge as much if they use that term in front of a client. Naturally, it's best to describe yourself as a consultant instead, and double your rate again.
And of course once you've done it a few times, you'll have previous employers bringing you back in for more projects. So at most you might only need to go through that fear stage a few times before you've established yourself.
Does this mean moonlighting and taking side gigs? If so, can it be done without sacrificing personal/family life? Not to mention, possibly living with exhaustion.
Of course, it never hurts to build cool, visible things that you can point to when people ask what you're capable of.
Save up a couple of months salary if you can, make your CV all shiny, and send it out to every job board you can find, with your phone number, email and location at the top. At the same time, send a friendly email and your CV to everyone you've worked with, saying "Hey I'm available for contracts doing X, Y or Z. If you hear about anything, please let me know".
There's no need to quit your job early, you're just going to be leaving like you would for another permanent role.
When someone says they've got a contract for you, sign up for Parasol or a similar umbrella company so paperwork is at a minimum, and away you go!
I'm not hugely experienced at contracting, but since I started doing it a few years ago, another couple of friends have gone down the same route and it's worked out well for them too.
If you're good, learn quickly, and you're honest about what you can do, contracting is a great route for a few years of experience across a range of projects.
After the first couple of contracts, if you're happy with how it's going, then get yourself setup with your own limited company which means you'll end up with more paperwork, but more money in your pocket.
But if you're healthy, 20 - 30 type, and you're seeing the doctor once or twice a year and maybe using prescription meds occasionally for a bacterial infection, then you get the 'high deductible' plan, you end up paying for that stuff yourself but if you happen to be in a wreck or you get cancer or something the insurance will cover it once you get past your deductible.
I am in a similar position. Starting in April, I'm dropping my full-time employment down to 3 days/week to give myself time to start building my business. It's exciting to put things in motion and stop dreaming, hoping, wishing, and other effectively useless activities.
1. Cut personal costs to a minimum.
Skydiving is an expensive sport. You can and will spend thousands just to get the lowest level USPA license. Plan to make cuts so you can plan to jump regularly. Being too cheap or having an irregular jump schedule is not good for you, especially when starting out.
2. Do not take funding.
In a few cases, a drop zone might let you clean bathrooms and pack parachutes in exchange for student jumps. However, taking out loans isn't worth it in the long run.
3. Connect with mentors and peers and listen to them.
Skydivers are full of opinions some of which are well-intentioned. However, the wise student will listen to their skydiving instructor and take advice from non-instructors ( or "peers" in general) with a very big grain of salt. This includes advice from the Internet.
4. Don't tie yourself to one idea.
It's smart to have a plan but you have to make sure you have a plan B or C both in freefall and while flying a parachute. The situation on any given skydive can turn on a dime and you have to be ready to react without panicking.
5. Don't make plans or set deadlines.
The tag line for that is a bit deceiving with respect to what the advice here actually says. You DO want to plan your skydive. The bit about "not looking back" once you commit I can buy. Once you're out of the plane, it's obviously too late to change your mind and go back in.
You said this was controversial so I don't feel at all bad for refuting this. I'll start by agreeing with the idea that making money is a learning experience and entrepreneurs should do whatever it takes to make money...but don't forget these two things:
1) An investment is way more than the money. If you accept an investment round from a reputable investor, you are accepting mentorship--in the form of recruiting help, connections to other companies or industries, not to mention an investment is made to help an entrepreneur to scale so the company can make money at an exponential rate.
2) Some companies do not strive to make money initially--their goal is to create a great product for their users--but for their service to continue, they need money to operate and scale...this is has been especially true in social media, case in point with Pinterest. Pinterest has raised a shit ton of money, but haven't started monetizing to a great extent. If they had just gone for the money from the beginning, whether through ads or what not (and this applies to even Facebook), their service would probably have been far less attractive and usage significantly lower. Many times, monetizing is about timing. Pinterest WILL monetize as Facebook did and Twitter is figuring out, but it has come after a while of being in establishment. Without investment, these companies would again, not be where they are today. That money is absolutely necessary to keep operations going, whether its through labor, scaling, office space, etc.
So your companies may have been revenue-generating from the beginning, and if that's the case then by all means, making money and not taking investments is decently good (still controversial) advice but that advice is not applicable to companies that aren't revenue-generating in the beginning. You can't forget about these companies as they actually tend to be what consumers move towards and is exactly why when companies like these do monetize, they are able to.
1) Yes, but you can get the mentorship without the burden of the investment, which locks you into a specific idea and protects you from learning how to make money.
2) Absolutely correct. If you're just starting out, don't start one of those companies. These are great companies to start after you've built something profitable and learned the basics of running a successful business. Why not start a lottery ticket company (that's how I call them) first? Because they're harder and less likely to succeed. I'm a big fan of setting yourself up to succeed. :-)
2) I don't think that is good advice. Zuckerberg had built things previous to Facebook but never anything that made money. I am not as familiar with Twitter and Pinterest's founders but I don't believe they had money-making businesses before. If a service is good and attracts people, why not build it??
2) That's a lottery ticket, not a plan. 99.9% of the facebook-alikes failed so miserably you didn't even hear about them. That's roundabout your chances if you go that way. I wouldn't quite my job for a 0.1% chance of making it.
Has Daniel written a post-mortem about them somewhere?
http://inter-sections.net/2008/05/07/13-tips-for-creating-a-...
http://danieltenner.com/post/32887444139/0005-starting-up-wi...
http://swombat.com/2011/3/14/fit-your-product-to-the-right-m...
Both ended in a somewhat messy way (in fact, Woobius is still not quite ended) so I didn't feel like there was a clear point to draw a line and write a post-mortem.
I'm sitting in my comfortable chair so I don't know what the other side of the field feels like but I am curious about the advice regarding not setting plans or deadlines. This might be a personal thing but I always found myself more focused and more likely to do something if I have a plan and/or deadline.
Does your advice specifically mean don't go back to the corporate world by X months or does it extend to all aspects of trying to find that right idea?
So, do make plans about what you'll achieve, but don't make plans to "achieve it in X months or go back to the corporate world".
Food for thought: I also took money for my first ($10s of millions), and while I did OK I'm no philanthropist. (Odds are high that the bits you are reading traveled through equipment that my company built.)
It might be: Because of taking money the first time that we appreciate the ability of dialing back the burn to zero and building from scratch. Investors are rarely worth it.
REALLY?
And if whoever in the government is handling that really wants to be evil, he can give your debt to third degree cousins.
Of course, those third degree cousins can sue back to not get the debt, and there is a fair chance for they to win and avoid it... But if the government is hell bent enough in taking your money (usually happens when you debt is taxes debt) it can try that.
Brazil has two types of heirs, mandatory, and others. You cannot give more than 50% of your inheritance to others in your will, the point of that law is to now allow someone to give money to a distant cousin instead of wife, kids or parents. The issue is that this law summed with the debt inheritance, means that distant cousins are potential (But not mandatory) heirs of your debt, and evil enough government lawyers can make it happen...
My guess is that this was setup because Brazillians had the habit to go in debt sprees when they knew they would die (for example, guy know he has cancer, then he buys a yatch and enjoys himself until he dies, this law is to prevent that, but the side effects are terrible).
The average wage here is 500 USD/mo
The best wage I found for a programmer is around 2000 USD/mo (unless you work with SAP, then you can get 7k/mo but I don't work with SAP)
There are no way that I would cover my debts with a normal job unless I got really lucky and someone decided to make me CTO of a medium company or something like that
Average for a developer is around 1000-1200 EUR/month. If you are good and have a good track record 1500-2000 EUR. It isn't much after taxes, but compared to 500 USD/month should allow you to pay for your living expenses if you are frugal and make a dent on your debt.