Hacker News Reader

Comment by tomasien | Hacker News Reader

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?

View on HN

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.

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

What is the program in New York? Regular unemployment requires that you be fired, and unable to find work.

http://www.labor.state.ny.us/ui/claimantinfo/specialprovisio...

It requires, though, that you collect unemployment for some time first

Also keep in mind that the NY max benefit is $405/week.

You could make this money part-time bartending and skip the red tape.

Getting a part time bartending job is really hard where I live. If I could bartend on weekends, I'd make 50% of what I make now and that'd be plenty.

You can find more information at http://www.labor.ny.gov/ui/claimantinfo/specialprovisions.sh...

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.

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.

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.

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.

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.

> 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?

J. K. Rowling said she wrote Harry Potter while on unemployment. The UK system doesn't sound like it's meant to be subsidizing entrepreneurship either, rather it's social welfare.

But Rowling classified her unemployment checks as the best investment the country's ever done given how she's earned billions of taxable income.

Though for every Harry Potter there are millions of not so successful attempts. Others may find it infuriating you're spending their, and obviously yours and your employer's, tax money on hair-brained Kickstarter panhandling ideas.

As I said elsewhere, most of the big discoveries we've had throughout history came from people who didn't have to spend most of their time providing for their survival. Some people, indeed may be infuriated about "their" money being used on ideas they don't believe in. But I consider this a vindictive view (i.e. "I have to work at a job I hate, so everyone else should suffer too!") and not worth spending a lot of time worrying about.

> 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.

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.

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.

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

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.

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.

One suggestion, while you decide on leaving your job: take your "off hours" BEFORE your 8-5 job. You'll be much more productive.

I read that you said you saved up. And I think the "relentless execution" stuff is great. Good stuff. But, you're talking about unemployment, so even though you have saved, if you can make all this money, couldn't you work just a little more save more than you'd get on unemployment. You realize that is not manna from heaven money It "ain't that much" in other words.

I get that it is potentially a "moral" and not a "practical" decision but it could a practical or legal issue if you are committing fraud to get the money, just a thought. But if you think that's the best choice for you; go for it, I guess.

(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.

My sister said the same thing actually

One more thought on this: no one on unemployment is obligated to take the first job they can find. Part of the reason for unemployment insurance is to give people time to find a job that's a good fit. In the broader sense, that's pretty much what you say you'd like to do by trying the startup.

> 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.

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

That's the dilemma

Do it.

Reply on news.ycombinator.com