During my few years as a sound reinforcement engineer I worked with lots of local acts, as they would open for the established headliners like Aerosmith or ZZ Top. (One of those opening acts was Jay Leno, believe it or not!) These musicians virtually all had day jobs, as playing music didn’t pay the bills. But the goal was to quit your day job and live off playing live and your record royalties. Aside from Jay Leno, Billy Squier was another local (Jay was from Andover MA, Billy from Wellesley) who made it big.
So what does this have to do with startups? Well first of all, bands are all startups and they are all teams, though Billy and Andy Paley dominated the band the Sidewinders, who I worked with several times. The conventional wisdom is that founders need to quit their days jobs. Well let’s look at the pros and cons of doing just that.
Paul Graham, co-founder of Y-Combinator, maintains you can only have one job, your startup venture. “The number one thing not to do is other things,” Graham has advised entrepreneurs. “Don’t go to graduate school, and don’t start other projects. Distraction is fatal to startups.” So one pro is the ability to focus 100% on your venture.
There’s no doubt investors will have issues putting money into a company that’s run by a part time founder. After all, if the founder isn’t all in, why should the investor be?
And how are you going to recruit for your team? Will everyone have a day job? That’s a tough company to manage!
But the Inc. article Richard Branson: You Don’t Have to Quit Your Job to Start a Business. I Didn’t, sub-titled Can’t go all in on your dream? That’s probably a good thing, according to the Virgin founder (and science) makes several good arguments for working two jobs, your day job to pay the bills and your night job, your startup that runs on sweat equity.
“Some of the world’s most successful companies began as side projects, with their founders working evenings or weekends to turn their ideas into realities. Virgin is a prime example of this — all of our Virgin businesses started while we were working on something else,” Branson reports. “Virgin Records was originally a side project as part of Student magazine,” while Virgin Atlantic started “as a side project while we were running Virgin Records.”
Keeping your day job gives you some breathing room and removes the anxiety of giving up what is probably your only source of income. You can get the details from the post on Branson’s blog: Embrace the side hustle.
But aside from Branson’s advice there’s actually been a study done comparing those who have a side hustle with all-in entrepreneurs that found that those started as a side hustle were actually 33% more likely to survive! A full 20 percent of CEOs on Inc. magazine’s 500 fastest-growing private companies list indicated that they continued to work a paying job long after founding their organization.
Frankly I’ve subscribed to the “go big or go home” conventional wisdom with my many startups and as a mentor. I’ve believed that focus, along with perseverance, were the key ingredients to survival for a startup. But based on this and related articles I’m going to have to rethink going along with the conventional wisdom.
As Branson points out, “if you have an idea for a business that is keeping you up at night, it would be such a shame to waste it.”
The biggest success I can think of where a founder kept his day job was Apple. Steve Jobs quit his job at Atari but it took him months of his high pressure salesmanship to get Steve Wozniak to quit his day job at Hewlett-Packard.
So perhaps you shouldn’t be afraid to be a founder who isn’t all in. My advice would be to set some triggers or milestones that would cause any founder to quit their day job. Typical triggers would be getting a first paying customer, getting some funding from friends and family, or forging a valuable partner for sales or distribution.