
Ask YComb: Should I quit to do a startup during a recession? - eventhough
I'm 23-years-old. I've been working at a tech company for 1.5 years. I have an idea for a startup that I want to do but I'm afraid the economy is going south. My mama always tells me the only reason why I don't appreciate my job is because I haven't yet experienced an economic downturn. She tells me I have no idea what it's like when you can't find a job because I was able to get this one right out of college. I have enough money saved up to survive about a year without a job. (I am going to pay for my own health insurance.) What do I do? Hunker down...or take the plunge?
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mixmax
When you grow old you won't regret the things you did, but the things you
didn't.

In my time I have done illegal raves, had sex with a porn model, started a bar
in Ibiza, done drugs, started a crash-and-burn dot-com, and all sorts of other
crazy stuff. But when I talk to my friends now (im in my mid-thirties) they
wish they had not held back, and just gone with their ideas.

So get going, you have nothing to lose... If it fails at least you tried, your
friends will envy you for having the guts to try, and in 10 years you will
have a great story to tell.

~~~
nextmoveone
+1 for sex with a porn model

~~~
mixmax
Interestingly, a lot of people would probably say this is all very
unprofessional, hurting my future chances, bad career planning and what have
you. But my experience has been to the contrary: Because I have met a lot of
different people and done a lot of different things I tend to have a broader
perspective on things. And nobody has ever held anything I have done against
me.

So my point stands: Just do it...

~~~
kirubakaran
"Just do it..."

...with the porn model.

------
iamelgringo
I'm 34 and finishing my degree in CS after being married for 10 years and
having worked as a nurse for the last 15 years. Why was I a nurse? Because my
parents didn't think that there was anything to the whole "computer craze",
and they thought that nursing was a good, solid profession. I almost dropped
out of nursing school to major in CS. And, I spent most of my free time in the
computer lab, hanging out with the geeks. Go figure.

I know that parents get awfully nervous about this sort of stuff. But...
sometimes they just don't understand. Especially when it comes to technology
stuff and the tech biz.

If you have the money, and can give a startup a shot.. go for it. What's the
worst case scenario? The worst thing that can happen is that you'll have
learned a lot about starting your own business, and you will have learned a
lot about new technologies, and your savings will be gone. That's it. That's
the worst.

~~~
boredguy8
Someone lacks imagination: there are far worse things that could happen. Also:
am I the only one that finds it funny that you're leaving one of the more
lucrative careers (nursing) as demand explodes in favor of a more blase job
environment?

~~~
cglee
Being technical and having industry knowledge is a powerful combination. I
don't think the past career in nursing is sunk cost at all...just the
opposite.

~~~
pchristensen
I'd be shocked if iamelgringo didn't have 50 ideas of products/solutions that
would make nursing work easier for nurses, cheaper for hospitals, and
safer/more consistent for patients. The only question is if he has the stomach
to try to sell to the medical industry... (don't know if I would)

~~~
iamelgringo
You're right. I do have about 50+ ideas. I would love to get out of the health
care profession for a while, though. I think the key is in making
Doctor's/nurses lives easier without having to sell to hospitals. Hospital
budgets usually run on a 1-2% profit margin, so IT budgets are usually pretty
thin, and their tolerance to failure is really very thin. We'll see what
happens next year after I'm done with school, though.

------
sonink
I have talked to a couple of friends in a similar dillema. My take on the
whole thing is that there are two kinds of people:

1\. Those trying to find a reason to do a startup.

2\. Those trying to find a reason to not do a starup.

"the choice has already been made, it must merely be understood" ...(from the
Matrix)

------
pg
This came up recently. The answer is that you shouldn't worry about it,
because you can't time the market. If you were really sure the economy was
going to tank at a given time, you could just short a bunch of big stocks and
make money that way. But no one really knows when or whether there will be a
recession or how big it will be. So the best plan is just to ignore the
economy.

<http://news.ycombinator.com/item?id=88410>

~~~
1gor
Actually you _can_ time the market, because:

* it is a dynamical system, not a random one, and theoretically can become predictable in the short term

* economic policy is very politicized and Central Banks do unreasonable things on purpose (like keeping artificially low interest rates).

So, combine the economic imbalances waiting to be resolved (like negative
savings rate etc.) and a market crash that you see taking place right now -
and you can predict start of a recession quite well.

~~~
ivankirigin
> you can predict start of a recession quite well.

If true, you should be a trillionaire.

~~~
dreish
That's not exactly true. I was talking with a trader friend of mine last fall
about the real estate collapse that was just getting underway (finally --
that's an event my coworkers and I had seen coming for at least a couple of
years), and we both agreed without equivocation that there was going to be a
recession this year. Knowing that in advance doesn't automatically give you
knowledge of a profitable series of trades to make. For instance, if we'd both
shorted the S&P 500 on that day, we'd have been crying uncle the very next day
when it shot up 3%, or a couple of weeks later when it peaked even higher.

Also, there's a difference between knowing something and being willing to risk
losing a ton of money if you're wrong.

To support pg's point, unless your product takes a couple of lazy weekends to
slap together, there's really no way of knowing where the economy will be once
you're ready to go live.

And for that matter, weren't a number of successful dot-coms founded in the
middle of the 2001-2002 recession? It seems to me that if you've spotted a
good opportunity, the gyrations of industrial giants shouldn't really matter
much to you. Even if your customers are businesses, your product should offer
better value for less money than something they're already using, recession or
no. A recession will, if anything, make them more receptive to such a product.

~~~
ivankirigin
My point is that "predict" means very little if you can't pinpoint with
greater precision than a year.

I agree with all those saying recession isn't a big concern.

------
pchristensen
Having a job is no guarantee of security during a downturn. With a startup,
you have more control over whether you succeed or fail. If you have one year
of savings, you should be fine either way. But if there is a downturn and it
lasts more than a year, you're SOL. If you take that year to develop something
valuable, you can deal with the macro economy on your own terms. Given your
situation, I don't think the economy should be a big factor in your decision.
Even if you make a product for an ailing sector like real estate, if you can
help them either save money or make more money, you'll do fine.

------
jgrahamc
I started a company (<http://www.electric-cloud.com/>) right after the dotcom
crash. I partly did this because I knew that going out and finding a job would
be hard, partly because I also knew that it was going to take a while to get
the product right, and partly because I really wanted to. Once we got funded
we had job security for a few years, and we could weather the dotcom storm
while creating cool software.

~~~
bayareaguy
I can see where electric cloud could help for some big c++ project like
OpenOffice, but has anyone found it useful for web applications (seeing as
they tend to use dynamic languages)?

~~~
jgrahamc
So if you look just at the build acceleration part of Electric Cloud then you
are correct in thinking that the low hanging fruit is around large projects
that use compiled code. But the definition of 'large' turns out to be
important. You've mentioned a single large project (OpenOffice), but we see a
lot of large projects that actually consist of tens or hundreds of small
variants (the canonical example is a cell phone company that compiles variants
of the the same code for different target hardware). This adds up to a lot of
time (although each individual build may be relatively short).

On the web application side we do have customers because quite a lot of them
are actually writing in languages like C++, C# and Java. Build acceleration is
helpful there. For companies that are doing something like PHP then our build
management tools (Electric Commander) are more appropriate since they are used
to coordinate deployment of a large site.

------
SwellJoe
It will never be easier or safer for you to start a startup. In five years,
you might have a family to support (not necessarily so, but odds aren't
against it), and the decision becomes remarkably harder to make when your own
needs aren't the only ones to think of. That "one year" of savings will last a
month or two if you have kids.

There are many businesses that are recession-proof, and many that can still
pay you a salary during a downturn, though your current job isn't necessarily
in one of those businesses (and your startup might not be in one of those
businesses either). Without a lot of experience, it may not be immediately
obvious to you what businesses will weather the recession well and which will
run into trouble.

Having a job now does not mean you'll have a job in six months if the
recession hits hard. Don't imagine that your job is permanent if things go
badly for your current employer. There are no guarantees in anything. At least
with a startup, assuming you build something people want, you'll have
something people want in your possession rather than just a last paycheck.

That said, I'll tell you what I wish I'd known at 23: Have fun. Do exactly
what you most want to do. If that is starting a company, traveling the world,
starting a band, writing a novel, getting another degree, or some combination
of these things, do it. You will never be in a better position to do exactly
what you want to do.

Your mother worries about you, and thinks about basic needs first. You live in
a time and society in which basic needs are all but automatic: you can work
two days a week at a crap job and make a subsistence living as long as you're
single and live frugally. You can always get a crap job if you need it later.
Since you're college educated and presumably a nerd, you're even better
placed...contract work pays enough to get by on a few days a month.

As mixmax pointed out, the old saying that you won't regret the things you did
but the things you didn't do is probably as true as any truism ever said. When
you're 30 you'll begin to get a sense of this...I suspect that when you're 40
you'll have an absolute certainty of it (I'm not yet to 40, so I don't know
for certain...but I passed 30 a few years ago, and it only seems more true
each day).

------
edw519
"My mama always tells me the only reason why I don't appreciate my job is
because I haven't yet experienced an economic downturn."

That's a good reason, but not the only one.

Maybe you don't appreciate your job because you have a startup inside of you
just bustin' to get out. Not even the greatest job or economy could help with
that.

------
mixmax
When I was 15 I decided to move away from home and get my own life. Since 15
is a pretty young age to be moving out my mama told me that I would never
succeed and that I would come crawling back after a month. That I would ever
make it on my own.

Moving away from home was one of the best decisions I have ever made - I got
to decide when to work, when to play, and when to sleep. And I have never
looked back.

I think that you are in the same position. So take the plunge.

~~~
as
15? Was it a Mark Twain story?

~~~
mixmax
Sorry to be ignorant, but what's a Mark Twain story ?

~~~
kirubakaran
Don't be sorry. You were doing the porn model when these guys were reading
Mark Twain, remember? :-)

<http://news.ycombinator.com/item?id=101755>

~~~
mixmax
:-)

------
tptacek
If you're looking for excuses not to do a startup, you're kidding yourself.
Actually starting one up is going to give you incontrovertable evidence that
you shouldn't be doing it, and there's no way you're going to be able to work
through it. Leave entrepreneurship to the crazy people and get back to your
job.

------
paulsb
If the US (I assume you are from the US) goes into recession, is there the
possibility of you losing your job anyway?

Could the recession work in your favour? Goods will become cheaper, interest
rates will be cut, there will be people to hire because unemployment will
rise, etc. So if you have money saved up, it could actually go further.

Although VC investment may slow down during recession, developing through the
recession will set you up for prime-time when the economy picks up and VC's
want your soul...I mean invest.

------
pmjordan
I'm a fellow hacker, no economist, but I'd say that now is probably a good
time. The state of the economy is going to be irrelevant until you go for the
first big investment, at the very least. That's typically quite a bit of time
down the line, by which time you'll be catching the economy at its best,
during an upswing. If your first big investment is really early on, chances
are you're onto something pretty significant, in which case the economy isn't
going to stop you anyway.

~phil

------
mrtron
This is a really common thought, and I have a lot of friends discussing the
same thing. Basically in simple economic your opportunity costs decrease
during this time.

If you are considering this, save your money and begin reducing your costs. If
a _major_ downturn happens, you can likely live quite cheaply during those
times.

------
antirez
Because during a recession very few people will do startups and when the
economic situation will be better you will be among the few that developed
value that can be turned into money, advantage over competitors, ...

------
colortone
I was in a similar situation and my STRONG advice is to _kill it_ working
nights and weekends on your project before you quit. You need tons of
inertia...3 things you should have before you quit:

1\. some demo/prototypes done 2\. a 15 slide business plan 3\. one other
person that will dedicate him/herself on the level that you are planning.

You will have a newfound appreciation for stability if you do your own company
no matter what the economy looks like.

------
mikesabat
I started to write a comment, but it got too long so I just blogged it.

How to quit your job and build a startup.

[http://shelfmade.wordpress.com/2008/01/22/how-to-quit-
your-j...](http://shelfmade.wordpress.com/2008/01/22/how-to-quit-your-job-to-
build-a-startup/)

------
garbowza
Go with your gut. If you're too scared, it's probably not right for you at
this time. If you can't stand the thought of staying in the corporate world,
then you should pull the trigger and pursue your dreams regardless of anything
else.

------
icky
If you can keep your job and hack on the weekends, you can seed-fund your own
damn self.

Less worry about money will also allow you to work on what you enjoy, without
the constant spectre of "How am I going to monetize this?"

------
cellis
I'd say wait until you're 40, then you'll have 17 years worth saved up.

------
rokhayakebe
history tells us that recession is a time when creativity is at a all time
high and you have a lot less competition. go for it.

------
bayareaguy
You don't sound like you have much to lose, but don't forget that most the
people here have a bias towards starting startups vs keeping a steady
comfortable position. Even if you do have a good idea, I think you should only
really do your own startup if you think you are the type of person who can get
it done without a lot of help or if you have confidence that you'll be able to
get the help you need. You might want to try and find people who can help you
(potential customers, investors, partners, etc) before making a final
decision. If you find yourself having trouble getting people to help you early
on, that should tell you something.

------
marionogueira
Recessions come and go.

If you can find a sustaining revenue source ealy on, by doing something thatXs
truly new and useful, I canXt see a reason why not start a startup even during
a recession.

Actually, if what you sell really benefits users, specially if your users are
other companies, youXll probably find many of them.

Finally, during recessions, thereXs a lot of great talent available on the
market.

ItXs good to remember that most of GoogleXs growth as a company happened
during the "nuclear winter" of the web after the bubbleXs burts in 2000.

~~~
marionogueira
oops... "bubbleXs burts" -> bubbleXs burst.

~~~
icky
Bubble Bert:

<http://img444.imageshack.us/my.php?image=berterniedj2.jpg>

------
ranparas
I don't know how passionate you feel about your startup idea. I would take the
plunge, as if I hunker down, my startup will never take off for sure. As
others are mentioning it would be valuable lesson at worst. Your risk
minimization instincts are making you think about recession and stuff. In my
view, economic environment would only add very marginal risk to the risk that
you would already take by going for your startup. I wouldn't be rash, but I
would take the plunge.

------
patrickg-zill
I think you "probably" should go for it, however, my advice is to at least
attempt to write a business plan, do some financial calculations, etc. Try to
figure out at least some of the hidden costs (time OR money) that will bite
you as you start your company.

Also, one thing that saved my bacon was having an actual customer pay me money
for what I was doing - and give me feedback as a result; some things I thought
were valuable, were not valuable to the customer.

------
DarrenStuart
I blame the press for all this, if noone reported this crap noone would be
selling their shares etc. I have seen some real scare mongering going on in
the press in the uk for weeks.

In short if you have enough money to last you for year then go for it. You
could always freelance for extra money if needed.

~~~
hcho
Are you serious? Hedge funds and investment banks do not really base their
decissions on what press writes.

~~~
DarrenStuart
yes because they cause consumers to stop spending and therefore these
hedgefunds etc go with it. would you invest in a retailer if you were being
told that there was a recession?

------
vitaminj
Do it. Dude, you're 23, have skills, qualifications and are presumably smart.
If things don't pan out, you've got the rest of your life to sort yourself out
(just don't take on too much debt!).

Now if you were nearing retirement, had no money and financial support, that'd
be a different story.

------
menloparkbum
Is your mama 90 years old? What economic downturn did she live through?

------
electric
If it is a compelling business/startup based on a great product then you
should start it. Nevermind the recession.

HP was founded during the great depression. Sun and Adobe were started during
recessions.

------
jamescoops
i would try doing it on the side for a while and then quit when you physically
cant manage doing both any more. You could use your wages to pay for
outsources to help you build a first release e.g. designers, logo etc. In my
view we all waste 50% of our day being unproductive so you might as well get
paid for that bit. Also it takes a long time for a site to start ranking in
search engines etc and getting traffic so that's another reason to build
something slowly first.

------
lurker
Dude, quit your job.

------
kirubakaran
I think you should. If you lose your job because of recession, it makes your
decision making even easier.

------
pius
Read the 4 Hour Workweek by Timothy Ferriss. It will give you some useful
perspective on this.

------
eusman
i don't know you, i don't know your idea but even if i did i would still have
innuficient data to answer such question.

the only thing certain is that the doing a startup is totally different from a
normal job.

you must be ready for a serious commitment.

------
rob
I think it entirely depends on what kind of website / startup you're creating.

------
immad
yes, I think you should.

------
curi
don't be too discouraged by the economy. do you really want to make a major
life decision based on what your parents think they know? and learned before
the internet? at the very least, research the topic yourself.

but also, it's not good to have a boolean choice. you can make it less so, on
both ends. you might be able to reduce your hours at work, in a potentially
temporary manner (they might not like that idea at first, but if they want to
keep your hours up, then obviously they don't want to fire you, so you have
some ability to negotiate. reduced hours, for them, beats none by a large
margin). and you could start on your startup in spare time, to learn more
about

A) will it work B) how long will it take to finish C) how much you like
working on it.

you can also research competitors, look for cofounder now, and other things,
without some permanent "taking the plunge".

~~~
joeguilmette
dont give up on your day job, and dont give up on your startup.

find room for both, and if you find that you are still in love with this
project after a month or two, then you have that much more information (and
money) to go out and finally leave your day job.

