

Ask HN: Should I take the plunge? - junkbond

I am a wannapreneur and have been working (moonlighting) on a start-up idea for last 9 months or so. I work as Director - Business Development for a mobile internet company in my day job. I've been thinking about quitting my job and doing this full-time but, i am not sure if its such a good idea to take the plunge during current economic times.<p>I am stating personal and project related data points and a couple of options. Do you think it might be a good idea to take the plunge?<p>Personal<p>Education - BS (Computer Science) and MBA from top tier school
Experience - Software Engineer (2yrs), Marketing/Sales/BD (3yrs)<p>Product<p>Proven concept applied to a niche segment (I guess 2-3mn and growing)
Using open source - zero product development costs so far.
Demographics - predominently 22 - 30, very affluent male.<p>Traction
Below is some data on the uptake of service:<p>Month	UV	Visits	Pageviews<p>Feb	734	1266	22500<p>Mar	1964	3596	37314<p>Apr	3246	5975	158898<p>May	3948	7949	77877<p>Jun	4922	10134	98626<p>Jul	6438	12806	138758<p>Aug	8536	15407	186394<p>Sep	9414	18256	180612<p>Oct	9308	17436	171421<p>Nov	10188	19239	176359<p>Registrations: 1500<p>Financials
I bought a house recently.<p>Paid - 25%
Savings - 40%
Deficit - 35%<p>I can stretch the savings to pay the mortgage for next 12-18 months. I would need to work for 12-16 months to save 35%.<p>Options<p>Option 1: Work for a year and pay for the house before taking the plunge<p>Option 2: Take the plunge hoping things will work-out in next 12-18 months (while the savings last)<p>What do you suggest?
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CaptainMorgan
You certainly appear to have an abundance of education that should assist you
tremendously...

A born financial conservative, I say go with Option 1 - but note that I have
completely no experience in these types of ventures.

What I can offer is that in this time of economic turmoil, if you happen to be
doing alright - you don't need Warren Buffet to tell you that now is a nice
time to buy as things are on sale, even if we haven't completely hit bottom
yet. Now that only relates to the market and stocks specifically, but apply
that to your idea - startup costs specifically, mustn't they be low too?
Supplies, equipment, all marked and coming down due to businesses going belly-
up. You fancy open source, so that's a cost saver too... heck, you've got an
MBA and you're asking us about plunging, mortgages and finances?

I say keep at your goal in the moonlight, pay off deficits as much as
possible, that way you'll have less to worry about when you do take the
plunge. I'm not really impressed with the numbers showing page views - your
company could go bankrupt for some illegal exposure that you didn't foresee
occurring. What I am concerned about is how much can you afford, and/or how
much can you risk? If you don't have a backup plan, I say you have no plan -
hence the cushion that the 35% would provide.

Best of luck.

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mikeyur
I am going to have to say, go with Option 1. You could take the plunge today,
but personally I'd rather be safe than sorry.

Another option would be to slowly phase out your old job, cut from 40 hours a
week to 35 and spend that extra time working on your new business. I'm not
sure if this is possible in your current situation but if it is it may be an
option worth exploring.

My 2 cents.

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mccon104
how confident/comfortable are you with the idea of working on this company as
your sole source of income? ... really, you need to honestly answer that
question first.

second, do you have a co-founder? though one isn't necessary it doesn't hurt
to have one (or more).

to go with option 2 (which is my knee-jerk recommendation), answering
affirmative to the first is required, for the second it's "strongly
encouraged".

also if you have a spouse, sig-other, or any dependents, it might be nice to
(see: you better) talk this over with them and get their input.

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MaysonL
Something you gave no mention of: what if any revenue is the site generating?
Ads? Paid premium service?

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lionhearted
One thing to consider: Lots of situations can wipe you out in cash (family
member gets ill, you get ill or injured, new child born, etc) BUT if you go
for it now, you'll know if your cashflow is good enough to keep going or if
you have to get a new job. You seem qualified, intelligent, and responsibile:
You should be able to find a job pretty quickly if the entrepreneurial thing
doesn't work out.

Faster you jump in, more likely you are to do it. There's tons of things that
can come up to make jumping into the unknown a very bad idea. But right now,
you can try your hand for 6-10 months and see where your cashflows are and if
your business is growing. If it doesn't work, you've got 8-12 months to find a
new job before you're broke.

Also as an employer, trying your own hand in business is a huge plus on the
resume. Staff that can think strategically/managerially are really cool to
work with. You'll learn a hell of a lot on your own, you've got a long time to
make things work, and then if something changes, you'll know if your biz is
viable to support you and your family.

