
Ask HN: Who is currently broke due to being in a startup? - twidlit
I am broke and in debt due to taking in 1/3 of my previous salary and having big delays to our v 1.0. I am married with 1 kid. My wife is footing some of the bill and I am on my fourth debt renewal. Wondering how people in the same situation are coping or getting by.
======
ezl
I am broke.

Sep 1 will be the 1 year anniversary of my decision to go out on my own. In
the last 10 weeks I have missed rent payments, missed insurance and had it
cancelled, sweated 2 dollar bus rides, not eaten sometimes because I didn't
want to spend money on food.

At times, I have regretted my decision to leave a comfortable life, doubted,
cried, bargained, been depressed and thought things the former me could have
never imagined me thinking.

I've learned a lot, but not enough, and while part of me is deeply worried,
the bright spots are really bright and I am hopeful that I'll emerge stronger.
I've separated some real friends from fake friends, learned where I'm strong
and where I'm weak, realized how amazing my girlfriend is, and grown up a lot.

I'm still depressed and unconvinced I'll be net better off. And this might
sound awful, but part of me is glad when I see that other people have pains
and doubts, because it makes me imagine that I'm not alone in the struggle,
that the lack of immediate success doesn't mean I'm incompetent.

~~~
delano
"It's better to be at the bottom of a ladder you want to climb, than halfway
up one you don't."

~~~
filmschool
Where did you find this quote? Or is it original? Very nice.

~~~
delano
It's from episode 6 in season 1 of the Office (BBC). That was Tim's advice to
Dawn when she was thinking about changing careers. I love that quote.

------
garrettgillas
This post actually makes me feel kind of grateful. I have kept my day job
while working on my startup and am still single. I'm 27 & I work from home.
The upside is that I have a place to live and work comfortably, I'm not broke
and I can support my "startup habit". The downside is that I never get much
sleep, my girlfriend hates it, almost everyone I know says that I should quit
my startup and get married like a normal person, my student debt isn't going
anytime soon, and the stress of that and everything else never seems to
subside much these days.

Overall though, I feel like the chips are up for me right now. I've been in a
spot once or twice in the past where I felt pretty desperate and depressed
like you have mentioned. There's few things worse than professional failure
with conveniently ill-timed personal trials happing simultaneously.

Luckily, this time around I've prepared a little more for the hard times that
might soon come due to professional trials. Also, my past hardships have
helped me prepare better mentally, knowing that I've pulled myself out of
slumps before and that I will do it again when the chips are down.

I guess my point is, keep at it and remember that you're going to make
something amazing. I always tell myself that I'm here to "create epic shit".
It helps restore my ambition and makes me giggle a little. Maybe I'll have to
say it more often if and when I take the startup full-time...

~~~
lionhearted
> The downside is that I never get much sleep, my girlfriend hates it, almost
> everyone I know says that I should quit my startup and get married like a
> normal person

Be careful in your long term thinking with your girlfriend. I've seen a lot of
guys work like crazy while their girlfriend doesn't like it, and the guy
thinks, "Well, if this pays off she'll understand." In my experience - not
true.

People have different temperaments, and if she dislikes risk or wants a more
regular amount of time and affection, that's unlikely to change and money
doesn't fix the problems there. The best couples for entrepreneurship are ones
where both guy and girl are excited by the process of working hard, striving
for the impossible, putting in long hours, and can handle the emotional burden
and strife that comes with that. If your girlfriend doesn't have the
temperament and you do, money likely won't solve that later.

~~~
AmberShah
I hate my husband's workaholic tendencies and I agree and disagree to this
post. On the one hand, no it never does go away even if it pays off. On the
other hand, that's not necessarily a sign that you shouldn't be with her.
There may be other reasons, but wouldn't you rather be with someone who wants
to spend more time with you rather than less? I've seen relationships like the
latter and they were no spring picnic either.

------
patio11
Can I recommend consulting for smoothing out cash flow issues? It has really
helped me this summer -- the time it cost my development schedule has been
worth the peace of mind gained by not having to either smash my piggy bank or
borrow four paychecks worth of cash at consumer interest rates.

~~~
mebassett
how does one get started in consulting?

~~~
3dFlatLander
I've seen this guide to consulting several times on HN.
<http://unixwiz.net/techtips/be-consultant.html>

------
onwardly
I have over $100k in student loan debt from undergrad, and have nearly run
through savings for the startup I'm working on. My loan payments kick back in
in two months.

We're launching in 2-4 weeks, and the nature of the project is such that if it
doesn't take off immediately then it may never take off. Talk about a fire
under your ass!

That said, I'm loving it. I'm actually living in India at the moment, working
from my laptop. Its dirt cheap over here, and during the breaks I take I get
to experience India. And did I mention its cheap? $5/day food, $6/day housing,
$5/day miscellaneous.

~~~
PStamatiou
I am in the same boat (except for living in SF not India). Been doing startups
since I graduated 2 years ago. Near $100k loans from undergrad, needing to pay
off the convertible note from my first startup that didn't convert to equity,
car payment and a few months into working on current startup where I haven't
taken salary yet. Though the best thing I did was cancel my credit card a year
ago.

On the "up" side, I have never had a real, structured, paying job so I have
never made real money. Just some scraps that my blog makes each month. So
being broke and (trying to) live within my means has become natural.

~~~
onwardly
2008 grad too.

I like your second point here. I still live basically like a college student
which makes it easy to live off very little. Heck, you should see some of the
shitholes I've slept in in India to save $5 for the night.

I made great money one summer working as a management consultant, but hated
the work. The perks were great though: first-class international plane
flights, no per diem and lots of extravagant meals, blahblahblah.

None of that stuff means anything though. I'm not an ounce happier for
sleeping in a nice room, or having an extravagant meal. Those things fade away
as soon as they're done.

But I've never been happier working for something that I care about and that's
mine.

------
fleitz
May I ask why you are not cutting features to hit your launch date?

I'm broke and in a startup, been at it 1 month to the day, planning a launch
in early Sept. I actually need to be code complete for the 28th of Aug as I'm
going to Burning Man.

No I don't think it's going to be perfect and there are a lot more features
I'd like to see going to launch but since I don't have a budget for a national
media campaign I doubt it will make a difference and at least I will be
getting feedback.

You're still going to be in debt whether you think about it or not. If you
stopped now would it improve the situation? Probably not. So get ready to
launch, launch it, talk your book, make some cash. You can still build those
features with some paying customers. Stop coding, start cold calling. Thats
what I will be doing come Sept whether it be potential clients for the startup
or potential clients for contract work.

I get by, by not thinking about it. Spend 2 hours thinking about the worst
possible outcome, you blow all your money/credit/etc, and have zero income.
Then think about what you will do. Now you have a plan. Never think about it
again until the day comes that you need to put your plan in action. Then
execute your plan.

~~~
redorb
why are you broke and still going to burning man?

~~~
mattmanser
Some things are more important than money?

Also tickets were on sale from Jan 2010, he could easily have bought them back
then.

------
klahnako
I am in a very similar situation: Mortgage, kids, wife and in an almost
failing startup. First, you need to know how much risk the wife can stomach.
Second, the money does not matter to children; they may be better off if you
have more time to spend with them. Third, always have small contracts on the
side to balance the startup losses. Fourth, it is important that you contract
to other companies, instead of being employed. This will help with the small
contracts, but also allows you to own the copyright you build for the
startups; maybe not directly useful to you, but adds to your personal library
and makes you more productive to your customers.

Good luck!

~~~
themullet
So true with the contracts on the side. A lot of start ups end up taking
years, need something for living/server costs so you can keep following the
dream.

------
lsc
I dono, man. I mean, I'm making between 1/3rd and 1/4th what I'd be making
normally, and I'm feeling pretty good about things because my net worth is
increasing quickly.

I mean, things have been much worse. At its worst, I was personally on the
hook for tens of thousands of dollars of company debit, and making even less
money than I am now. failure is something that I've faced before and that I'll
probably face again. But, the thing is, I've never had any real financial
responsibilities. If failed, really, my creditors would have been the only
people who were hurt. Hell, even now, yeah, I'm living with someone, but she's
another bay area nerd and doesn't need my money.

I personally would feel very different about taking the risks I take if others
were depending on me. Would I do it anyhow? I don't know. but I'd think much
harder about it. (and yeah, this is part of why I've avoided taking on those
responsibilities.)

On the other hand, I do know other very successful entrepreneurs who made
their money while supporting families. But most of those took the lower-risk
'productize your consulting business' route.

------
HouseMan
The good news is that you are at the bottom and things can only get
better...if you're focus is tight, your execution even tighter, and you zero-
out the emotion of not wanting to fail and look at where you are as
dispassionately as you can.

I've had to shut-down two start-up's--the lead developer lost his mind on the
first (1996) and the money ran dry on the other (2003). In each case, I went
and got a job. It sucked working for some numb-nuts with a limp handshake, but
needed the money. And I had two puppies and a girlfriend trying to get out of
college on the first blow-up, which was no fun. Luck of the draw. I'm
launching my third literally this week.

Unlike the previous occasions, I'm better educated. And I'm a lot less
emotional. This is business. I have a standard that stipulates the following--
if v 1.0 is over 1/3 late, you're probably throwing good money after bad, so
time to ask where the execution bottle necks are. At 2/3 late, time to "come
to Jesus" on your start-up and start asking some very tough questions, like
how did this get so borked and how can it be rescued. And at 100% over-run,
don't think about it, just bail because you've screwed something up so bad
that no amount of talk or analysis is going to rescue you. Get a job, build
back up your finances and your marriage, and look for another opportunity.

And reflect on why you are in a start-up. Are you trying to change the world
or have a cool work-place?

Start-up's are not for everyone, and certainly should be pursued carefully by
those married and with financial obligations.

If you're putting your family through hell, you have to ask yourself how long
is reasonable to do that. Ruining the finances of your family, or worst case
getting turfed out of your home, is unacceptable. And when you have kids, it's
no longer about your dreams and desires--it's about providing. You had your
chance, it's gone, so suck it up and get ready to do what our own Fathers did
--work for the Man and hope for the next generation.

I know that sounds harsh. But I've been on the other other side and watching
your home get yanked away is not something your children should ever, ever
experience.

~~~
twidlit
"the lead developer lost his mind" im more interested in that story :)

its just 7 months into building this stuff and its all our first time so i
think its par for the course. Certainly excited to launch soon.

------
d_mcgraw
I took the first job I could get out of college. I am paid, like you, 1/3 of
what I should be making (according to state stats). I have a mortgage, and a
puppy to take care of. I barely squeeze by, but the company would be screwed
if I left. I've tried to get other jobs with no success so far. I'm starting
to feel like I'm stuck not only in my current job, but in New Mexico. Sorry
for the rant, but I feel where you're at twidlit.

~~~
twidlit
Dude, drop the puppy. :)

~~~
d_mcgraw
Man after work every day I need that cute little bastard to play with and hang
out with. He's amazing.

~~~
sabj
Absolutely - puppy is a really great investment. I think great ROI for
happiness and unconditional love.

------
garply
I graduated from college (thankfully without debt) and started righted away.
Developed product / failed for about a year, which left me just as broke as
when I was in college - but I was used to that standard of living, so it
wasn't a huge deal. A little more than a year from that, things are starting
to look up, my quality of life is only improving.

The downside is my fellow students who went straight to jobs after college
lead much cushier lives than I do and sometimes make me envious, but I expect
that to change given a few more years.

------
themullet
Just fixing this problem myself at the moment. Currently living with parents
working on a new version of my main startup. Bartered a work exchange with a
designer for a new design for the site so I can purely work on the code. Last
week picked up a side contact for 5 days every 2 weeks for a minimum of 10
weeks and got another possible contract after they have finish their funding
run.

So will probably be back working full time with contract combo and will just
hire out simple bits of code / skip sleep for my start up

------
keeptrying
The one great thing about having started at startup, is that your actually
good at building things. 95% of the employees I know couldnt say that.

Use this amazing skill that you now have. Get a job in Manhattan, make 200K a
year for a couple of years and then try again.

If your worried that this will make you fat and lazy then theres a way to make
sure this doesnt happen: 1\. Never listen to what your boss says but be
cordial as you would be with someone you met on the street. 2\. Do whatever is
best for the system and for sales of the system. 3\. Say no to office politics
in all its forms.

If you follow the above 3 rules (ie no brown nosing whatsoever) then you'll
see that, even in a corporate environment, the only reason they'll keep you
there is because you know what your doing.

------
mebassett
I'm broke. but I'm a student and am pretty much use to it.

I decided to do a startup (sneffel.com) over the summer instead of finding an
internship, I was hoping it'd be profitable by the end of the summer. I tried
selling to basic users/consumers with no real customer in mind. I really
thought it would work at the time. As you might expect, it didn't happen. Now
it all appears obviously silly. In any case, I'm broke. my rent contract ends
in a few days, and I need roughly 1000gbp for rent and deposit on a new place.
A few friends have been buying me groceries and I've been trying to do
freelance work (scriptlance, elance, odesk), but haven't had much luck there
either!

~~~
retube
I think there's huge opportunity around these academic/teaching collaboration
tools. Your site looks sweet. Why hasn't it worked out?

~~~
mebassett
I don't really know, but here's my guess: I didn't know who I was selling to.
I tried selling directly to random users, which no one bought. But I realized
recently I should be selling to schools and teachers, but have yet to put much
effort into that. It could also be that I build something that no one wants. I
really don't know.

------
bradly
How much more would you be delayed if did contract work 2 days a week? Would
your startup be more at risk of failing if you freelanced those two days a
week, or if you risked surviving without it?

~~~
lsc
Yeah. Contract work sucks. it takes much effort away from your primary goal.
But you know what? I think that contract work is usually less distracting than
debit.

Debit, I think, has a ongoing negative effect... you are committed to paying
$x a month, even after you've spent the original loan on your initial bad
idea. Now you've gotta come up with operating cash for the business, for
yourself, /and/ the cash to make a payment.

I see debit as more of a "you have this one shot... if you fail, bankruptcy"
kind of thing. Which can be okay for some things... but it's not how I work.
See, usually I end up doing the wrong thing first. After that, I have a better
idea of what the right thing is... but if I took out a loan and spent it on
the wrong thing? now I'm stuck with a pretty big debit payment. Only spending
the cash I can get my hands on through the fruits of my own labour puts an
upper bound on how much money I can spend on bad ideas.

Now, for me, I ended up just spending a while contracting and paying off the
debit that way... if I hadn't been an idiot to start with, I'd be a year ahead
now.

------
adrianwaj
Maybe you should just quit for the sake of your family. I am not being
defeatist, or else just work out some milestones that you'll obtain from here
onward. If you don't meet them, then quit.

~~~
twidlit
Quitting is not an option and even ridiculous to me. I dunno if its the
founder optimism at work but I am sure this is gonna play out great after
launch. We are just 6 months into the startup and have yet to release our v1.0
with the iphone / android app. (ETA 2 months). Its tough but not impossible.

~~~
adrianwaj
You've replied to 3 people in this thread. Telling one person to "Dude, drop
the puppy" and me that quitting is ridiculous. Why'd you ask the question
Dude? Are you just interested in publicity, or do you need serious advice or
discussion? Too scared to ask your wife?

Your profile: "<http://____.com> to be notified of our launch in the next
month or so"

I'll pass.

------
sandcore
Started working part-time while launching new startup after previous startup
failed. Gave me peace of mind to have some stable income (and met some cool
people), though the situation was not too dramatic - lowest point was 100E in
bank and some bills to pay. We successfully launched the new startup with less
features than desired and I've been slowly adding features since. Now slowly
transitioning to a combination of being employed by the startup and
consulting.

------
spotted_at
I am. I usually pull about 150 - 175 a year contracting and now I am making 0
because I am working on my startup. Money starts to disappear fast when none
is coming in.

~~~
mgkimsal
Can I assume you meant 150k per year? Obviously money going out with no income
depletes cash on hand. However, it would seem making 150k for a year or so
should buy you a pretty big runway. I'm guessing you have a _lot_ of outgoing
if it feels like it's disappearing 'fast'.

~~~
spotted_at
Yea, 150k. I thought I had enough savings to last about 2 years; I was wrong
so I am seriously cutting back.

If mainly feels like its going fast because I was accustomed spending what I
want and not seeing my bank account drop.

Now that I don't have anything coming in thats not the case. The impact of
what I spend is much more visible now.

~~~
exit
what kind of consulting do you do?

how much of 150k were you saving annually?

~~~
spotted_at
I mostly work for banks and sometimes do military contracts. My last contract
was with northrop grumman in SD and before that BOFA in charlotte. I saved
appox. 36k a year.

~~~
exit
cool. can you be most specific though? did you write software for
banks/"defense" industry, or did you tell them what kind of software to write,
or did you tell them how to wire their networks, etc.

~~~
spotted_at
Most recently I was doing data mining and warehousing for a new reporting
system @ bofa.

Before that at NG I was part of a team developing firmware for gas detectors.

------
navarroc
Starting-up while the head of household is a tough decision. It has to be well
thought out since it's not just you. I took the approach of establishing my
management consulting firm first, then used this income to fund my start-up
and ensure a stream of revenue while in start-up mode. I have others doing
some of the consulting work to keep that business going. Something to consider

------
endlessvoid94
I've been in the bay area living off savings for a few months now. i have a
website that has started to generate money, so I'm on my way out of being poor
(hopefully).

it's incredibly tempting to spend all the revenue on myself. the business
won't grow if i do that, though. it's hard.

~~~
exit
can we see your website?

~~~
endlessvoid94
<http://www.thathigh.com> and <http://www.footprintanalytics.com>

------
krmmalik
I can't say im broke as such. I just moved into an apartment, so i'm able to
just about run the place. I have no dependents currently, so that's probably
what makes it easier.

That said, i have to think very hard about every purchase, because i have zero
disposable income.

------
Reedge
Indeed services is great while working on an app. I am thinking of going into
services using my app. That way we smooth out bugs while making income :-)

------
pramit
To fund my local news sharing website bighow.com, I sell The Success Manual, a
compendium of business and self-help advice.

------
filmschool
Someone should open a startup halfway house. It can be funded by people it
helps who eventually get back on their feet.

------
benologist
I'm not broke, just poor. A bit over a year into my startup, about to launch
the version that'll actually make money.

~~~
twidlit
How sure are you that itll make money? I mean what are you basing that on?

~~~
benologist
I have a lot of users that have known all along it'll cost at some point. That
plus I'm widely acknowledged to be about 1000x better than the alternatives,
and everyone's excited about the final features I'm putting in place.

~~~
twidlit
Looking forward to trying it. in one of our upcoming release at CG then. :)

