

Taking the Leap - barredo
http://swombat.com/2013/3/15/taking-the-leap

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jasonkester
I don't remember ever taking a Leap.

I think it's because I moved from Employee to Contractor, to
Consultant/Occasional Contractor before I really got deep into building
products that it never seemed like I was in a particularly scary place.

I was already spending several months at a time voluntarily without work, and
taking contracts when I needed to. The only real difference was that instead
of travelling and rockclimbing full time during those breaks, I was parking it
in one spot with the laptop and writing code. And I guess I started referring
to those consulting gigs as "bootstrapping".

That might be a good path to look into if you want to make the transition from
"guy in a cubicle" to "dot-com thousandaire". There's plenty of room to take
it slow.

~~~
vtanase
I am really curious, can you go into a bit more detail as to what each those
transitions meant for you, and how you went about doing them?

For example what exactly the move from employee to contractor entailed, or the
one from contractor to consultant?

~~~
jasonkester
Moving to contract work is pretty straightforward. It's essentially just
finding a new job. Lots of places prefer to hire contractors for individual
projects, so it's not too tough to pick up a 3/6/9 month contract someplace.

Most contractors tend to try to move from one contract to the next with as
little downtime as possible, or work for an agency that sorts it all out for
them. For me, the downtime was the big payoff, since contracting pays roughly
double what a salaried job does. If you have no attachments, you can spend a
fair amount of time slacking off before picking up another contract. I used to
push it as far as 9 months off between 3 month contracts and still put plenty
into savings.

Repeat the above enough times, and you'll be able to break off work that
doesn't require you to be on site, or pick up work from new clients from word
of mouth. Some people refer to this as freelancing, but then they don't get to
charge as much if they use that term in front of a client. Naturally, it's
best to describe yourself as a consultant instead, and double your rate again.

~~~
tixocloud
The transition from full-time to contracting is what terrifies me. Having to
constantly look for a new job every few months just worries me. Of course,
it's probably because I am the sole breadwinner for my family but how do you
overcome that sort of paralyzing fear? I've had thoughts that maybe I will do
it later on down the road when everything is more settled but I don't know if
things will ever be "settled".

~~~
jasonkester
It definitely helps to establish a reputation for yourself before you take off
and start contracting. You should be at the point where you know without a
doubt that you could send out a few emails (or respond to one of the standing
offers in your inbox) and pick up another gig. As such, "paralyzing fear"
never came into the equation for me or any of the successful contractors I
know.

And of course once you've done it a few times, you'll have previous employers
bringing you back in for more projects. So at most you might only need to go
through that fear stage a few times before you've established yourself.

~~~
felideon
> _"It definitely helps to establish a reputation for yourself before you take
> off and start contracting."_

Does this mean moonlighting and taking side gigs? If so, can it be done
without sacrificing personal/family life? Not to mention, possibly living with
exhaustion.

~~~
jasonkester
No. Just work for a few different companies and demonstrate that you're the
best guy on the team to the people who matter. Eventually you'll get a call
from a guy who's putting together a team and got your name from one of your
old managers as somebody who's good at that sort of thing.

Of course, it never hurts to build cool, visible things that you can point to
when people ask what you're capable of.

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jennyjitters
Thanks for the post! It couldn't have come at a better time for me. I'm
actually in the process of quitting my "real" job (next Friday is my last
day). I'm completely terrified but so thrilled to do something that's
exciting, scary, and where I will undoubtedly learn a ton.

~~~
mfenniak
Congrats! I wish you good luck and prosperity. :-)

I am in a similar position. Starting in April, I'm dropping my full-time
employment down to 3 days/week to give myself time to start building my
business. It's exciting to put things in motion and stop dreaming, hoping,
wishing, and other effectively useless activities.

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aashaykumar92
"Do not take funding...For most new entrepreneurs, investment is a cushion
that delays their learning. If you're thinking of raising investment to cover
your personal costs, don't - instead, learn to make money. It's really not
that hard."

You said this was controversial so I don't feel at all bad for refuting this.
I'll start by agreeing with the idea that making money is a learning
experience and entrepreneurs should do whatever it takes to make money...but
don't forget these two things:

1) An investment is way more than the money. If you accept an investment round
from a reputable investor, you are accepting mentorship--in the form of
recruiting help, connections to other companies or industries, not to mention
an investment is made to help an entrepreneur to scale so the company can make
money at an exponential rate.

2) Some companies do not strive to make money initially--their goal is to
create a great product for their users--but for their service to continue,
they need money to operate and scale...this is has been especially true in
social media, case in point with Pinterest. Pinterest has raised a shit ton of
money, but haven't started monetizing to a great extent. If they had just gone
for the money from the beginning, whether through ads or what not (and this
applies to even Facebook), their service would probably have been far less
attractive and usage significantly lower. Many times, monetizing is about
timing. Pinterest WILL monetize as Facebook did and Twitter is figuring out,
but it has come after a while of being in establishment. Without investment,
these companies would again, not be where they are today. That money is
absolutely necessary to keep operations going, whether its through labor,
scaling, office space, etc.

So your companies may have been revenue-generating from the beginning, and if
that's the case then by all means, making money and not taking investments is
decently good (still controversial) advice but that advice is not applicable
to companies that aren't revenue-generating in the beginning. You can't forget
about these companies as they actually tend to be what consumers move towards
and is exactly why when companies like these do monetize, they are able to.

~~~
swombat
Counter-counter point:

1) Yes, but you can get the mentorship without the burden of the investment,
which locks you into a specific idea and protects you from learning how to
make money.

2) Absolutely correct. If you're just starting out, don't start one of those
companies. These are great companies to start _after_ you've built something
profitable and learned the basics of running a successful business. Why not
start a lottery ticket company (that's how I call them) first? Because they're
harder and less likely to succeed. I'm a big fan of setting yourself up to
succeed. :-)

~~~
aashaykumar92
1) What if your company is indeed growing but not scaling at the rate that it
needs? An investment would boost that ability correct? An owner would be able
to hire more employees, perhaps buy more necessary technology, etc.

2) I don't think that is good advice. Zuckerberg had built things previous to
Facebook but never anything that made money. I am not as familiar with Twitter
and Pinterest's founders but I don't believe they had money-making businesses
before. If a service is good and attracts people, why not build it??

~~~
swombat
1) Then you're not in the "early founder who just jumped out of the corporate
world" ship anymore. Congrats. You're now the owner of a successful business
looking to scale.

2) That's a lottery ticket, not a plan. 99.9% of the facebook-alikes failed so
miserably you didn't even hear about them. That's roundabout your chances if
you go that way. I wouldn't quite my job for a 0.1% chance of making it.

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pcote
Interesting skydiving analogy. The overall advice maps pretty closely to
general guidelines for going into the literal sport.

1\. Cut personal costs to a minimum.

Skydiving is an expensive sport. You can and will spend thousands just to get
the lowest level USPA license. Plan to make cuts so you can plan to jump
regularly. Being too cheap or having an irregular jump schedule is not good
for you, especially when starting out.

2\. Do not take funding.

In a few cases, a drop zone might let you clean bathrooms and pack parachutes
in exchange for student jumps. However, taking out loans isn't worth it in the
long run.

3\. Connect with mentors and peers and listen to them.

Skydivers are full of opinions some of which are well-intentioned. However,
the wise student will listen to their skydiving instructor and take advice
from non-instructors ( or "peers" in general) with a very big grain of salt.
This includes advice from the Internet.

4\. Don't tie yourself to one idea.

It's smart to have a plan but you have to make sure you have a plan B or C
both in freefall and while flying a parachute. The situation on any given
skydive can turn on a dime and you have to be ready to react without
panicking.

5\. Don't make plans or set deadlines.

The tag line for that is a bit deceiving with respect to what the advice here
actually says. You DO want to plan your skydive. The bit about "not looking
back" once you commit I can buy. Once you're out of the plane, it's obviously
too late to change your mind and go back in.

------
Jabbles
"The mistakes that killed or maimed Vocalix and Woobius, my previous two
startups, were not very original. They were awfully predictable."

Has Daniel written a post-mortem about them somewhere?

~~~
swombat
There were so many things that killed Vocalix that that's kind of smeared
across multiple blog posts, like:

[http://inter-sections.net/2008/05/07/13-tips-for-
creating-a-...](http://inter-sections.net/2008/05/07/13-tips-for-creating-a-
successful-new-online-product)

[http://danieltenner.com/post/32887444139/0005-starting-up-
wi...](http://danieltenner.com/post/32887444139/0005-starting-up-with-a-
friend-html)

[http://swombat.com/2011/3/14/fit-your-product-to-the-
right-m...](http://swombat.com/2011/3/14/fit-your-product-to-the-right-market)

Both ended in a somewhat messy way (in fact, Woobius is still not quite ended)
so I didn't feel like there was a clear point to draw a line and write a post-
mortem.

~~~
tixocloud
Thanks for writing the article and for sharing what went wrong. I really love
your advice for not taking funding and connecting with mentors and peers.

I'm sitting in my comfortable chair so I don't know what the other side of the
field feels like but I am curious about the advice regarding not setting plans
or deadlines. This might be a personal thing but I always found myself more
focused and more likely to do something if I have a plan and/or deadline.

Does your advice specifically mean don't go back to the corporate world by X
months or does it extend to all aspects of trying to find that right idea?

~~~
swombat
The advice there is specifically about not setting a plan that "if it's not
successful in 6 months, I'll go back to this other job in a corporation" -
because I can practically guarantee you the deadline will pass without the
desired success and it will just make you feel bad, or worse, you might have
made a public commitment and then maybe you'll actually go through with it.

So, do make plans about what you'll achieve, but don't make plans to "achieve
it in X months or go back to the corporate world".

~~~
tixocloud
I can see the relevance in that. Thanks!

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jpdoctor
Great post Daniel.

Food for thought: I also took money for my first ($10s of millions), and while
I did OK I'm no philanthropist. (Odds are high that the bits you are reading
traveled through equipment that my company built.)

It might be: Because of taking money the first time that we appreciate the
ability of dialing back the burn to zero and building from scratch. Investors
are rarely worth it.

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xspectre
This was a great write up - thanks! Taking the leap is especially scary,
particularly when I've got a mortgage and so many bills. I hope to make it one
day.

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speeder
For me it is a crazy leap, I have huge student debts, some other random debts,
normal corporate jobs don't pay enough to cover the debts, and finally, there
are no bankruptcy for individuals in Brazil, you stay forever in debt, and
when you die relatives inherit your debt.

~~~
swombat
That sounds pretty terrible... is there a way for you to escape from this
crazy country to one where you can declare bankruptcy? It sounds like you're
basically in indenture servitude at the moment.

~~~
SatvikBeri
Even in the US, declaring bankruptcy won't get rid of student loans.

~~~
sp332
That was because a lot of students were abusing the older bankruptcy law to
get rid of their student debt immediately upon graduating.

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chrismorgan
It'd be nice if the title were changed from "Taking the Leap" to "Taking the
leap"; as well as being the true title of the article, it would remove any
potential confusion with the Leap Motion devices. (I know I was initially
uncertain which it would be talking about, though I considered the correct one
more probable.)

