Bootstrapping a startup
With Snepo, much like many other startups, we have endless faith in our great ideas. Unfortunately that didn’t mean that we were able to just run out the door at the beginning. Money, that stuff that we’re all interested in making gobs of (while changing the world of course) was also necessary if we were going to turn our idle chit-chat into a real company.
If you find yourself in this position or if you’re getting ready to take that brilliant idea to market you have one or more of the following options available to you:
- Save and save until you have enough money to support yourself and pay rent, utilities, etc… for at least a year
- Borrow from family and/or friends
- Try to lure somebody into investing in you
- Consult while trying to maintain focus
There are benefits and drawbacks for each of these as you may suspect. Let’s examine them in more detail.
Save and Save
Seems like a good idea at first until you realise that in order to save enough money to live and pay rent for a year would require you to already be making at least double what you spend. Clearly going a pure savings route is just not in the cards unless you’re already in more money than you know what to do with. Alternatively you could be independently wealthy from the get-go, it worked for Bill Gates and it could work for you.
Assuming you’re not going that route saving enough money to go without salary for three or four months is still a must. When starting a new business nothing is for certain save for the certainly of going longer than you thought without pay. So if you’re entertaining fantasies of putting money down on a house, think again. You can be a homeowner after you make it big.
Borrow from family and friends
On one hand this can be a spectacular option. The loans are cheap and the repayments are easy. Unfortunately there looming problems that are all too obvious. First, there’s the emotional baggage of carrying debt to a loved one or friend. This can be intimidating depending on your family’s financial status or emotional health. The other factor is that if you do run across hard times the inability to repay loans can wreak far more havoc on your life when you owe Maw and Paw money than when you owe The First National Bank of Renaldo several months salary.
A slightly kinder compromise to the notion of borrowing several months salary from your family and friends is living off of your partner. If you have a supportive spouse and are willing to take your lumps then this is a viable option and probably one of the better ones out there. Unfortunately none of us had that option, my partner being a full time student and both Arse and Ben’s other halves being heavily pregnant when we decided to commit to Snepo. Take it if you can get it, mate.
Lure some poor bastard into investing in you
Ha! What a great idea, somebody gives you and the other founders a year’s salary to make your idea a reality. All they ask is your heart and soul and the ability to immediately replace you with people that actually know how to run a business after you’ve begun to produce meaningful IP.
The truth of it is that it really depends on your product. If you’re selling a service based software solution where there’s a huge advantage to the first mover then you’re best bet is probably the VC dough. On the other hand if you’re selling a software product and you’re not required to make everyone in the world a user right this minute then it pays to spend that VC courtship energy on actually developing your product.
Unfortunately, in many cases the search for funding takes precedent over the business itself. You can end up spending more time on your elevator pitch than on your products. This is my intuition anyway, perhaps after a while I may regret our decision to refrain from chasing venture dollars. Probably not though.
Consulting
Ahhhh consulting, that double edged sword. Consulting can pay the bills ohhh so well. It’s relatively easy work to get these days with the market rebounding a bit, and who can turn down consulting rates? It all comes at a price though. If you’re consulting then you cannot be working on your big ideas full time. This is a lot more serious than it sounds, being a consultancy is great if that’s the business that you’re in but if you’re keen to build a product it has the ability to weigh you down with the siren call of steady income.
It doesn’t have to be all doom and gloom though. If you set a quota of time per week that must be spent developing your product and you stick to it then taking consulting work is about the best way for a startup to stay started. That’s not all, if you choose your clients wisely then you can end up in a good position to develop future markets for your product.
In the case that you have a client and the job you’re doing could benefit from your shit-hot automatic penguin classifier algorithm then be up front with them. Tell them that you’re working on a product that may be useful to them and that in exchange for a reasonable licensing fee you will be willing to use it in their solution. Be clear about the state of it and you could end up killing a few birds with one stone.
What we’re doing
When Arse, Ben, and I left to start up Snepo we were certain that we’d not even see a dip in pay (HA!). We had lined up two different consulting clients that were both vying for our attention. Both of these parties were big enough to provide us with our current salary rate for several months. Well, sure enough- we were along our merry way and the client that we chose to deal with stalled our first payment. Heh, no big deal right? Well, this client kept stalling and we finally ended the relationship before it had really begun. Meanwhile we were busy lining up other potential customers and managed to land enough paying contracts to keep us afloat.
However, those contracts paid Net 30 which is actually pretty speedy for larger corporate clients. That means that we get paid 30 days after we invoice. We deposited money into our business account for the first time about a month and a half after we opened it.
The lesson is to make sure you can absorb the loss of income right away, don’t run out the door to startup a wanky “web 2.0” company, eschew consulting work, and neglect to be able to support yourself. I couldn’t imagine very many things more crushing than having to give up and get a real job being just a few weeks away from being self sustaining.
Leaving on good terms
There are a million things to worry about with a startup. There’s the bazillion dollar idea, there’s funding, rent, the cheapest place to buy ramen. All of these are important to be sure but since most startup founders aren’t starting up on their school holidays (unless they’re MIT graduates residing in Paul Graham’s small intestine*) there’s also the looming concern of leaving your old job.
This is a relatively easy step if you don’t like the place you work or if you’re a sociopath but in the case that you actually work with people that you respect or you have a shred of human decency then you have a lot of strategising to do. When the idea of Snepo first started geminating Arse, Ben and I were working at a small shop that developed touch screen applications for kiosks. It was interesting work, we were located in an inner city warehouse complete with all of the fixins. We had an annoying dog, a ping pong table (upon which Arse and Ben LIVED). We even had a masseuse come into the office to knead our backs into paste on a monthly basis.
Life was pretty good. There was always weird hardware around, I had a lot of small projects going and I was developing things in Ruby (pre Rails). Hell, I even had an Erlang project. I was constantly writing interfaces to hardware devices like credit card printers. For an ex-web jockey this was heaven.
But It was someone else’s business. It may have been a developer’s dream job but it wasn’t going to make my dreams come true. Arse and Ben were in the same boat. However, we worked with a great bunch of people that we didn’t want to leave in the dust on the way out the door. So here it is, the Snepo Guide To Fucking Off Your Old Job Without Burning Bridges or SGTFOYOJWBB (yeah! Airpuncher!)
Document things
You’ve been an invaluable part of the team**. That means that you probably have a mountain of elegant, efficient, even beautiful software that you’ve written or contributed heavily to during your tenure. When you’re gone there’s no fucking WAY that anybody is going to maintain it without good documentation.
Do you want to know what’s even worse? Even if it’s well documented it won’t be maintained unless the documentation is stellar. If your documentation doesn’t read like a fucking Irvine Welsh novel then your successor is going to rewrite everything from scratch. If you can’t convey in an engaging, entertaining way that your code is worth reusing then there are two things that are going to happen:
- Your company will lose a lot of money and time rewriting everything you built
- Everyone will think you are an idiot because the new guy who takes your place will be sure to tell EVERYONE that the “last guy here” couldn’t find his ass with both hands.
If you write the best documentation ever, you are engaging, witty, and you make it easy to see why your code should be reused (assuming it is actuallly good enough to be reused and we are assuming that) there is about a 38% chance that it actually will be.
That’s what happens if someone senior takes your old role.
If they get a junior in to do your job then your documentation will mean the difference between the poor guy flailing about like an epileptic housecat and being able to bugfix or maintain your work.
If it’s that hard to convince someone to stand on your shoulders then why bother? Well, in the worst case you will still end up with a good body of documentation that you can use to put people at ease. When you get that incredulous “I can’t believe you’re leaving us all alone” puppy dog look from your manager you can point to that stack of hawt LaTeX typeset PDFs and say, “Hey buddy, don’t worry it’s all documented”.
There are probably some of you huffing and puffing about how you document your code anyway. I know I do—just until a deadline starts breathing down my throat or until a couple of projects stack up. If I were to look through my “documented” projects right now I’d still garauntee that there are significant holes in the documentation having to do with things like that race condition that surfaced a few months after the project ended or that mysteriously overflowing buffer that caused three people to die in a train wreck in Uzbekistan. Taking the time to review and update the documentation on old projects will make a world of difference to anyone who has to maintain your work after you’ve gone.
Here’s a hint You’ll never be allowed enough time to document everything before you leave. When you give notice you will be told to finish up the project you were working on. Most likely you’ll be told to spend your last few weeks doing mind numbing bugfixes. The key is to start documenting about a week before you actually announce that you’re quitting.
Nutting up
Get your shit together and get out the door. If you and your buddies really do have the talent and the best idea evar then you had better get moving. It takes about 18 months for someone else to commercialise on that cool idea that you had at lunch. If you don’t move on it right away someone else will.
See, if you thought of something awesome then there are roughly 1000 other people around the world that have thought of it and are also capable of building it. At least thirty of those people will make a business out of that idea***. In order to be successful you have to be one of those thirty and you have to be a rockstar with big nuts. Those nuts have to be big enough for you to quit your job and live on ramen noodles for a month or two.
If you are capable and have the money to survive those first few months then the longer you put off quitting the more opportunities you will miss. The more likely you are to be just another one of those wankers that is “gonna start a company one of these days” but never actually will because they’re a bit too comfortable and their balls are just a little too narrow in diameter.
It’s not you, it’s me
Do this because you are a good human. If that’s not motivation enough then remember that it never pays to burn a bridge, these are talented people you work with and you may want to headhunt them one of these days.
Why bother?
Because it’s good practice! I don’t believe in Karma but when you treat people well, they will tell their friends. If you are an asshole they will tell even more of their friends. The world is a very small place and it never pays to piss people off. Even if you hate them, which you probably don’t, it is worth your while to be kind and go out of your way to make their lives more pleasant while you are leaving, even from a completely pragmatic perspective.
More importantly if you really want to start your own business you’re better off starting on the right foot. At Snepo one of our major motivations to start up was to Do Things The Right Way. The very first thing you do when you start a new business is leave the old one and it was very important to us to do it The Right Way. It sets a precedent.
* Just kidding Paul, we love you and want to have your children. Lisp is neato! Star nosed mole rats RULE!
** Of course you’ve been invaluable, you wouldn’t be capable of starting a new company if you were just another wang would you?
*** Those numbers are totally scientific, at Snepo we’re all scienticians.
The importance of fucking off
Why start a business, or why work at a start up? The pay isn’t so good, the offices can be bit cramped (unless you work at Snepo), the prestige isn’t exactly going to get you an interview on The Daily Show. So without motivators like money, fame, and prestige what makes us go?
Accomplishment
This is the king. The beautiful conceit that fuels the fire of so many start ups, that we can create something to change the world. Even if there’s not a noticeable change in the planet, at least there’s the singular feeling of exhilaration that comes from creating something with quality.
The founders, the first employees, the partners—None of us would be anywhere near the fire if it weren’t for the chance to say that we did something. We made something. That’s hot shit. It’s what keeps smart people awake at night, spinning ideas around in their head and hangin’ for the whole sleep thing to be over with so they can get up in the morning and make stuff happen. Those Captain-Of-Industry-Motherfuckers can’t get away from the fact that they’re just junkies for that rush that comes from accomplishing something.
That drive is fantastic but it burns out after a bit. It takes a long time to notice it’s happening, too. It’s all too easy to charge and charge even when the wheels start to spin. Here’s an experiment for you: Take a whole room full of ambitious, motivated people and work ‘em until their wheels start spinning and they aren’t getting anything done. Now wait for the knife fights. We tend to sow the seeds of our own destruction, that’s poetic and all but it’s hardly any way to run a business.
So what to do? We’re motivated by accomplishment but what else? If we are going to stave off the knife fights we have to find some way to catch traction.
Fucking Off
Call it whatever you want, “Team Building”, “Morale Boosting”, “Getting Drunk at The Pub”—It all comes down to understanding and accepting that as human beings our sense of well-being comes from more than one place. At Snepo we make it a point to have at least one Fuck Off day per month. Over the last few months we’ve done things like:
- Ten Pin Bowling (a much bigger novelty here in Australia than it is in the States)
- Hit the pubs at 7:00AM for Arse’s birthday. We made it most of the day and then had a party back at the office.
- Go-Karting. Arse’s father is a gear-head and we rented the track for a day with some super charged go-karts o’ death.
I consider all of those to be official Snepo Business. None of us got involved in this thing to be running on a treadmill until we burn out. A good solid day of tearing things up and screwing around is absolutely essential to keeping that accomplishment drive greased up and ready.
A bit of competition is good for diffusing the knife-fighting urge we talked about earlier as well. I’d much rather race my buddy around a track, lose control, and slam into a tire barricade at 60/kph than argue over the colour of a gradient or what sort of test framework to use. It’s just a bit more humane.
Leisure is Necessary
There’s been a lot made of the 40 hour week maxim. If you work any more than eight hours in a day then you’re probably just adding bugs. Our experience at Snepo has found this to be painfully true. It’s a hard one to stick by but it’s paid off in spades. We’ve decided to take things further though. We have a policy that roughly a quarter of our “work” time should be spent doing what we want.
Seriously. Writing a book, painting, building robots, hacking a new programming language. Something, anything to tap into that hot juicy Accomplishment Vibe and give it a little bit of variety.
What about money? Holy shit! You’ll never be able to pull it off, you couldn’t possibly get anything done that way!
Just watch us. We’ve been in business for about 10 months now and we’re steadily growing. We’ve got one employee, and enough consulting work to keep us busy. We’re watching the sales of our first product grow and it’s delightful. Moreover, we’re wicked productive because we don’t succumb to the Ambition Treadmill and burn ourselves out just for the sake of it.