Declare Independence From Your Job: Tips on Becoming Your Own Boss
It's easy to think about declaring independence from your job -- especially during what is, for many of us, a four-day weekend. But going into business for yourself is a daunting proposition. In a tepid economy like this one, the failure of a startup could be followed by months or even years of frustrated job searching. But as scary as it may be, the rewards can be even more impressive.
To get a feeling for the best way to make the leap into being your own boss, I talked to three men who have recently done it themselves: Chris Steiner, co-founder of Aisle 50, a Groupon for groceries; Aaron Perlut, a partner in Elasticity, a public relations firm; and Chad Stiening, co-founder and CEO at Kypha, a biomedical firm. Here is some of their best advice:
Deal With Your Fears
Given the state of our post-crisis economy -- and the fact that all three entrepreneurs are family men -- it isn't hard to imagine what their biggest fear was. "I realized that, if my startup failed, I might find myself scrambling back in the journalism world," Steiner recalls. "It would have been hard to find a job as good as the one that I was leaving. I also had a wife and child, which upped the stakes."
For Perlut, who started his company in the dark days of 2009, at the bottom of the economic downturn, the stakes were just as high: "I was terrified," he laughs. "I left a good job, with good benefits. My wife wasn't working at all, and we had -- at best -- two months worth of salary saved up."
But addressing their fears was the first step toward realizing their visions. Perlut realized that his vision of creating a different kind of PR firm outweighed the potential downsides of his leap of faith. For Chad Stiening, the founder of Kypha, the fear was inspirational: "I had a sense of desperation when we began," he recalls. "That made all the difference, because it pushed me right into the mode of making sure we had funding."
Focus on Your Hopes
If fears are inspirational, so are hopes -- and all three entrepreneurs set ambitious goals for themselves. For Steiner, the goal was largely personal. As a reporter who wrote about Silicon Valley startups, he often observed entrepreneurs. "I grew to envy their sense of progress, the feeling that they were building something," he says. I wanted to capture that myself. I wanted to catch the entrepreneurial fever."
Perlut's focus was equally ambitious: "I wanted to create a different type of workplace culture," he explains. He and his partners imagined a new kind of PR firm that integrated traditional methods of public relations with emerging social media and Web-centric trends. All were family men, so work/life balance and flexibility were major considerations: "We realized that work can take place in an office between 6 a.m. and 7 p.m., or it can take place at your home late at night, or at a coffeehouse in the middle of the day."
As for Stiening, his goal was perhaps the most ambitious of all: "I wanted to make a positive contribution to mankind," he recalls. "And I wanted to get the maximum possible benefit from my work."
Find a Support Structure
When Steiner sought funding from Y Combinator, the famed startup jumpstarter, he discovered something interesting: It seeks out young businesses in which the founders are close friends. To Steiner, who had known his partner for years, this made sense: "I had a pretty good idea of how he would deal with the disgustingly dementive stresses that we ended up enduring," he explains. "I trusted him and understood his motivations, which made it much easier for us to work together."
Hedge Your Bets
Acknowledging your fears can help give you an idea of where the potential pitfalls lie. For all three of these entrepreneurs, the fear of failure -- of not being able to provide for their families -- underlay the decisions they made as they built their companies. Steiner, the writer-turned-grocery-entrepreneur, had royalty checks coming in from his first book, and a second book on the way, which meant that he had a source of continuing income. It also didn't hurt that his wife was a teacher, which further helped with income and health insurance.
But Perlut and Stiening were both sole breadwinners for their families. In Stiening's case, that meant waiting to make the leap until he and his partner had secured two federal grants that, as he puts it, "gave us the startup capital that we needed to pay ourselves." Perlut and his co-founders, on the other hand, found an equity partner, who received a 70 percent stake in the company in return for a guarantee to pay their salaries for two years. Eighteen months later, they bought him out.
Prepare for Sacrifices
One common refrain from the entrepreneurs was that they were surprised by some of the sacrifices they had to make. Steiner notes that it's hard to escape his job. "It's like a monkey on my shoulder," he explains. "I can't leave my work at the office."
Perlut echoes this, noting that "I have to struggle constantly to not look at e-mails coming in on the phone." For that matter, he points out, he still has to buy the beer and take out the trash at his office. "We're still a startup, which means that I'm still making tiny little sacrifices," he explains "But they're definitely worth it."
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Bruce Watson is DailyFinance's Savings editor. You can reach him by e-mail at email@example.com, or follow him on Twitter at @bruce1971.