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Wow, thanks for all the comments! @nickb: That Morgan Stanley report is what prompted this post. I think it is prudent to question the source, however. @shay

Wow, thanks for all the comments! @nickb: That Morgan Stanley report is what prompted this post. I think it is prudent to question the source, however. @shayan: My team and I have 6 months of savings, meaning we can pay the bills for 6 months before we either need income or investment. Do you think that is long enough? @skmurphy: This makes a lot of sense to me, there are a few anecdotal stories about 2002-2003 being a great time to have started a company. And theres that report that ~50% of pre-1999 companies are still around. Good point. After thinking about it some more I came to several comclusions: 1. I am very unhappy at my current job. I'm young intelligent (or so I think), hard working, and I have big dreams. I am capable of doing much more with my life than this job. 2. If my startup fails, I can blame it on the economy. 3. Maybe it is a bad time, and maybe it is a mistake to start a company right now. But its a bigger mistake, even a tradgedy to be afraid of the unknown. I won't let my life be run by fear. I'll keep the YC crowd posted about our progress ;-)

shayan 19y ago
Since I have no idea what your product is, how big your team is, how much experience you have and what resources you have access to, it is hard to say how much saving is good and how much time you can spend with it (since the costs are also unkonwn). But I would say in general you would spend about 6 months developing your product, and having something ready anywhere from a good working alpha version to something more of a working prototype and work in progress. I hardly doubt there are too many companies that can start generating revenues (let alone profits to spend on living expenses) within six months from the day they start. So I would say the best way to do this is to start working on the idea before you quit your job, try to get a prototype or something together, and start looking for funding. I think in your case at the end of six months you will def need outside money (again since I doubt you'll be generating revenues by then and you are out of savings). So regardless, if you do quit, I would recommend you looking for money right away. The worst thing to ever do is to ask for money when you need it, and when you are under pressure. Take your time, do your shopping, find out how interested people are in your product and try to raise some smart money before your time is up. and please do keep us in the loop, and good luck to you
- CarpeDiem 19y ago
  We already have a feature complete beta, we've been working on it for 8 months while keeping the day jobs. Most of the remaining work to do before we launch is superficial, just refining the UI and "making it pretty". We have been actively seeking money, but have gotten blank stares from investors when we explain that we have kept our day jobs thus far. So, I think I am agreeing with what you're saying, thanks for the input!
  - nostrademons 19y ago
    What market are you in? 6 months seems to be cutting it pretty close - as a general rule, everything takes 2-3 times longer than you expect it will. Remember, there's a good chance your first launch will fail. We launched 2 sites in the 9 months where I kept my day job, and both went kerplop. That could be because of a half-hearted effort (the app I'm working on was also the main plan, I just couldn't concentrate enough to build it while I still had the day job), but in general easy sites don't make money, and sites that make money aren't easy.
  - shayan 19y ago
    well if you already have a feature complete beta, and all that is left to do is to make it look pretty, then congrats and I would recommend the following. You don't necessarily need money right now! Try to get a small group of beta users on your system, see their reactions and take their feedback. Then try to slowly grow this group to get more people using it. It is always a lot easier to raise money with a working product and some users on it. For doing any of these you guys don't have to quit your day jobs, if you have managed to get this far without quiting I am sure this will be doable too. Or you can do what the guy's at hotmail did (read the second chapter in Founders at Work) one person quits and the other works and they share the income, until they get to a point that they can get funding or generate revenue. Also as a reminder, the more you have achieved, and the more you have to show, not only the easier you can get funding, but the higher you will be evaluated, which is definitely to your benefit. I would say giving out shares and raising money just so you can pay for your life expenses is not the best idea, get a line of credit! Anyways, it looks like you are in better shape than I thought. All the best to you.
kmt 19y ago
Email me at the address in my profile.
ocamlback 19y ago
"@shayan: My team and I have 6 months of savings, meaning we can pay the bills for 6 months before we either need income or investment. Do you think that is long enough?" I'm not @shayan, but I'll put in my 2cents: no. It's not enough. Given the current economic conditions and the realities of startups you should have more like 18 to 24 months worth of expenses saved up. Because: 1) you don't want to have to go hat in hand to VC at a very vulnerable time and 2) you don't want to have to go back to work in the middle of your development cycle because you ran out of money. Yes, you may think it'll only take six months till you get some cashflow, but it'll likely take longer than that. Now is as good a time as any to do a startup, but do make sure you're adequately capitalized.

shayan 19y ago

Since I have no idea what your product is, how big your team is, how much experience you have and what resources you have access to, it is hard to say how much saving is good and how much time you can spend with it (since the costs are also unkonwn). But I would say in general you would spend about 6 months developing your product, and having something ready anywhere from a good working alpha version to something more of a working prototype and work in progress. I hardly doubt there are too many companies that can start generating revenues (let alone profits to spend on living expenses) within six months from the day they start. So I would say the best way to do this is to start working on the idea before you quit your job, try to get a prototype or something together, and start looking for funding. I think in your case at the end of six months you will def need outside money (again since I doubt you'll be generating revenues by then and you are out of savings). So regardless, if you do quit, I would recommend you looking for money right away. The worst thing to ever do is to ask for money when you need it, and when you are under pressure. Take your time, do your shopping, find out how interested people are in your product and try to raise some smart money before your time is up. and please do keep us in the loop, and good luck to you

CarpeDiem 19y ago
We already have a feature complete beta, we've been working on it for 8 months while keeping the day jobs. Most of the remaining work to do before we launch is superficial, just refining the UI and "making it pretty". We have been actively seeking money, but have gotten blank stares from investors when we explain that we have kept our day jobs thus far. So, I think I am agreeing with what you're saying, thanks for the input!
- nostrademons 19y ago
  What market are you in? 6 months seems to be cutting it pretty close - as a general rule, everything takes 2-3 times longer than you expect it will. Remember, there's a good chance your first launch will fail. We launched 2 sites in the 9 months where I kept my day job, and both went kerplop. That could be because of a half-hearted effort (the app I'm working on was also the main plan, I just couldn't concentrate enough to build it while I still had the day job), but in general easy sites don't make money, and sites that make money aren't easy.
- shayan 19y ago
  well if you already have a feature complete beta, and all that is left to do is to make it look pretty, then congrats and I would recommend the following. You don't necessarily need money right now! Try to get a small group of beta users on your system, see their reactions and take their feedback. Then try to slowly grow this group to get more people using it. It is always a lot easier to raise money with a working product and some users on it. For doing any of these you guys don't have to quit your day jobs, if you have managed to get this far without quiting I am sure this will be doable too. Or you can do what the guy's at hotmail did (read the second chapter in Founders at Work) one person quits and the other works and they share the income, until they get to a point that they can get funding or generate revenue. Also as a reminder, the more you have achieved, and the more you have to show, not only the easier you can get funding, but the higher you will be evaluated, which is definitely to your benefit. I would say giving out shares and raising money just so you can pay for your life expenses is not the best idea, get a line of credit! Anyways, it looks like you are in better shape than I thought. All the best to you.

kmt 19y ago

Email me at the address in my profile.

ocamlback 19y ago

"@shayan: My team and I have 6 months of savings, meaning we can pay the bills for 6 months before we either need income or investment. Do you think that is long enough?" I'm not @shayan, but I'll put in my 2cents: no. It's not enough. Given the current economic conditions and the realities of startups you should have more like 18 to 24 months worth of expenses saved up. Because: 1) you don't want to have to go hat in hand to VC at a very vulnerable time and 2) you don't want to have to go back to work in the middle of your development cycle because you ran out of money. Yes, you may think it'll only take six months till you get some cashflow, but it'll likely take longer than that. Now is as good a time as any to do a startup, but do make sure you're adequately capitalized.