Many a start-up website will tell you to jump into your new business with both feet. Take the plunge and make your dreams a reality. But, in the real world you’ve got bills to pay and mouths to feed – let alone the security of a good job with a regular pay cheque. So, needless to say, many people don’t want to just tank their career on something that isn’t guaranteed.
But the dream still persists…
You want your new startup to be a reality. You know you can do it, but the risk is a real issue. So, can you start up a £1 million plus business whilst holding down a full time job?
The simple answer is yes.
My co-founders and I started www.lovethesales.com, a business valued at well over £1 million after its seed round, whilst all employed in senior full time roles. My hope is that this article will serve as inspiration for others that want to achieve the same.
Here’s what we did…
Framework
Firstly, we had to make sure we had a team that were up for the challenge. We all wanted something more than the 9-5, but had financial responsibilities that made taking a leap of faith too risky.
We knew we’d be spending a lot of our spare time on this project so we all committed to a weekly workload based on a ‘sprint’. This kept workload fair.
We didn’t want to jeopardise our current employment so we agreed that nothing should be planned or expected that could potentially be seen as a conflict of interests or affect our day job.
A simple agreement was penned that meant our shares were ‘vested’. This kept everyone interested in the project without having the ability to damage it should they wish to leave early in the process.
Finally, we were bootstrapping the project initially and knew we would need a little bit of capital to work with. We determined what sort of money we would need and then all committed to a monthly payment into the company to keep cash available.
Goal
Ultimately, we wanted to get to a position where we could attract and secure a seed round of investment. This meant we would then be able to give up our day jobs without the risk of having no money, as well as start spending on proper growth.
Setting some idea here about what that looks like is useful. What do you think would be sufficient KPI’s to attract seed investment in your market? Revenue growth, user base etc.
Strategy
Given that this project was about minimising risk, we did not want to spend time on something that was destined to fail. We wanted to work on the idea we had of making every sale on the internet available through one website and figured people would love it. But, we also knew we might be wrong – it could be a massive fail and we could be well off the mark of what people want. So, an MVP was the first thing to build.
If the MVP proved effective we would build a more robust site that allowed us to focus on KPI growth. This allows a switch from pure product, to marketing. With a better product available we could start to focus on SEO and PR.
With basic acquisition covered, we could switch some focus back to the product and start to work on retention.
This strategy allowed us to ensure we had a working product that was starting to find its fit in the market – an essential for attracting investment.
Tactics
So, what tactics did we use to make this magic happen?
- Weekly planning – keeping a robust plan of what everyone is doing is essential for team morale and for keeping momentum in the project.
- Open communication – being able to speak to the team quickly and easily is important for avoiding roadblocks and issues.
- Not sleeping – this sounds rubbish, but something has to give if you are starting a business in your spare time. You simply have to find time in the day to get your work done, so sleeping less was a genuine tactic.
- Effective use of time – inevitably you’ll get to a point where you have to make calls or have meetings during your working day. Early or late calls around your day job are a good way to squeeze this in, as well as using your lunch break. We also committed to using holiday allowance as a way to be available during a working day when necessary (this became more relevant as we started to meet investors).
- Free stuff, as long as it is useful – there are many free resources available to startups, but many are not very good or are simply trying to get you to spend money you don’t have. Find every free resource you can, but verify its use. For example, Bizspark from Microsoft is genuinely useful because it gives you free hosting for a long time – something that can be cost prohibitive for an early stage web business.
Outcome
So, after doing all this, what happened?
Firstly, we worked a lot of hours. We definitely had to burn the midnight oil to get all of the work done. As well as the weekend oil, the early morning oil…
But, it paid off. We built an MVP as planned and that made a few thousand pounds worth of sales. It helped us prove an initial concept and learn lots about what we had to do with the product. From there we could build a full version of the site and start to tweak it and improve it where necessary.
We focussed on our KPI’s and managed to increase them month on month as you would want to. This in turn gave us the confidence that we had some product / market fit and that we were a good prospect for seed investment.
With that in mind, we were able to secure a seed round at a valuation well over £1 million and eventually hand in our notice and go full time on the project.
Since then we have seen huge growth. Full time hours on the company meant a lot more focus and a lot more improvement. To that end we are now closing a Series A round and are about to set a course for world domination! Well, huge growth anyway…
Takeaways
The biggest thing to remember if you want to minimise risk and start up whilst in a full time job is the amount of time it takes. We gave up most of our spare time for a year. Lots of weekends and evenings working. Lots of lunch breaks making phone calls or meeting people. This certainly takes its toll. Be prepared for that.
Aside from that, the main thing is to have a good team of people you know and understand. Team morale is tested heavily in those moments where everyone is fatigued so it’s important to set out the ground rules and remain positive. As I said earlier, communication is key to this.
In regards to business focus, having a clear plan really helped us. We knew we were aiming specifically for a seed round and that we would have a better chance of securing that quickly and favourably if we had a working product. Although we didn’t have a specific date to hit, we had an end goal and this is great for focussing the mind.
So, if like us, you want to get a business going without the risk of leaving your job first, hopefully this inspires you to try our method. Good luck.