I've been working for myself for two and a half years. I've been fortunate enough to work on a bunch of different projects during that time, both independently, with partners, and with other companies. The structure of those projects has loosely taken the form of my own startups/ideas, investing in and advising other startups, consulting to established companies, and speaking at public and private events. During those engagements I've learned a few things that I'd like to share.
- Be careful who you start a business with. I've worked with my brother on several projects, including investing, advising, and building a product. We're very different people but our skills are complementary and our 30 years as brothers has made frank communication very easy. I really enjoy working with my brother and I like to think we've been a reasonably successful team. We're not without our disagreements of course, but that's natural and most of them are resolved without the need to resort to noogies and telling mom. We're the lucky ones.
When choosing a business partner or co-founder, it seems logical to work with someone you have a previous relationship with; friend, relative, spouse, etc. But I've seen this go wrong on many occassions, and friendships have been destroyed, marriages broken, and families irreperably damaged. Just because you get along on a personal level does not mean you'll be compatible business partners. Instead, focus on finding someone with complementary skills to your own. It's important to find someone who's strong where your weak. I like to use the tennis doubles partner analogy: there's no point in both of you being awesome at the baseline but both useless at the net. You have to be greater than the sum of your parts.
- Fundraising is time consuming, distracting, frustrating, exhausting and not fun or cause for celebration. Seriously, the process is a gigantic pain in the ass. You can always spot a founder who's in the middle of fundraising because they're distracted, stressed, unable to focus, and rarely answer their email/phone/IM. The best advice I had on this was from Joe Stump who said block out 60-90 days, forget about working on your actual product, forget about a social life, and don't let your frustration and exasperation with the process coerce you into signing a mediocre term sheet with an investor who's not the right fit. Joe has an outstanding presentation on this subject which I strongly encourage you to watch. So think carefully before you begin this process and ask yourself some tough questions about if/why you need outside capital. Hold on to as much of your company as you can for as long as you can.
- You don't have to sacrifice your soul to succeed. I work from home and I have a phenomenal wife (let's not mince words here, I'm punching WAY above my weight in that department) and an awesome 19 month old son. When I first started working for myself I had this awful, consuming guilt that I should be working constantly because if I wasn't working then I wasn't providing for my family. So for way too long I forced myself to work a set number of hours each day, regardless of how productive or "valuable" those hours were. That's moronic and it took me way too long to figure that out. What's the point in sitting in my office staring at the screen doing nothing when I could be playing with my son. There are days when I feel like I've accomplished a lot by 3pm so I get up and I leave my office. Why force myself to sit in my chair until quittin' time? Matt Haughey gave an amazing speech recently that really made me pause and think about how I was prioritising my time. The key isn't to work long hours, it's to make the most of the hours you work. So when you leave the office for the day, don't check your email for the rest of the day, leave the blackberry at work or in your office, and make the most of the time you have with friends and family. You can absolutely be successful with this model. Just ask Facebook COO Sheryl Sandberg. Or Ryan Carson. As the old saying goes, no one lies on their deathbed wishing they'd spent more time at the office.
- It's ok to want to make money. People often ask you why you start a company or build a product and the "correct" answer is always something like "I want to change the world" or "The competition sucks" or "I'm just passionate about x". You're not supposed to say "because I want to make a shit load of money." Let me tell you right now, there is NOTHING wrong with saying or feeling that. Nothing at all. In fact if you didn't think that, I'd think you were a little weird and frankly I'd have a hard time trusting you. But here's the important thing to understand; if you don't love what you're doing or it's not in an industry or area your passionate about, you'll still be able to make money, but it'll seem like a chore. It won't be nearly as fun to work on and motivation will be hard to come by, especially in the early days when the money hasn't actually started flowing in. If you can acknowledge that you love the industry your working in AND you want to make a ton of money, I'll back your horse any day of the week. Oh and I should add a brief postscript here; it's ok to just want to make a little bit of money. There is absolutely nothing wrong with lifestyle businesses and don't let anyone tell you otherwise.
- Your best friends are your lawyer and your accountants. One of the biggest mistakes I made when starting out on my own was not finding a good accountant. It seems like such a luxury but come tax time you'll realise it's one of the best investments you can make. This is particularly true for me when I'm juggling investments and income from different sources in different countries AND I'm a dual citizen. But even if you're situation isn't as complex as mine, you'll benefit professionally and financially from the quarterly advice you'll get from a solid accountant. At the very least they'll make sure you're not overpaying your taxes or setting yourself up for an audit. It also means you can outsource some of the mountains of paperwork that comes with running your own business, and as your business grows, takes on employees and capital, you'll be glad you got things right the first time.
- You have to be disciplined. To work for yourself at your own company takes an extraordinary amount of discipline and focus if you're going to pull it off. Some people are born with those skills but most of us aren't. There are so many distractions and no boss around to keep your nose to the grind stone. Sure you could be ultimately answerable to investors but not everybody that works for themselves has taken investment.
The challenge is compounded if you work from home. There's no clear boundaries between work and home and after a few weeks you find yourself getting up at 10 am and working in your pajamas. Then there's the lure of the TV and XBox if you're into that type of thing. Not to mention the constant pull of family and friends.
So how do you stay focussed and motivated when you're the boss? Some people use rewards ("I get to do x once I've finished y"), some use focus tools like Pomodoro, some use isolation. What I use to motivate myself is my life goals. I know what my goals are in life and I can cross-reference everything I'm doing with how it will help me achieve my goals. If what I'm doing isn't helping me ultimately achieve my goals, then I stop. It's a pretty easy method and I have a lot of visual reminders around my office to help me; picture of my son and wife, pictures of my nieces, sketches of the companies I'm working on or investing in, picture of trips I want to take, etc. I like the structured method that Ryan Carson has adopted to great affect but the nature of my work means I'm dancing between several projects at the same time, as well as managing a speaking career and investments, so it's absolutely vital that I stay focussed and productive when I'm at my desk. And that takes discipline.
I feel like there will be a few more posts on this topic in the future but in the meantime, if you work for yourself what have you learned the hard way? If you're not self-employed, have you considered it? What's stopping you?