With the risk of sounding ignorant I'm going to go out on a limb and say one of the biggest missing pieces for most people is financial security - or at least the availability of a safety net.
Based on my experience there are four scenarios where someone could start a company:
- You have financial support from someone (whether you're in college or have a spouse that makes a good income - probably the most common)
- You have money yourself (perhaps from a previous company you started, etc. - fairly common)
- You relied on outside financial support while you saved up enough money to start your startup (this is most likely a scenario where a parent paid for ones college so they were able to save right after graduating - fairly common)
- You built a company that can sustain you and your employees from day one (very uncommon)
There are probably other obvious scenarios out there but these are based on my experience reading articles and speaking with founders.
Once you have that financial security it becomes much easier to put those actions into motion, and they become less hollow. You see them as tasks now because you actually have the time and resources to execute on them.
i'd thought about adding something about this but decided it's worth a full post.
i don't think you need very much of a cushion--i.e., 6 months of living expenses saved up is more than most founders have. but saving up a bit of money before starting a startup is definitely a great thing to do, and if you're an engineer willing to live cheaply, shouldn't take very long.
that said, startups are not the way to optimize for financial stability and not the right choice for everyone. if i had little money saved up and a family that depended on me, i'd choose being an engineer at a big company instead of starting a company until i felt i had some safety net in place.
Please write a post about financial security as a pre-req to doing a startup. I advise having at least a year's worth of living expenses saved. Because you don't want to be worried at all in the beginning about how you're going to pay your bills. You're going to start worrying when that money is half gone, and it sometimes takes more than 3 months to get traction.
I think many founders pursue funding too soon (and thus give up too much equity to VCs much too soon) because they didn't have enough savings at the start. I would expect VCs to disagree with me about that because it's in their interest to do so. :)
Remember that a startup isn't a small business. Your venture backers want you to be hungry -- financial stability for you lowers the probability of a 50x exit!
This is the biggest mistake that I see startups make. Startups ARE small businesses, they are just supposed to be growing faster than "normal" small businesses. But many people make the mistake of not being a "small" business as a startup, and then they realize that they have no idea what to do when they have a medium size business on their hands (or never create any business at all in spite of products).
Avoid venture backers until you can't - entrepreneurs existed before venture capital, and exist outside of it as well. Venture should fund growth, but not inception.
From what I have seen, yes. Stable = complacent and comfortable in their mind.
On the brink = Will work 100 hrs a week and must succeed to survive.
Makes sense from that narrow perspective, but I think that only works in cases where hustle is the majority of the work. Come to think of it, the majority of investors are only interested in problems which are fairly low tech but require a lot of marketing/hustle.
I think this approach is underrated and can highly recommend it.
If you are an engineer and you keep your living expenses low, you can most likely survive doing consulting/contracting for 1 day per week, leaving you the rest of the week to work on your startup. This minimizes your financial risk and leaves your savings intact, leaving you only with the opportunity costs (but if you are worried about those, you probably shouldn't be doing a startup in the first place).
Additionally this lowers the pressure to find investors quickly (or at all) and gives you the time to build something great.
Based on my experience there are four scenarios where someone could start a company:
- You have financial support from someone (whether you're in college or have a spouse that makes a good income - probably the most common)
- You have money yourself (perhaps from a previous company you started, etc. - fairly common)
- You relied on outside financial support while you saved up enough money to start your startup (this is most likely a scenario where a parent paid for ones college so they were able to save right after graduating - fairly common)
- You built a company that can sustain you and your employees from day one (very uncommon)
There are probably other obvious scenarios out there but these are based on my experience reading articles and speaking with founders.
Once you have that financial security it becomes much easier to put those actions into motion, and they become less hollow. You see them as tasks now because you actually have the time and resources to execute on them.