Should you get a job right now, or jump into the deep end with your own company? That's today's question from a reader:
"I've gotten a few offers with startups run by very smart and successful people and am torn between working for a bit, learning and making some money vs hustling on the side to bootstrap my company. What do you think are the potential downsides (if any) to trying to hustle my way to bootstrapping my startup? What do you think would be the potential positives of taking a job?"
I've never had a job, so I'm biased. If you can afford it, the skills of working for yourself translate very well into the continued skills of working for yourself. The advantage of a job though, are (1) you get paid to learn the domain knowledge from people who already get it, (2) you get to see well-running policies and structures in practice which can be a huge-time saver later, and of course (3) you're more guaranteed to get enough pay to stabilize or build up a bankroll.
Of course, #2 can be as much of a curse as a blessing, because you can learn "the way things are" and not imagine to do bigger/better later. Most of the times it's more work re-inventing the wheel, but if you're creative you'll frequently improve upon past designs of people.
Biggest concern is of course the cash. If you don't have a significant bankroll (or worse, if you've got debt) you want to remain cashflow-positive by some mix of consulting, contracts, or job or part-time job. I've resolved to pretty much never willingly go cashflow-negative again for the rest of my life, unless struck with a gigantic opportunity. The advantages to ratcheting up your net worth consistently and somewhat conservatively alongside working on high upside (but not exclusively, and not at the expense of positive casghflow)… it's too great to pass up. Protecting your cashflow while working on high upside somewhat pretty much guarantees success, whereas I've done high upside stuff — that's paid off, even!!! -- that hosed my cashflow for a year or two and set me back while ramping back up. Perhaps this limits my upside to some extent, but I don't think so. Running out of cash while turning profits is aggravating as fuck, and I had to abandon some lucrative margins on lucrative stuff for cashflow problems (and this is on stuff that worked!! And had very good two-year returns on investing in my own stuff — hell, most stuff fails so it's even worse for most people!!)
Working for myself generates me a lot of cash these days, so it's a non-issue and non-decision for me. But if you had a small bankroll (or debt), then don't go cashflow negative. Point #1 is basically a wash, because self-employed skills are more valuable than any skills you get by being employed I think except MAYBE domain knowledge, point #2 has pros and cons, so I'd boil it down to point #3 — can you stay cashflow positive on your own? If so, go for it. If not, consider the working route.
Hey, maybe I'm not biased actually. I used to be 100%-all-entrepreneurship-all-the-way. It is a more beefy skillset and forces you to do/learn more. But I'm going to play more conservatively in laying out cash now. I've done a lot of playing around with my cash that led to me to have to cut to the bone later, and endure a large amount of stress whilst in uncertainty. I'll never do it again. My advice: stay cashflow positive unless you've got a significant bankroll AND an incredibly amazing opportunity.
Feel free to send your questions to firstname.lastname@example.org.