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It takes three years to build a business

jacquesmattheij.com

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Re: It takes three years to build a business

#51

Post by ScottBurson »

asmithmd1 wrote: post #34
edw519 wrote: post #27

Great post, Jacques. Thanks for your kind words. People might even consider doing business with you, but nobody wants to be 'first' for fear of being burned. This can also work in your favor... It's rare, but sometimes you can find someone who does want to be your first customer. When this happens, it's solid gold and one of your fastest shortcuts. Others call them "champions"; I prefer "sugar daddies". I have had th…

Your original sugar daddy did not mind that you sold the solution that he helped develop to other companies? That is the situation I am in. I have developed solutions to problems for the US's 4th largest company in a space with hundreds of other competitors. I own the technology but they would certainly take a dim view of me selling it to their competitors - and stop using me thus cutting off my only source of income…

It doesn't sound like they negotiated an exclusive license to the technology in the initial contract. If that's what they want, they should pay for it. Assuming the value of your work is now proven, I think you should work that angle. "You see how valuable this is; wouldn't you like to have exclusive rights to it?" The price should go up by at least 10x.

Re: It takes three years to build a business

#52

Post by Periodic »

mattmanser wrote: post #28

I thought he'd stopped reading HN? The original guy he's talking about was just freelancing. I'm a freelancer and I made money from day one. A friend of mine quit his job 2 months back. Again, made money from day one. Difference between us and the guy in the story? We had contacts and relationships already built from working a few years. What I'm saying is that most of this article is way off the mark for freelancing…

I quit my salaried day job with the intent of going into startups or consulting. I planned to take a week off, then seriously start looking for contracts, and if I didn't find anything I'd start looking for a more regular job after a month or two.

I was contacted the week I updated my LinkedIn profile to list myself as freelancing. An old friend had a husband who needed help with a big contract he had, and we ended up splitting the work fairly evenly, making good money, and creating a good site for a very large client.

I was surprised how easy it was to find contracts. In fact, I haven't had to go hunting for them yet.

I'll admit, I've been making less now than I did with my salary, but that's in a big part due to working on a startup on the side.

Re: It takes three years to build a business

#53

Post by Periodic »

A post like this makes me question myself. How do I know when it's right to declare a business failed?

I joined another person on a startup about six months ago. We have one client and it might start expanding, but then again, we are two months past our expected initial launch and at our current rate we won't be launching until January. He has been getting more excited, but I have been getting less excited. I'm pretty sure I want to pull out because our delays seem to mostly be due to poor management by him (it was his project and is his baby) and I don't really trust it in the long run, however there are some other factors. I see our growth plateauing when he runs out of friends who he can convince to pay us, and I am not enjoying working with him.

I get frustrated when people seem to be saying I should just stick it out. Am I just a wimp who is fleeing at the first sign of trouble? Am I just getting jitters about the amount of investment? Or am I wisely investing my time in other activities that will grow my career in other ways? I don't want to invest three years of my life if the warning signs are all there.

I think my saving grace may be that we haven't formally set up a vesting strategy, so I could exit full participation and become an early investor instead. Our lack of paperwork is another one of the warning signs.

Re: It takes three years to build a business

#54

Post by dendory »

mattmanser wrote: post #28

I thought he'd stopped reading HN? The original guy he's talking about was just freelancing. I'm a freelancer and I made money from day one. A friend of mine quit his job 2 months back. Again, made money from day one. Difference between us and the guy in the story? We had contacts and relationships already built from working a few years. What I'm saying is that most of this article is way off the mark for freelancing…

How are you making money freelancing from day 1? Chances are you went in the same field you already worked in, had contacts, knew how to get clients, etc. When starting freelancing in a new domain, or starting a business, it takes a lot longer to start making money.

Also, making money and being viable is two thing. I myself am trying to survive in the world of freelance. I've been going for a few months now and I make money. But it's very little money, no where near as much as I would need to keep going full time. Is it a failure because I'm 3 months into it? Hard to say, but I don't think so yet.

Re: It takes three years to build a business

#55

Post by Bootvis »

irrumator wrote: post #43
mattmanser wrote: post #28

I thought he'd stopped reading HN? The original guy he's talking about was just freelancing. I'm a freelancer and I made money from day one. A friend of mine quit his job 2 months back. Again, made money from day one. Difference between us and the guy in the story? We had contacts and relationships already built from working a few years. What I'm saying is that most of this article is way off the mark for freelancing…

A lot of people have claimed to have stopped reading HN publicly but sorta just came back anyways. Even mattmaroon is around now.

AFAIK he has always claimed to stop contributing as much. The only way to contribute less for him was to not contribute at all.

Re: It takes three years to build a business

#57

Post by kragen »

mattmanser wrote: post #28

I thought he'd stopped reading HN? The original guy he's talking about was just freelancing. I'm a freelancer and I made money from day one. A friend of mine quit his job 2 months back. Again, made money from day one. Difference between us and the guy in the story? We had contacts and relationships already built from working a few years. What I'm saying is that most of this article is way off the mark for freelancing…

> The original guy he's talking about was just freelancing. I'm a freelancer and I made money from day one. … We had contacts and relationships already built from working a few years.

Yeah, a thing about that is, it's hard to have those contacts and relationships in place when you're 20. A few people manage it, but most build up those networks over a period of years.

Another thing, which I didn't realize when I was 20, is that if you make contacts with a lot of 20-year-olds, when they're 30 or 40, some of them will be in a much better position to partner with you than when they were 20. The guy who was working as a manual software tester for a telecom firm at 20 may be the CTO of a startup at 30; the guy who's struggling through his CS degree at 20 may be managing a project at Oracle at 30. But he has a lot more time to get to know you when he's working at the telecom firm or struggling through CS. So even if you're a world-class connector like David Weekly or Adam Rifkin, with a Rolodex full of 1500 contacts at age 20, those contacts will be a lot more valuable for business when you're 30.

Re: It takes three years to build a business

#58

Post by bradfa »

ja27 wrote: post #41

I'm struggling with this idea right now. Some background: I was laid off recently and am torn between getting another coding job or trying to build a business. I'm a bit older, married with kids, and only have about 9 months of savings ready. So I'd normally never consider starting a business because of this long ramp-up time, but the "gold rush" of mobile apps is still very appealing. It seems quite easy to ramp up…

Look for a full time job half the day and code up your own projects the rest of the work day. Then, if you find a good paying job you think you'll enjoy, you win. Or, if you make money doing something interesting yourself, you win. :)

If you've really got 9 months of salary in the bank, risk 3 of it trying to build something yourself. If you can get some revenue in the 3 months, maybe rethink looking for another job. If not, focus more on getting a stable income. If you're making revenue off your own deal, those 9 months of salary might last longer, giving you more runway to build the business.

The, "why isn't everyone doing this" is because there's risk and it takes real dedication and skill. You will most likely fail. Those 9 months of salary in the bank make failing less daunting. Go for it!

Re: It takes three years to build a business

#59

Post by cgopalan »

Duckpaddle2 wrote: post #21

I just have a small quibble about the statement "3 years to be exact". Having built several companies over the years, no time line is exact. That doesn't mean it's not a good estimate, just that the cliche may be taken literally. However, how does this fit into the "fail often, fail quickly" advice I have seen so often in this forum? Does quickly mean 3 years? Just a thought...

Fail often, fail quickly mostly applies to the failures you will have along the way during those 3 years. I am not sure it will take 3 years to break even, but the business taking a few years time to break even is definitely not in contradiction with the fail often fail quickly advice.

In fact, fail often fail quickly, if done effectively, will lessen the number of years to break even (IMO).

Re: It takes three years to build a business

#60

Post by mikeleeorg »

This reminds me of some casinos (perhaps not the more sophisticated ones though), where playing certain games had a higher chance of success - if you had enough of a bankroll and staying power to last.

I like the underlying premise of how businesses take time to succeed. The timing varies significantly with the type of business though. For restaurants, I've often heard "5 years" as the tipping point. For certain kinds of web-based businesses, it can be shorter. And for capital-intensive businesses, perhaps much, much longer.

But basically, you need enough of a bankroll and staying power to last.

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