Zuckerberg. Gates. Jobs. All entrepreneurs who famously left college dorms to change the world, giving their entire young lives to build their fledgling companies. But what about entrepreneurs like me in their thirties and forties with kids, spouses, dogs and turtles to feed? How do grown ups balance a real life with the demands of a needy little start up?
Keeping our day jobs and moonlighting entrepreneurship eventually has diminishing returns. For the same reason that investors are weary of part-time founders, we must all eventually cross that rickety bridge to full time entrepreneurship. At some point, usually before we’re “ready,” we’re either in or we’re out.
Never is time more painfully money than the early days of a lean start up. Some say you need at least 12-24 months of a financial runway for a real shot at success. Two years of spending without expecting to make a dime. Even saving on a decent salary, the longer we wait the more our financial responsibilities grow. Ask me how I know.
Lifestyle modification is a harsh reality of lean entrepreneurship. Sure, we can keep our company expenses lean, but how willing are we to do the same with our families and lifestyle?
If spreadsheets show personal expenses leading to a start up’s untimely demise, then hard choices are ahead. To make matters worse, behind those choices are insidious psychological hurdles – starting with our own egos. After all, we have a reputation to uphold. That cozy place by the beach we love to brag about on Facebook ends up a reflection of our own self worth.
So what’s the answer? We must all decide according to our priorities. Your own realities aside, offshoring your start up is an increasingly attractive option. Just as companies offshore their call centers and programmers to lower costs, so could lean entrepreneurs offshore themselves to significantly lower both personal and business costs.
Several Latin American countries, including Colombia, Chile, Brazil and Peru, are investing in national programs to attract start ups from abroad. It’s an attempt to diversity their otherwise commodity-dependent economies. National accelerator programs like Start Up Chile are leading the way by fostering local entrepreneurship and attracting talent from abroad with government grants for start ups that can launch in Chile and eventually scale internationally.
Cut your expenses in half and add from $30,000 to $120,000 in non-equity seed funding from programs like Start Up Chile, and incubating your company in Chile vs the U.S. could mean an extra $100,000. If you estimate your valuation at say a million dollars, that’s 10% more of your founder’s equity that could be saved or used for future investors at a higher valuation.
We may never be 20 again, with just one mouth to feed and time to spare, but we can deflate some of our overhead by working beyond your comfort zone. Question is, how much of what you perceive to be valuable are you willing to let go to give your risky start up a real chance to succeed? Only you can answer that.