Post: #1

I know there are a few on this forum, and I've always wondered about this. We all know about the ones who hit it big after enough failures and persistence, but how do you support yourself until then? "With a job" may be an obvious answer, but I have gotten the impression the typical aspiring entrepreneur is not waiting tables or holding a 9-to-5 while starting a business "on the side," but rather is someone devoted to his business pursuit full time with all his energy. I further have the impression entrepreneurs do not usually come from wealthy families, and don't all have a cushion to fall back on (I suspect people from those kind of backgrounds have no interest in being self-starters, since they are born with at least a few opportunities).

If you're one of these guys working hard to bring your business vision to life while pursuing success and freedom, feel free to share. (Relevant book recommendations would be welcome too.)

Post: #2

Everyone needs to make money while pursuing their goals, I bartend and work on other projects on the side. I work less hours and make more money than a lot of my friends that have 4 year degrees.

Post: #3

There are a million ways to make cash outside of selling your labor at a fixed rate per time.

1) Selling stuff
You find something, or you make something, and you sell it.

2) Selling a service
you find out what people want, you do it for them, or you get people to do it for them.

3) Arbitrage
- buy low, sell high.
- buy low, fix up, sell high

WIA

Post: #4

At the very beginning I was living on a few hundred dollars a month. You should be able to make at least $50,000 a year within 12 months of 100% focus.

Post: #5

(12-03-2013 11:10 PM)babelfish669 Wrote:  At the very beginning I was living on a few hundred dollars a month. You should be able to make at least $50,000 a year within 12 months of 100% focus.

Doing what? blog? freelance?

Post: #6

Right now, flipping affiliate marketing websites and blogs that I created last year, for much much more than what they are worth. And working on some new ones, which are currently providing a modest income. Have to scale up soon.

But for immediate cash requirements, I rely on some freelancing work. 2 weeks back I sold one of my websites for $1000, so I've put off the freelancing for a while now.

Post: #7

If you're in college there's a couple of obvious ones...

Post: #8

It's a good idea to do something quasi-entrepreneurial like Freelancing, where you are already running a business in many ways just by doing your job. Sitting around the cubicle dreaming about some hypothetical better future seems like a bad idea.

Post: #9

(12-04-2013 12:51 PM)Architekt Wrote:  If you're in college there's a couple of obvious ones...

Go on...

Post: #10

If you are a programmer or have a programmer friend then you can go to Singapore, network, and raise venture capital to launch a company. You can live off this money (frugally) and make a salary while building your venture.

This is specific to tech startups obviously.

Post: #11

YMG, I do remember reading last year that you had relocated to Singapore to work on your startup. I hope all is going well. Now, you mentioned tech startups, and that's something I was just thinking about. Here is something I was wondering.

What are the costs for a tech startup? Let me explain a bit. Firstly, a tech startup won't require manufacturing or creating anything physical (unless it's hardware), so there are no such costs, right? How about the funding part. Do all tech startups basically get together, develop an idea, then go look for funding?

My question, basically, is how much of your own money must you invest in order to launch a tech startup?

The reason I am asking is that you hardly ever hear of some tech entrepreneur talking about how he invested his life savings into some business, unlike say, a business owner type who opened a restaurants/store/retail business, etc.

Post: #12

Going for that online monies!

Post: #13

(12-07-2013 04:51 PM)w00t Wrote:  Going for that online monies!

You can say that!

Post: #14

(12-07-2013 03:35 PM)Fathom Wrote:  YMG, I do remember reading last year that you had relocated to Singapore to work on your startup. I hope all is going well. Now, you mentioned tech startups, and that's something I was just thinking about. Here is something I was wondering.

What are the costs for a tech startup? Let me explain a bit. Firstly, a tech startup won't require manufacturing or creating anything physical (unless it's hardware), so there are no such costs, right? How about the funding part. Do all tech startups basically get together, develop an idea, then go look for funding?

My question, basically, is how much of your own money must you invest in order to launch a tech startup?

The reason I am asking is that you hardly ever hear of some tech entrepreneur talking about how he invested his life savings into some business, unlike say, a business owner type who opened a restaurants/store/retail business, etc.

The costs for a tech startup vary dramatically. It depends on what you are doing, who you are hiring, how smart you are with your money, the amount of Singaporeans you hire vs. foreigners in Singapore vs. building a dev team in Phils/Vietnam.....the list goes on and on.

That's like asking me how much it costs to open a restaurant.

Are you opening a hot dog stand? An Arby's? A fine authentic French Michelin rated restaurant?

If you are a hacker with business experience then you can probably spend close to nothing building something like instagram or snapchat and build your own dev team in the Phils or Vietnam.

If you are a "business guy" then you'll need to onboard a CTO - assuming this is a foreigner living with you in SG then the annual burn increases by at least 48K SGD to 150K SGD, depending on whether you give him equity/options or just a salary.

There are definitely costs in a tech startup. You have to pay overhead for the physical office where you are working. You have employees, particularly engineers and designers and, once you prove your MVP, you have to build a salesforce. Again, this varies dramatically across the board. Are you building a mobile app that will be pushed in the app store? Or are you building a groupon clone in Indonesia? The salesforce you need to hire will be dramatically different in scale and scope.

It goes back to the restaurant analogy. If you are opening a McDonalds you can hire minimum wage people with no education. If you are opening a Michelin rated French restaurant then you need experienced chefs and waiters.

How much of your own money do you have to invest in the startup? You can invest zero dollars if you want but that will affect the opinion of the VCs or angels throwing their cash into the pot. If you have some skin in the game (even as little as 20K) then they will take that as a sign of good faith.

I hear about tech entrepreneurs throwing their money into new startups and businesses all the time. Elon Musk nearly went broke trying to keep Tesla alive. That's the nature of being an entrepreneur.

This life is not glamorous. You guys should watch "Pirates of Silicon Valley" to get an idea. You will work your fingers to the bone for many years with absolutely no guarantee of success while living at a noticeably lower standard of living than your peers (especially if you went to a good university).

Anyway, sorry for that rant and tangent.

The point is that there is no clear cut answer to your question unless you define it more clearly.

My answer is that you should try to spend as little money as possible to first prove your concept....build an initial MVP prototype, get people to pay you money for it, write up a business plan and presentation, then hit the streets looking for capital.

Write up a term sheet that heavily favors you over the investors. Usually VCs and investors approach you with a term sheet. People are also lazy though. If you come to them with a term sheet that heavily favors you then you take the initiative and first step. If you already have an MVP and prototype that works and is making some money, you are arriving with a position of power and leverage.

My advice is that you build something that solves a problem for people and they give you cash to use it. Once you have that you have the ability to control your destiny.

Further Reading:

Rework, 37 signals

Paul Graham's essays at paulgraham.com

The Millionaire Fastlane by MJ Demarco

Work the System - Sam Carpenter

Note - Rework and Paul Graham are pretty diametrically opposed on some important points, particularly regarding raising capital. I've both bootstrapped and raised capital and my thoughts at this point are that they are both a double edged sword. Bootstrapping is much more about trying to not die on the very limited funds you have, but you will be forced to make better decisions with your money.

Raising capital gives you a longer runway to scale up but also a higher liftoff you need to make upon a liquidation event. Also, dealing with VCs can be annoying. Besides the capital and some advice, usually they are more of a time suck than a means of helping you. When you take capital, you have to understand that these people don't care about you and your dreams - they want to make a return and they are fine with the ends justifying the means. Keep that in mind.

Watch "unlearn your MBA" by David Heinemeir Hansson (might have spelled that wrong).

Post: #15

Freelancing right now, I'm starting an Amazon affiliate site shortly.

Post: #16

I just started my first venture today and it's already profitable.

Fliers (300) - $16.70
Gas- $20

Walked around neighborhoods and dropped off my fliers. I dropped off 130ish of them today.

Got a call an hour ago requesting my services for tomorrow. $40.

EDIT- If it grows then I can hire some help and kick back. All I do is collect the check. Also...

I QUIT MY JOB!!! AHAHAHAHAHAHAHA!

Post: #17

(12-07-2013 09:06 PM)Edmund Dantes Wrote:  I just started my first venture today and it's already profitable.

Fliers (300) - $16.70
Gas- $20

Walked around neighborhoods and dropped off my fliers. I dropped off 130ish of them today.

Got a call an hour ago requesting my services for tomorrow. $40.

EDIT- If it grows then I can hire some help and kick back. All I do is collect the check. Also...

I QUIT MY JOB!!! AHAHAHAHAHAHAHA!

Nice one mate. What type of business is it?

I spent just an hour on the advice of a mentor cold calling on Friday. Only about twenty houses in a reasonable area (500k - 1M type houses)

Game training helped A LOT. It's like approach anxiety with girls, only they're potential clients. I had some serious beginners luck. I've just put in and had accepted a quote for a £250 garden job, and waiting to hear back on a £2500 fencing job. About three others sounded very interested, and I think I made a connection. My plan is to build by doing more cold calling whilst keeping an eye on my men doing the work.

It knocks the spots of a simple leaflet drop in terms of return rate. With a pure leaflet drop, I get a return rate of 1-2%. With the one quote accepted from 20 doors worth of cold calling, I'm already at a return rate of 5%. if the fencing job comes in it'll be 10%! I Give them my leaflet, of course, but sell myself in person. It gets easier once you've knocked the first couple of doors, and I'll keep reminding myself that it's quicker and easier to knock twenty doors than drop 100 leaflets.

I reckon weekday mornings are the best time for this. Bored housewifes (only two men answered the doors, and their reaction was noticeably colder), who knows what else you might get out of it? ;-) If you have even a slight amount of game, you will find yourself using it to your business advantage as soon as a female of any age answers the door.

My mentor explained a very simple concept to me, which was slightly at odds with the way I was thinking. When beginning, it's better to make a £50 profit (even on a £200 job) four times, rather than a £200 profit once on a £400 job. The end money is the same, and you've had a lot more hassle organising things. Beforehand I thought 'busy fools'. But it's not just the profit. It's the amount of customers that you make a personal connection with, who recommend you to their friends, and it snowballs from there.

Hope this helps.

Post: #18

Freelance work - at the moment mostly setting up/managing wordpress sites, web admin and copywriting.

Freelance > job for those with startups that require a large time investment (which is most of them). You generally get paid more than doing the same task on a salaried job and you're not obliged to work 40+ hours/week so you have way more time and flexibility.

This works best for people with business/IT skills, but if you don't have any skills that lend themselves easily to freelancing then I quite like YMG's idea for learning a location independent skill such as programming, web design or SEO (http://www.codeacademy.com, http://www.udemy.com, http://www.moz.com for resources). This would allow you to work closely with other entrepreneurs on their ventures and learn from them (especially useful if you don't know what business to create), as well as enabling you to geoarbitrage in cheap places around the world like SE Asia whilst you create your business.

Of course this is more suited to startups that require time more than cash - those who need an investment for their business might be better off simply working their 9-5 to build their fund (or seek venture capital if you need big money).

As far as book recommendations go, The Millionaire Fastlane by MJ DeMarco is a solid overview of the entrepreneurial mindset and strategy. Also your real focus should be getting your Minimum Viable Product up and running ASAP (see The Lean Startup by Eric Ries).

Post: #19

Here in Korea, the vast majority of expat business owners run bars, private after school academies, or restaurants. Theyre usually quite friendly and always willing to share their stories.

The vast majority started out as teachers here, working a 6-8 hour/day job. The advantage to teaching in Korea is that you can save around 1K USD a month, which provided the startup capital for a lot of these guys.

The second big factor I see is that many of them start their businesses with the help of a girlfriend or wife. I found many expats here willing to admit how immensely helpful this was for a variety of reasons. As all of the entrepreneurs (failed or successful) here know, going at it alone is not the easiest thing to do.

So while these expats are setting up their businesses, they continue to teach until their business reaches profitability. Then, they have the flexibility to choose from a lot of different routes. Some hire a GM to take care of the place while they look to expand. Others continue to teach on the side for extra income. Most just settle into their new businesses because a relatively stress-free lifestyle business was what they were going for all along. It depends on the person.

But what I remember thinking was that in almost every case, the expats made their decisions very conservatively and incrementally. Nobody quit the jobs that paid them a reliable salary until their side business took off. They reinvested profits back into the business. They got help from their girlfriends or even their gf's parents sometimes. Their business plans went with the most conservative numbers, which they knew they would beat. They did all the extra work themselves until they could afford to hire help.

Then youve got the cats here who became millionaires, but these guys are a totally different story. Mostly Koreans or Korean Americans with buttloads of connections here or from rich backgrounds or IVY league alumni making copycats of successful startups from the US and then selling them after a few years.

What I took away from observing all of this is that true entrepreneurs have partners. Connections matter. And you dont quit your dayjob until you have step 2 lined up.

Post: #20

On a serious note, read this book http://www.amazon.com/The-Millionaire-Fa...0984358102

On a messing with ya note, trade crypto currencies.

The key to hustling, aside from energy and ambition, is useable knowledge that gives you an edge. Buy and sell shit you have deep knowledge about (comics, antiques whatever - but things where you know true values and can make the spreads while buying and selling.)

What do you know really well? Or what do you have deep interest learning about?

Post: #21

In my case, I had a job and saved a lot of money from it. Then when I was ready to go out on my own, I quit the job, sold a lot of my things (car, etc), and used that money to move to another country where my cost of living was much cheaper. Then I lived cheaply -- didn't eat out, controlled my expenses, etc. I worked on my business full-time (and as any business owner will tell you, that's not 9-5 by any means) and then eventually started bringing in revenue.

Think of it this way: If you had $10k, how long could you live off that in City X vs City Y? If one option lets you live off it for twice as long, that means you have twice as long to make your business a success.

The X vs Y doesn't even need to mean moving abroad. There are lot of cities in the US, particularly in the midwest, where cost of living is pretty low comparably.

Post: #22

(12-03-2013 11:13 PM)pheonix500000 Wrote:  

(12-03-2013 11:10 PM)babelfish669 Wrote:  At the very beginning I was living on a few hundred dollars a month. You should be able to make at least $50,000 a year within 12 months of 100% focus.

Doing what? blog? freelance?

Adsense on low traffic sites & forums. It was kind of like getting a welfare check.

My friends who tried to supplement their business with freelance did very poorly. Instead of being 100% focused on your business, you are 20 or 30% focused. They are still freelancing.

When you divide your attention in half, it doesn't add up to 100%. Instead it might add up to 50 or 60%, if you are good.That is the difference between making high 5 figures rather than high 6.

Work as a freelancer, and your attention is probably divided between:

-Your business
-Client #1
-Client #2
-Trying to win new contracts

Good luck.

Post: #23

(12-08-2013 06:24 AM)Valentine Wrote:  Freelance work - at the moment mostly setting up/managing wordpress sites, web admin and copywriting.

Freelance > job for those with startups that require a large time investment (which is most of them). You generally get paid more than doing the same task on a salaried job and you're not obliged to work 40+ hours/week so you have way more time and flexibility.

This works best for people with business/IT skills, but if you don't have any skills that lend themselves easily to freelancing then I quite like YMG's idea for learning a location independent skill such as programming, web design or SEO (http://www.codeacademy.com, http://www.udemy.com, http://www.moz.com for resources). This would allow you to work closely with other entrepreneurs on their ventures and learn from them (especially useful if you don't know what business to create), as well as enabling you to geoarbitrage in cheap places around the world like SE Asia whilst you create your business.

Of course this is more suited to startups that require time more than cash - those who need an investment for their business might be better off simply working their 9-5 to build their fund (or seek venture capital if you need big money).

As far as book recommendations go, The Millionaire Fastlane by MJ DeMarco is a solid overview of the entrepreneurial mindset and strategy. Also your real focus should be getting your Minimum Viable Product up and running ASAP (see The Lean Startup by Eric Ries).

I can't find that post by YMG on acquiring a location independent skill, can you link me to it?

Thanks

Post: #24

(12-09-2013 02:16 PM)pitt Wrote:  

(12-08-2013 06:24 AM)Valentine Wrote:  Freelance work - at the moment mostly setting up/managing wordpress sites, web admin and copywriting.

Freelance > job for those with startups that require a large time investment (which is most of them). You generally get paid more than doing the same task on a salaried job and you're not obliged to work 40+ hours/week so you have way more time and flexibility.

This works best for people with business/IT skills, but if you don't have any skills that lend themselves easily to freelancing then I quite like YMG's idea for learning a location independent skill such as programming, web design or SEO (http://www.codeacademy.com, http://www.udemy.com, http://www.moz.com for resources). This would allow you to work closely with other entrepreneurs on their ventures and learn from them (especially useful if you don't know what business to create), as well as enabling you to geoarbitrage in cheap places around the world like SE Asia whilst you create your business.

Of course this is more suited to startups that require time more than cash - those who need an investment for their business might be better off simply working their 9-5 to build their fund (or seek venture capital if you need big money).

As far as book recommendations go, The Millionaire Fastlane by MJ DeMarco is a solid overview of the entrepreneurial mindset and strategy. Also your real focus should be getting your Minimum Viable Product up and running ASAP (see The Lean Startup by Eric Ries).

I can't find that post by YMG on acquiring a location independent skill, can you link me to it?

Thanks

/thread-25838-...#pid489617

Here's a few other summaries of location independent career paths:
http://markmanson.net/10-best-ways-to-make-money-online
http://fizzle.co/sparkline/64-ways-locat...-living?tt
http://www.makeuseof.com/tag/200-ways-to...ey-online/

I'd highly recommend focusing on the minimum needed to create a business, not another job. Many people learn skills like copywriting, graphic design or programming only to remain looking for clients 10 years down the line. The reality is you don't need to be that skilled to create your MVP.

Also I recommend The $100 Startup by Chris Guillebeau, very simple and to the point for getting your MVP up and running.

Post: #25

Guys, thank you all very much for these excellent responses and recommendations, including the book recommendations. I actually just added 'The Lean Startup' to my library queue last week. I read the 'Fastlane' book a year or two ago, but I wasn't in the right mindset and read it more as "entertainment." I'd really like to reply more in depth to some posts, but something just came up and I want to ask you guys this.

Has anyone ever heard of the Founder Institute? Are they well-known in the entrepreneur community? I applied a few days ago and just got accepted. I was wondering, if I do get in (which I apparently just did, haha), do they expect me to have a couple of tens of thousands of bucks on the side to launch a business?

For the record, for people who don't know them, it's a four-month course for "only" $900 bucks, the catch being that if your company succeeds, they get 3.5% equity for the next ten years; also, if you secure > $50,000 in funding, you give them a one-time payment for $4K or so. They say you do not need an idea, it seems they just want people who have entrepreneurial promise. To that end, they make you take a personality / IQ test, which apparently disqualifies many people, or so I've read. In order to graduate, you must, by the end of the four months, have brought them an approved idea which the coaches green-light and have incorporated.

Anyway, I'm kind of excited that I got accepted, this sounds like a great program for someone like me. But now I'm worried about how much capital I'd be expected to have. I'm just a poor boy (I need no sympathy, because I'm easy come, easy go...) My hope in joining this program (I didn't even think I'd get in) was to associate with other entrepreneurs while launching a real business so I can learn. I was kind of hoping, at the risk of sounding seriously naive, that I could just develop an idea and then shop it for funding without my having to sink any cash into it--because I really do not friggin' have any.