I'm curious as to how those individuals working on a startup full-time are able to support themselves without receiving any compensation. Are you simply a student going to school and this is a non-issue? Or are you working form some sort of financial cushion you saved up from your previous job?
I moved from Los Angeles to Kuala Lumpur and I can attest that it's quite an enormous saving on rent and food. I must preemptively qualify Malaysia as a fabulous ___location for a web start-up as it scores extremely well on my PEST analysis and other essential factors. Also being physically away from my "rock and roll all night and party everyday" friends indeed dramatically cut down on my socializing budget. It all rosy here, up until now that is.
"Free rent (thanks sis!) and a small savings since I was laid off. I keep a vestigial social life and cook at home. This has been since January."
Thats plain crazy, wont believe if i tell you that , i have a sis, and have got small savings, was laid off sometime back, and i keep a vestigial social life..
I was able to sign up my existing contracting clients to my new product in a sort of paid private beta. That covers the business expenses 4-5 times over while I finish the product and can really push with sales, and other than that I live at home with the parents - gives me a nice runway, and I'll probably give my parents some profit share / equity for their support :)
I am working on a startup part time while a (grad) student, and I pay the bills by being a TA (which refunds tuition and gives me just a little more than I need for living expenses). Keeps me pretty busy. :) Don't think I could do it full time (i.e. drop the TA job) though.
I don't think it's accurate to assume that all start ups have absolutely no money--my fulltime job came about due to part time work with friends after hours--when they raised just enough cash to pay salaries I came aboard. I'd still consider it a start up.
But I'd point out that working on a startup full-time does not preclude receiving cash compensation. Aside from the founders, the current employees of my start-up are earning competitive cash compensation.
Yes, but it's not just living expenses -- I was thinking along the lines of can your parents float you $25K for startup costs such as equipment and working capital? How about $100K? Is it a big deal if they don't get it back, ie is this their retirement, or is just kind of a bummer? And so forth...
The startup I was thinking of needed the money in order to establish business relationships -- the business they are in requires quite a bit of working capital. The founder's parents basically gave him $150K and they aren't so rich that they wouldn't notice, but if he had lost the money, it wouldn't have been a particularly big deal. (Sorry, I'm not trying to play coy, so if anybody is interested, email me and I'm happy to give names, but I just don't want this account to be googleable.)
Edit since I can't reply and want to go to sleep -- yes, this makes your parents angels, but getting angel investment suffers from who you know -- how many people grow up knowing angels? So your parents offer three major advantages:
1 - you know them already
2 - you know them already
3 - they are probably more willing to take a chance on you... and you know them already
I think when you get into the "parents give you $150k" range, the parents in question fall more into the category of angel investors than anything else.
Can I add another route?
5 Using an existing profitable business to incubate a startup within.
The consulting business I run funds the development of a number of skunkworks projects, and it looks like two of them will see light in their own right.
1b could be 'have a decently paid wife/husband/partner' - that approach is working for me, so far, tho I am still doing some freelance dev to keep things relativley fair
This works for me - barely. While the finances are fine, the stress level at home can get out of hand. Having a well-paid spouse who is willing to accept the uncertainty inherent in early-stage, pre-funding startups is MUCH more difficult to arrange than just the well-paid part.
They don't need to be soooo rich (you don't need millions to start), if they understand what you do, they'll support you.
Also living within your family will reduce costs: rent + fooding + other things.
I'm doing it from home and starting slowly but surely
I'm currently trying to get an indy games company off the ground but I can't take the risk of going full time at the moment. Work 8 hours as a programmer during the day then do about 5 hours at night on my game.
Been going for about 5 months now, probly another 4 to go.
Same here, except that I've been doing the off hours thing for a couple of years, but switch project every few months. That's not a good way to get anything done :-)
Also, 5 hours? How do you do that? I have way less than 5 hours if I subtract (sleep, groceries, cooking, housekeeping, work and commute) from 24 hours.
I get home at about 6. Eat Tea by about 6:45, then work for about 5 hours. I usually go to bed about 12:30 wake up at 8:30, rinse repeat. My girlfriend does the shopping and most of the cooking. On weekends I would probably do about 8 hours on my game, as well as housework, drinking etc.
You might be giving up on projects too soon, or you're not thinking hard about the market potential and income options.
It's hard to "start" a company, that's why it's better to keep all your resources and retool or specialize on a certain direction as the market dictates.
Or you might just be calling the wrong thing a "startup". Software developers might be prone to this error, thinking of any application project as a business (note the multitude of "iphone startups")
I honestly have very little to do with software development in any way. I just come here because the things people tell me to read on this site are very interesting and informative.
I'm full-time on my startup. I'm in my second (or third?) sprinting phase where I'm spending most of my waking hours working. I can't say this is healthy but I'm having fun in some sick way. http://www.afterthedeadline.com is me.
I work 16 hours a day, and the other 8 I am on hold on the phone or waiting for bureaucrats and various types of desk-jockeys in several timezones to wake up and answer my emails or pick the phone.
I've been an independent consultant for about a year and a half now. I've been working on my "startup" idea part time for a couple of months. My day job is in IT, but has little
to do with my startup.
My question is; how many people of the people working on startups are of the type that will "change the world", vs. simply build useful and scalable products (e.g. enterprise software or indie games)?
Oh, and I hope this isn't too forward, but if anybody out there would really like to be working on a startup and you're good at rails / flash / web dev, hit up me or us.
More bluntly, how do you pay for rent and food?