Deliveroo founder Will Shu was interviewed by CityAM and gave a piece of advice that is close to my heart:
Unlike many higher flyers turned entrepreneurs, Shu doesn’t advocate seeing your startup as a Saturday project – if you’ve got an idea, you need to go for it. “Guys from finance are taught to hedge themselves – ‘I’ll work at Goldman, do my startup on the weekend or advise a couple of good ones and see if I can get in on that’ – but it’s important to be irrational, actually. Unless you give it 100 per cent, it’s very hard to succeed.
This advice mirrors what we’ve seen over and over again. Some people do manage to really get their startups moving without giving up their day job, but they are definitely the exceptions. Much more common is that founders find they can only develop their idea a small way without diving in full time. That was the case with Luke McCormick, the founder of Edge Retreats who we backed at the beginning of last year, was the case with Ben Furber of The Gifting Co who we backed in September last year, and is the case with the founder of what I hope will be our next investment (we’ve signed terms and are in exclusivity now, so I can’t reveal who it is).
Luke started Edge Retreats over a year before we invested. He did the evenings and weekends thing, and got a friend to code his first site, also in his spare time. He got his first few customers during that period but it wasn’t until he left his job at Secret Escapes that the business took off. It was at the same moment that we invested and our team became his team so there were multiple factors at play, but Luke’s full time commitment was the key that unlocked our investment and therefore everything else. Twelve months on from there he closed his next round of investment and is properly off to the races.
Conversely, we’ve been talking with one founder who has been doing the evenings and weekends thing, used his bonus money to get an agency to build the first version of his site and start transacting, but he won’t leave his job and is struggling to raise funds to keep the business growing. There are lots of other people in this situation who struggle to get their business past first base, mostly because potential investors and employees don’t want to follow founders who aren’t sure enough of their business to commit full time. These companies also have two related problems; progress is slow because the founder is only part time on the project and building great product with outsourced development is very hard.
So Will is right, it’s important to take the leap of faith and give 100%. Otherwise it’s very hard to succeed.
UPDATE: A couple of you have pointed out that it can work to do the research and analysis piece of starting a company in evenings and weekends, including building prototypes and first product, and that it’s only when you start ramping up that it’s important to fully commit. I agree and wasn’t trying to say anything different. That’s what Luke did.