Startups are hard. Anyone who tells you any different has probably never tried to build one. I’ve spent a good part of my working life immersed in startups, attempting to do in five years what would normally take twenty.
In 2010 I raised my first round of VC. I also bought my first house and welcomed into the world our second child. What rational person would take on a mortgage, have a child and raise a venture round in the same six months?
I suspect some people are naturally wired for startup life.
Give me unlimited upside and I will happily get into the ring. I’m predisposed to focus on the possibilities of success. What I do has a high potential for failure but I do it anyway.
In my role as the CEO for CyRise, I meet a lot of people in the cyber security space who are wrestling with this conundrum right now. Take on risk and shoot for unlimited upside (startup), or cap your upside and minimise your risk (corporate life)? To answer that question you need to understand two things.
- How startups typically get built
- What is the downside if everything goes pear shaped?
How Startups Get Built
A common question new founders ponder is how to pay the bills while working on a startup. If a startup takes full time commitment and a bunch of time before the money really starts to flow, how do founders survive without getting paid?
The secret is they don’t.
Everyone needs to get paid eventually, and there are a number of ways that people solve this problem.
- Run a consulting business at the same time as building out a product business. I’ve tried this and can confirm that Paul Graham is right. It’s a hard way to build a successful startup.
- Earn revenue from day one, to the point where you can pay yourself a living wage straight away. This one is hard and unrealistic, so don’t depend on this working for you.
- Raise a round of fundraising very quickly (friends and family, angels or early stage venture capital). Depending on you and your team this may be a viable option for you. Assume it won’t happen though and make sure you have a backup plan.
- Live off your savings. If you have earned enough in the past to do this for a few years then good for you! For most people though this isn’t an option for very long.
- Extend your runway with the occasional contracting job. This last one is super common and is how most startups I know in Australia get built. Get your startup going and then when funds start to deplete, take a short term but high paying contract elsewhere. This is how the Culture Amp founders navigated their early years, and they have turned into one of Melbourne’s fastest growing enterprise startups.
For a founder with deep technical skills in security, finding a well paid short-term role in the current market should be reasonably trivial. It means you can self-fund your startup almost indefinitely if you are willing to go from contract to contract.
So if you can fund your expenses as you search for product to market fit, what about downside protection? If your startup doesn’t work and it all goes belly up, where does that leave you?
Downside Protection
As an individual I am hard wired to focus on the upside so I rarely gave the downside a lot of thought. I always knew I could go and get a job if I really had to.
For a security professional, getting another job is about as bad as your downside gets. If it doesn’t work out, you wind up the company and in a few weeks time you are working for a corporate on a six figure wage.
How is that any different to what you are doing now?
You get a shot at building a globally impactful business, and the worst thing that can happen is that you might be back working for someone else if it doesn’t work out? Sounds like a reasonable deal to me.
Get In The Arena
If you never take the leap, you will never discover whether you have what it takes to be utterly brilliant.
Teddy Roosevelt said it best.
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
CyRise is here to help you go faster and further in that arena than you could possibly hope to go on your own, but you have to take the leap. You have to commit.
Applications are open for 2021 cohort. Apply online or book a meeting with us to discuss your application.
Now is the time.
