Leaving your job

Once you feel confident enough, it's time to resign. The big thing everyone will want to know is, why are you resigning? To which the answer is - "I am leaving to pursue an opportunity". Followed by enthusiastically talking about it.

This is basic stuff, but worth saying: you are not leaving because your current workplace is boring, facist, slow, beauracratic, full of morons, or any other reason - even if it's true. The temptation might be strong to fire a parting shot, but you must resist.

There's an old maxim - you shouldn't burn bridges when switching jobs, and it's not without reason. You may need the contacts and references one day. You might even need contracting work from them. So remember this line: "I'm leaving to pursue an opportunity" - and stick to it.

Write a very short resignation letter, go and chat with your boss, and give them the bad news. Beware of them rolling out the red carpet on the way out. You should be prepared for your employer offering you incentives to stay, and you should have already rejected them in your head before talking to your boss.

Getting Started

You quit! Yay! Now it's time to put the structure in place for your new venture.

Finally...

If there's one thing you should take away from this series, it's that becoming an entrepreneur involves a lot of learning.

There's no magic involved, and anyone can do it. It just involves some soul-searching, decision making, planning and vision. If you're prepared to learn, and want to pursue an idea, you'll find the process exciting and stimulating.

Lastly: I hope I've mapped out one way of doing it, but it's not the only way for sure. We made a lot of mistakes along the way, and still have managed to do alright. You might have ideas about how you'll do things better - in fact I hope that you do!

Final-lastly: Good luck on your journey! Feel free to leave a comment or get in touch if you want - I'm happy to swap stories or answer any questions.

Useful Resources

• Market Validation - some ideas on what it's for and how you do it.
• More on continuous deployment

Our Idea

I'll explain how I came up with our idea. Not because you'll be able to use it [1], but because an example of how viable, sensible ideas worth quitting your job for come about might be useful.

I love football, and play it any time I can. I've played at a lot of places around the Wellington region - four or five completely separate organisations, in fact. Because I'm a techie type of guy, I like looking at the results online and seeing the draw for next week. All the places I've played at provide this - but their systems are universally crap.

I tried fixing this a couple of years ago, just for me, by making an over-normalised postgres database modelling everything about competitions, and hacking together scripts to scrape the websites and enter the data, so I could do something nicer with them. For example, here's the Capital Football Wellington Mens results page (Naenae Capital 4 represent!). I'm pretty sure that list is pasted into frontpage from somewhere, probably a text file export from some other system. It's awful. Tables should be better than this!

I managed to build something small, but it was a spare time project as I was busy with Mahara. Like most spare time projects, I soon gave up on it.

Fast forward a couple of years, and I'm casting around for ideas for a startup. It took me a while to realise, but soon enough I joined the dots:

• All these places I play at.. they're all still using crappy systems, right?
• What's the bet that more places are doing exactly the same thing?
• I wonder if there's another startup doing a system like this?
• Maybe I should go and talk to someone to see why they're doing it the way they are?

So Martyn and I went and talked to one of these organisations, and on the basis of that one interview alone, we decided there was a big hole here waiting to be filled!

Wasn't that a little naive, Nigel? Yes!

In fact, it's worse - I even talked to another organisation who will pretty much never need our product, even if we work on it for years - because they write a competing piece of software! [2] And we still decided it was a good idea!

In hindsight, that wasn't very smart. But we've been lucky - since getting started, we've interviewed a lot more of these organisations, and our suspicions were correct. If I was doing this all over again, I definitely would have done more to find out whether the idea was a good one - and I strongly suggest you do too.

How to find your plan

Naturally, I can't give you any ideas and tell you they'd be winners. That's up for you to find out. But I can offer some general advice:

• Play to your strengths
• Find a problem that people will pay you to solve
• Find a co-founder

Play to your strengths

There is no point you deciding one day that you're going to build an enterprise document management system, if you've never been involved with enterprise or document management systems. Not even if the market is $400B in size.

If you think that a market is $400B in size, and if you could just capture 0.0001% of it you would be rich, then the long range slapping device I'm inventing will be visiting you shortly. You, the humble virgin entrepreneur, can't build business ideas on macro-economics like that. It's nothing more than wishful thinking, and you'll be pounded by the well-established competition unless you're a total genius.

Instead, you should work from the micro-level, by picking an problem you can solve for people around you.

The experience you already have is a great source for new ideas. In our case, constantly playing football for several years, along with having jobs as webapp developers, made our idea quite logical.

You don't have to pick from past experience, of course. When you're trying to create a new market, past experience might not be relevant. But it probably helps that you're an accountant when you're trying to build an accounting system, if you know what I mean.

Also, a startup is not a good time to learn a new technology. If you've always wanted to learn python, learn it before you get started, so at least you know what you're getting yourself into. You need all the help you can get, and hamstringing yourself with a technology you don't understand is a silly move.

Find a problem people will pay for

You might want to change the world. I totally approve. But if you can't make anyone pay for it, you're going to run out of money and have to go back to that boring job.

The initial idea for your startup can be founded in idealism. In fact, you actually need a vision for what you think your product will become, because it's that vision that will help sell the idea to your friends and family, co-founder(s) and investors. But you'll need to pick a very small piece of the idea to start with - the piece that will make you money.

How do you know if someone will pay for something? Here's a clue: people pay to take pain away. It's not the only thing they'll pay for, but it's a proven fact.

So how do you find out if people will pay for your product? You have to go and ask them!

That might sound tough, to an IT geek. Suck it up. At some point, you're going to have to actually meet with a real person and chat with them about a real problem. You will have to buy them coffee. You will have to listen, and write down what they say. And you'll have to analyse what they say very carefully, and avoid confirmation bias. You will have to do this many times, and you may not like what you hear.

Thankfully, there are many great resources on the internet for this. You need to learn about Customer Development and the Lean Startup concept. These topics are discussed to death by people much smarter than I, so I shall merely point you to the two people primarily responsible for these ideas, and you can do the rest (see the links at the end).

Find a co-founder

I already talked a bit about this yesterday. Today, it's in the context of finding an idea. Co-founders make it much easier to find a good idea in several ways:

• They have their own ideas, based on their life experiences. No doubt most won't be interesting to you, but some will be.
• The power of two is great when coming up with ideas. You can hear, remix and re-pitch one another's ideas, combining parts from multiple ideas.
• They're a good sounding board. If they're willing to start a company with you, they'll have much better feedback about whether an idea is any good, as opposed to someone less involved. They're a good first acid test too - if you can't sell them on your idea, how do you think you'll be able to sell anyone else on it?

How do you know you've found a good idea?

Given my experience, it's hard to say! Talking to a couple of potential customers combined with intuition was enough for me to make the leap. Right now, part of what I'm doing is making sure it's a good idea by talking to many more customers.

If I could do it again, I would have talked to more customers first - at least four - and made sure I asked them not only what their problems were, but why they were problems. By asking why enough, you can find the root cause of the pain, and if everyone is giving you similar problems and root causes, you'll know you're on to something.

Useful Resources

• Steve Blank - if you can, read his book "The four steps to the epiphany"
• Eric Ries - who first coined the term Lean Startup
• The Entrepreneur's guide to customer development is an abbreviated version of Steve Blank's book, and well worth the read if you can get it.

Advisors

Advisors come in all shapes and forms. All you need to begin with is one person who's got some experience in running a business and has a clue about what you're doing.

Believe me, they're worth their weight in gold. Our main advisor gave us a grounding in business structure, referred us to a good accountant, discusses software design with us and knows the answers to silly questions like how GST works. Advisors help you move forward whenever you come across something that might paralyse your progress - and when you have limited money, that clock is ticking.

Eventually, you'll build a small collection of advisors for various aspects of your business, and in time they'll turn into an advisory board. But for now, try to find one person who has "been around the block" with businesses, whom you trust.

Contractors

Your startup will probably need a contractor or two, to cover the skills that you and your co-founder(s) need, but don't have.

In my case, and I'm sure this is true of many IT geeks, I'm hopeless at graphic design. But because we knew an awesome graphic designer, we were able to build a site that looks amazing. The cost is in precious capital, but given the alternative of slaving for hours in the gimp to produce cat vomit, it's quite a reasonable tradeoff.

Identify what skills you'll need in the early days of your startup, and find contractors you trust to plug any gaps. If possible, choose from contractors you've had dealings with before. If you have worked with them previously and know their work is good, you're set.

Remember that you'll be strapped for time and money in the early days, so a contractor you don't yet trust will be an additional burden that you should avoid if possible.

A Co-founder

You almost certainly need a co-founder. They're there to boost your morale, help with the business, provide complementary skills and more. You need to pick one carefully. There's reams of advice out there about this.

I won't go into much detail about how to pick a co-founder, as I've only done it once before. I can only strongly suggest that you take this task seriously. In my case, I'm lucky that the choice was easy - Martyn Smith is one of the very few truly smart developers I know, shares similar opinions to me about work and I've played indoor football and futsal with him for years.

Found a Company

I would consider this mandatory if you get a co-founder involved. And since I think you should get a co-founder, then you may as well found a company too.

Here's the deal. Founding a company sounds like a big event - like buying a house - but it's not. In New Zealand, you will have to spend some money (about $160) and a couple of hours flailing wildly on the companies website - but that's about it to start with. After that, there's the occasional amount of paperwork to do, but if you have no revenue, a GST return can be done online and takes two minutes to fill in, once every two months.

You might be thinking that it's a bit of work and a bit of money, so why do it? Two words: Intellectual Property. Assign the rights to any code you're writing to the company, and force anyone working on the code to do so as well.

Why? Because the last thing you need when your company is taking off is a lawsuit from someone who helped you in the early days but gave up on the idea. You'll say they barely helped. They'll say you stole their idea. The courts will give them millions. Just ask Zuck.

Having all the IP owned by one entity makes future investors happier, as they'll know there is no issue with code ownership.

If you're not sure what you want your startup to be called yet, then incorporate a consultancy and assign the code to it. You can do a one-time copyright assignment to a new company founded for your startup later. That's what we did.

Finally - talk to an accountant before you found the company. They'll tell you how to structure it in a way that makes sense, and you'll need to know what structure you want before diving into the registration process.

General Principles

You'll need the resources I've listed, but depending on your situation, you might need others. It's up to you to identify what you need. Get someone to advise you and ask them what they think you're missing. Talk to family and friends and see what they say as well. Even if they have no idea, the act of talking to them may give you some insight. And of course, never stop scouring the web for advice as part of your ongoing education.

Useful Resources

• Copyblogger is a popular blog that discusses all aspects of copywriting. This is another skill you may not have, and may not realise you need.
• Venture Hacks is a firehose of useful advice for startups - for example, check out these articles on advisors.

Next: The Plan