Bootstrapping by freelancing

Sorry, not sure how well this applies to Mexico but...

I did the freelance/startup combination for about five years. Its ok once if you can pull it off, but I do not recommend repeating it. I have a lot of friends that do this, and on the whole I think it is a vicious cycle. I don't mean you shouldn't freelance to fund a company. If that seems the way forward, then do it - once. But you shouldn't do this repeatedly. Its an easy cycle to get into. Instead, you should work at startups in between founding startups.

I find that you can get into this pattern:

1) Focus on billing in boring contract work to get spare cycles to work on startup. Learn new skills to apply in new startup on your own time. 2) Startup makes progress, focus on startup, startup doesn't make it (most don't), savings run out. 3) Cling to hope. Debt. 4) Repeat.

Most people I've known do not eject efficiently in stage 3, and bear excessive credit card debt, etc. Whereas if you get a job at a startup, you can enter this pattern, and even if all these companies tank, you're better off:

1) Work a job at a startup where you do very interesting work, get paid to refine your skills, gain highly relevant experience. 2) Repeat 1, increasing in job coolness/responsibility. Save money. 3) Now that you've built a reputation and network of excellence by working at startups, start a company that has a better chance of succeeding using your experience, cutting edge skills, network of potential co-founders and relationships with investors, potential employees and customers.

I was in the first pattern, now I'm going for the second. Looking across many successful founders, this seems to be the most frequent way to arrive at a good outcome. I value the experience from the first pattern, but my life is so much better now that I'm in the second. I wish I'd entered it earlier. Note: I had to move to silicon valley to enter the second pattern.

You might do well with your first company part timing it, but I find that struggling and part timing it is just a less effective way to learn to build companies than participating in a later stage company. Other than the entrepreneurial drive itself, I think that building companies is actually something you learn, and that its something best learned by doing. You can get early stage experience just starting something. You only get that later stage experience in your own company if it makes it that far - but you can get it by joining a startup at any time.

I think a lot of people, especially those outside of silicon valley, miss this completely. We tend to focus on the icons of silicon valley - pairs of young people that hit it big the first time out. But most successful companies actually come from experienced engineers/entrepreneurs that got on the job training at other startups. People work together, then they start companies together. Ever since the Fairchild traitorous 8. http://en.wikipedia.org/wiki/Traitorous_Eight ↗

Hey, good luck.

I also bootstrapped my company through contracting work, and as of this year, I'm ramen profitable. I'm not quite opportunity cost profitable, but I'm moving in that direction at a fairly high velocity.

Some of my lessons:

1. I make a lot of money as a contractor, compared to what people I know who can do many of the tasks required for my company.

(cultivate relationships with people who are poor but skilled!)

Until very recently, my personal primary focus was on contracting, and people who worked for me would focus on my company.

2. Avoid debit at (nearly) all cost.

If you have debit, recovering from mistakes is much, much more difficult. buy what you need, when you have the cash. Debit (and a mistake) very nearly killed my company. I essentially ended up ignoring my company for a large part of a year while I worked to pay it off.

It will be hard, but you know? so is getting funded.

In my experience the best way to juggle freelancing and a startup is a to have at least one person who is only doing work on the startup. Additional people can split their time between the startup and freelancing but you need one person who is 100% dedicated to the startup. That of course means you need 2 or more people involved.

Enforce this to the point where the person/people doing freelance work don't discuss it while the dedicated startup person is in the room.

This ensures the startup is always moving ahead no matter how much freelance work is happening and that you have at least one person whose headspace isn't cluttered with freelance billing, deadlines etc. Even just knowing about a freelance project that is behind schedule or about a difficult client is a drain on the startup so keep it contained.

Freelancing while trying to run a start up can be extremely tricky, I know, I've done it. I often found myself burnt out from client work (the work I didn't really want to do) which impacted the quality and quantity of the work that I did for the start-up (the work I did really want to do).

I'd say, if you must go down this route, really try to limit the work you do for others, take as little work as possible. Next, try and set times that you work on client projects, and times that you work on the start-up. Stick to the schedule you set up (put the start-up work in your most productive time slots). If you can't manage that, work like a demon on the client project exclusively, bang it out, then get back to the start-up asap.

What I love about this story is that it demonstrates the grit and determination of a guy to get his dream alive despite having no financial cushion to do it from.

I actually get sick and tired of hearing the mantras of "don't take funding, its best to bootstrap" from people who have so much money it doesn't even enter their thoughts that people like this guy are scraping just to get by.

I think there are issues with using freelance work to cover a startup - but if it is the only option you got then you take it.

I certainly bet he'll worker harder then the many founders I have known who's company was essentially floated from Daddy's money or the trust fund, etc.