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Founder vs Employee

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This is an everlasting question for developers, I believe most of us here already confront with it more than once in our lives.
This is a constant debate whether I should go my own way as a startup founder, freelancer or any other self-employed path or on the contrary join an existing company as an employee.

I chose the self-employed path as a co-founder of startup, as this is what really motivates me, working for my own cause. On the other hand, most of my friends are salaried and they love it as they have a clear separation between work and life.

I wonder what is your take?

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Other than some projects which never got off the ground, I've only been an employee, and at this point it's what I need for various reasons. I would like to start a business at some point.

The word "startup" has certain connotations that aren't necessarily what I'd want to found. I'd like to run a bootstrapped product business which charged money for some product (not ad impressions), and where I could directly benefit from any increased profits or productivity (either by taking home more money or working less).

 

Bootstrap has become very popular lately, I love it. Very hard to make it without funding though

 

Theoretically the day job is your funding. Or some people get their customers to fund development, either with preorders or just getting a big customer to give you money. I'm not sure how the latter works, but apparently Binomial got Netflix to pay for the development of their texture compression middleware.

You need a very nice order or personal funding for HR 😋

HR (Human Resources?) doesn't need to be involved. The idea of bootstrapping is to have some existing income stream and use that to pay the bills until the product can do that on its own. This could be having a day job and working on the product on nights and weekends, or it could be doing freelancing and taking a few weeks off to develop the product, like 37signals did when they created Basecamp.

You can't scale a product to a full business without hiring more people to help you grow your business. It takes a lot of time to have a revenue high enough to hire. On the contrary funding can boost your business and reduce the time, of course it has its cost

 

My goal is to create a startup so I understand what it feels like to work on an idea or cause. According to me to be a successful in your self-employment path you have to understand how the industry works. That's the reason why I am currently working as an employee to gather experience on tackling issues understanding nuances of the industry. This helps me not only to improve myself but also learn how to behave as a leader. If you reach a leader position after working as an employee you can set your guidelines on being a leader and you will understand how to and not to utilise your team.

Coming back to your point that separation between work and life. I believe you can have that regardless of whether you are an employee or self-employed. One benefit of being self-employed is that you can pick what interests you and do it thus increasing your passion as well as motivation.

And being a leader means you are your own employee you must treat yourself the way you treat other employees in your team. This gains not only respect from your employees but also breaks the barrier for employees to talk to you. Because many times I have seen employees afraid to talk to their bosses or leads as they haven't a clue on how they would react.

I believe in working on idea with people who share similar passion and motivation to make things better for other people. A thought that initiated the fire in me to create a company is "Create products not for money but for people. Think how this product no matter how small improves people's lives".

 

Well written my friend!
Seems like you are very focused on your goals, keep it up and you will be there for sure.
Regarding the work life balance it is easier say than done. Your mind whether you like or not is always working, thinking about what's next, worrying, etc. Your team needs you and it might happen at time when you least expect.

 

Thanks Ido. I didn't think about work life balance from that perspective. Hoping to connect with you later if I need guidance.

 

I've worked exclusively in startups, good or bad, and refused early on to be a co-founder. I realized that the takes on the founders as people, affecting their lives in many ways that I valued too much to let go, like family and free time. Having less professional responsibilities allowed me to have more of the personal ones I guess.

 
 

Longterm, I want to do more entrepreneurial things. Short term, I need to create a safety net in case said entrepreneurial thing fails. I think this is a totally reasonable way to approach it.

You don't want to be in your fifties without a dime to your name. Can you imagine how depressing that would be, having to subordinate yourself to some young person because you don't have enough money to escape? Or worse, not even being lucky enough to get that opportunity since the second people see grey hairs, they run.

I'm of the view that if you can't build something with no funding or marketing budget, 100% on your own, you probably don't deserve to be in the startup space. Before you even consider quitting something stable that can give you enough money to retire in as little as ten years, you should make sure you've built a product with a stable revenue stream that's been chugging along for at least 6 months.

I have a few products like that. They've consistently given me a yearly return of about $1500. It's not much, but it's 100% passive. Retirement money

Your product needs to grow organically. It needs people to discover it without some hyper aggressive marketing campaign. You should be able to work your day job while it grows, knowing you can pursue it full time once it hits a number that can sustain you as you work on it.

Yes, it's great to do what fulfills you. Yes, the work world is filled with all kinds of Dilbertesque nonsense. But you have to think of your future self too. There's no sense putting future you in a bind just to pursue a passion that might not pan out. Pursue the passion on weekends or in between projects, then go all-in when it can sustain you.

 

You mostly talk about building a side project during your day to day job as a mean to provide "passive income". In my experience in order to build a successful product, the time comes when you have to make a decision to quit your job and start investing whatever you got in it. Even a side project can scale to this very moment that I am talking about. I don't agree that you need to have the possibility to build it without funding or without marketing. I do agree that funding and marketing need to come in good timing but it is very hard to succeed without them, it barely happens.
I can totally relate to the safety net, though.

 

Right, the question is always "when to jump?" I'm saying err on the conservative side. Make sure you have a predictable way to generate a greater return by investing more money into marketing or development, otherwise you've just quit a stable and lucrative job to throw darts at a board and pray that it'll work.

A thing that can grow organically is the sort of thing that will grow even more so once you start pumping money into it. Hence I offer the challenge to try and build something with no marketing budget. It forces you to focus on the product, not on spending your money or someone else's.

From a mental health perspective, it's much better work out the kinks while you've got money coming in than to try and do it while you're worried about food and housing and health insurance.

Now I can totally relate with your second paragraph. I am talking with experience of doing the opposite in the past.

 

My personal opinion is that I always wanted to go the startup route, many of my time and resources have been spent learning the necessary stuff to be a good founder. At the moment I'm kinda apart from the tech industry so I'm planning to join a company and have a feel for what's currently out there, in 6 months (or maybe less) I'll just take the knowledge and savings earned and move on with my entrepreneurial journey.

 

I don't know it's so black and white. You can be an early employee at a startup taking on significant risk. Finding a company that fits your cause can be difficult, but not impossible.

I say find what makes you happy. Find people you love to work with. The rest will take care of itself. Titles aren't important.

 

It isn't about the title. I am not trying to advocate being a founder, but being an early employee is not the same.
I am trying to develop a discussion to understand why people choose one or the other. Actually I learned a lot from the answers so far.

 

I've been an employee for a company for nearly 7 years with the intent of bootstrapping the company I want to build. While that might seem like a long time, it has helped me grow my own network, refine my ideas and get an understanding of an industry that I wouldn't have otherwise had.

This might sound like a bad thing but I see my company being a major part of my life - I want to spend a lot of time on it. While I still want to watch movies and see friends, I really don't mind the idea of spending the vast majority of my time working on something I love.

It probably is a little naive to think that way and maybe my view will change in time but for now, I'm looking forward to the future of growing my mini empire 😀

 
 

I can totally relate to what you're saying and I'm sort of transitioning from one to the other. A lot of people go through this and it isn't an easy choice to make. One one hand you want to follow your passion and like you said work for your own cause. But that does cause instability in your routine.

I feel it's worth working on what you are really passionate about. Having said that, being an employee in a company would provide a solid foundation for doing this. My take is to start with working as an employee (under good mentorship, irrespective of the company size) and then gradually transition to becoming self-employed or cofounding a company. This will help in two ways. Firstly, it makes sure that your financials and work-life balance don't go south all at once. Secondly, it will be a solid test to find out how passionate you are about working for your own cause since you'll need to put in those extra hours without being rewarded in the near future. Sometimes we think we are more passionate about things that we actually are, and the earlier you find out the better.

Once you cross that hurdle and transition successfully, it is your passion that will prevail. It's the ultimate motivator that will help you kick goals and achieve great things. Good on you for choosing self-employment. How it's going so far?

 

I didn't do this transition and sometimes I regret it. But actually things are going pretty well. Thanks for asking :)

 

IMO money decides. Working for a startup is all fun and games until you realize a third of your income isn't actually liquid.

 

This when things become hard and you have to choose your passion or life quality

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Ido Shamun profile image
Co-Founder The Elegant Monkeys, Co-Maker of Daily and a passionate software developer