Reply to: c. £ 150k vs plan B

[churchillsnip]

I'd hate to get all kumbaya, though it surely depends on what you want to get out of this short, short life.

If you're happy doing what you're doing, happy with your lifestyle, family is happy etc, and you're experience a 'fear of missing out' then I'd be wary of moving onto the project.

If you're passionate about the project, working on your own company, or doing something different, then might be worth pursuing.

But unless you know what you really want, how can you answer the question?


FWIW, I work on my own projects on the side of consulting. I exclusively take remote contracts, and generally contract for 2-3 months, then taking 2-3 months off to work on the project full time. Lets me get some releases out before moving on to keep the warchest topped up.

Caveat: I've been contracting for less than a year, and my SAAS doesn't support us yet - though early days.

[goldan]

Rationalize your initial enthusiasm

I've known this guy since I worked for him as an office junior back in the early 80's and again in 2000 (but not as an office junior then!) so I trust him implicitly. The idea doesn't really require much funding, just effort on both sides. He's interested because he's not the kind of person to retire and he has vast knowledge in the industry. The idea is mine but it takes more than just development skills to get it to market. If anybody can do that, it's this guy. I have a meeting with him in a few weeks time so will thrash something out then. There's another chap/ex-colleague who would also be useful on the project but he's not available for another year. I'm thinking I may approach this as you suggested - working on it alongside my contracting career for the first year and have a clearer picture of likelihood of success then.

Engage carefully, especially if it's your first time. I'm just getting out of a deal built on top of a similar 20+ years old "friendship", and it was not my first. Some key learnings for a start-up virgin:
- take your time to ink terms of cooperation before you devote your time on regular basis or give up your comfy life; it's about partners coming to critical terms rather burning fuel on lawyers at early stage and you can be surprised how difficult this can be for each of the parties to spit out all expectations;
- consider what can go rock bottom wrong, e.g. your partner turns out to be bankrupt hoax (regardless how large his house is), you've got to urgently withdraw due to health condition, your accountant or lawyer dies;
- have a solid plan on how you are ramping up in the first 1-2 years in terms of who gets things done and who pays for them; are you both ready to live of dreams for 1-2-3-4 years before the business becomes a real income?
- go to casino every day for a week risking double your daily rate (1.5k a day, right?) - if you can still sleep after the week then don't look back, ENJOY THE RIDE and keep CUK posted.

[lukemg]

Would be a shame not to give this a go IF it's got legs and doesn't mean you investing tons, leaving your retirement in tatters.

With no kids I would be sorely tempted to run this alongside a contract. On most of the contracts I have had, I could easily have run another company but YMMV. This reduces the risk and you can always chuck plenty of holidays at it, most places are pretty flexible with weeks off etc, which you can use at pinch points.

Then if it starts to take off, you can bail.

Also, depending on your IT skills, you have every chance of jumping back in a year or 2 later, PM's seem to go on forever etc.

[jamesbrown]

It's to live. Calculations suggest it would last up to 10 years.

A better view of the probability of success would certainly be wise, especially if it's going to take that long!

Isn't this at risk of becoming OBE, or does the 10 years include world domination?.... bwahahahaha

[oliverson]

Age is probably the biggest factor, and I'd certainly be concerned about the dev skills side of things too.

Is selling your house so you have money to live, or is it to put into the business?

It's to live. Calculations suggest it would last up to 10 years.

[jmo21]

Could be as age isn't really on my side. 51 this year. Also, is it possible to pick back up on a contract dev career say at 53 after a couple of years off (in their eyes)?

Age is probably the biggest factor, and I'd certainly be concerned about the dev skills side of things too.

Is selling your house so you have money to live, or is it to put into the business?

[uk contractor]

I've known this guy since I worked for him as an office junior back in the early 80's and again in 2000 (but not as an office junior then!) so I trust him implicitly. The idea doesn't really require much funding, just effort on both sides. He's interested because he's not the kind of person to retire and he has vast knowledge in the industry. The idea is mine but it takes more than just development skills to get it to market. If anybody can do that, it's this guy. I have a meeting with him in a few weeks time so will thrash something out then. There's another chap/ex-colleague who would also be useful on the project but he's not available for another year. I'm thinking I may approach this as you suggested - working on it alongside my contracting career for the first year and have a clearer picture of likelihood of success then.

Good luck hope it works out ok juggle the day job & keep the home will be best you only really need about 3-4 hours sleep a day if you are not under any stress!

[oliverson]

NP hope it works out buddy I will say for me it did not & I lost probably closer to mid-high 6 figures as I was in a speculative exotic area of Trading so.............I wish now with hindsight I paid my mortgage(s) off instead & kept doing the day job when the rates were sky high! Unless close family or long trusted reliable friends you cannot really ever trust someone else in business can you so ask yourself if this other person is interested then why do they want you to put up a lot why can they not take the financial risk & your supplying the idea so you should still be equal partners!

I've known this guy since I worked for him as an office junior back in the early 80's and again in 2000 (but not as an office junior then!) so I trust him implicitly. The idea doesn't really require much funding, just effort on both sides. He's interested because he's not the kind of person to retire and he has vast knowledge in the industry. The idea is mine but it takes more than just development skills to get it to market. If anybody can do that, it's this guy. I have a meeting with him in a few weeks time so will thrash something out then. There's another chap/ex-colleague who would also be useful on the project but he's not available for another year. I'm thinking I may approach this as you suggested - working on it alongside my contracting career for the first year and have a clearer picture of likelihood of success then.

[uk contractor]

Very useful insight. Thanks.

NP hope it works out buddy I will say for me it did not & I lost probably closer to mid-high 6 figures as I was in a speculative exotic area of Trading so.............I wish now with hindsight I paid my mortgage(s) off instead & kept doing the day job when the rates were sky high! Unless close family or long trusted reliable friends you cannot really ever trust someone else in business can you so ask yourself if this other person is interested then why do they want you to put up a lot why can they not take the financial risk & your supplying the idea so you should still be equal partners!

[oliverson]

Only you can decide. I will say that I gave up a lot more than £150K & it did not work out for me at all then when I decided to return to contracting as a fallback the job market had shifted drastically & I got stranded. So IME I would say do not risk the house (rent it to a property company for instance to get some monthly income & hope they pay up on time) at all unless your very certain the dev market your in will be similar in time to come as many of those are shifting away rapidly & rates are continually dropping as evermore people come to the UK via dodgy Tier 2 visa schemes.


Try to juggle the new venture with your current lifestyle as you have no security if this proven entrepreneur fails or walks away. I bet they have a healthy financial cushion to fall back on its one of several venture to them to you it sounds like your risking all or nothing which is a risky undertaking.

Very useful insight. Thanks.

[vwdan]

Big risks, big rewards mate. But, in your case, I'd argue the risk isn't that huge so long as you have a Plan C - i.e., to get back into contracting.

Obviously the world is littered with failed enterprises, but there are also serious successes too and even failure is "relative" - I know a guy who gave up his business (due to stress and struggling to grow it) and went back to work. Walked away with no debt and had earned £100k a year for 5 years so his world didn't exactly come crashing down.

Likewise, I know (tenuously) another business owner who risked the lot to start a new venture. Remortgaging houses - etc. A quick look at the accounts tells me he's turning over £20mil with decent profit margins.....

I think it's about balanced, mitigated and planned risk - and you seem to be on the right lines for that.

With all that said, it seems like you really want the answer to be "don't do it". If your heart isn't in it and you're happy enjoying your comfy lifestyle up to retirement then there's nothing wrong with that.

[uk contractor]

Only you can decide. I will say that I gave up a lot more than £150K & it did not work out for me at all then when I decided to return to contracting as a fallback the job market had shifted drastically & I got stranded. So IME I would say do not risk the house (rent it to a property company for instance to get some monthly income & hope they pay up on time) at all unless your very certain the dev market your in will be similar in time to come as many of those are shifting away rapidly & rates are continually dropping as evermore people come to the UK via dodgy Tier 2 visa schemes.


Try to juggle the new venture with your current lifestyle as you have no security if this proven entrepreneur fails or walks away. I bet they have a healthy financial cushion to fall back on its one of several venture to them to you it sounds like your risking all or nothing which is a risky undertaking.

[VillageContractor]

Depends on the market, your network and how good you are

[oliverson]

At 150k a year that shouldn't be a problem

Could be as age isn't really on my side. 51 this year. Also, is it possible to pick back up on a contract dev career say at 53 after a couple of years off (in their eyes)?

[VillageContractor]

At 150k a year that shouldn't be a problem