Watch this YouTube video on how to prepare to start a company in our Founder FAQ series.
Preparing to Start a Company
With smart preparation, leaving a job to start a company is not as intimidating as it may seem. In 2016, I quit my job at Google to launch Wilbur Labs, a startup studio that builds companies. I remember wanting to work at Google since I was 14, so leaving after three years felt risky at the time. Before long, others in my network were reaching out to me saying: I’m thinking about leaving my job to start a new business. How did you do it?
1. Plan, Plan, Plan
Starting any company has inherent risks; don't add extra risk by leaving your job without a plan. We surveyed 150 founders about their experience with startup failure and found that lack of planning was a primary cause of failure. In retrospect, only 51.3% of the founders thought they were adequately prepared when they launched their company. Planning for both the business and your personal finances is key.
At a minimum, having a plan means that you:
Researched the problem you are trying to solve, including speaking with numerous industry experts and potential customers.
Drafted a product roadmap, startup checklist, and financial model. As former Google CEO Eric Schmidt put it, “Revenue solves all known problems.”
Are ready to work full-time on your startup or company with a clear line of sight into what specific actions you need to take to get there. Ideas are worthless — execution builds companies.
Plans never work out exactly as intended, and building a company always takes longer, costs more, and requires more adapting than you initially expected. At first, most founders cannot afford to pay themselves a salary. It’s important to save more money than you think you’ll need for both business and living expenses.
2. Manage Your Expectations
Talk to established founders or business owners about their day-to-day work, challenges, and recommendations. Learn the realities of starting a company that you won't glean from Shark Tank or social media.
Researchers have found that seasoned founders have higher odds of success compared to first-time founders because they learn from past experience. Many problems you will face have likely already been solved. Learning from others lets you focus on the problems unique to your individual business.
Almost all founders will say that you wind up working longer, harder, and with higher stress than any 9-to-5 job. Initially, you’ll spend lots of time on unexpected business-building items, such as corporate structuring, setting up payroll, choosing health insurance, compliance, establishing hiring and onboarding processes, and building up IT infrastructure.
For the areas you find boring or that are outside your domain expertise, rely on expert advice instead of first-page search results. For example, a good lawyer and accountant are invaluable and — despite their high upfront cost — will save you money in the long run.
3. Don't Burn Bridges
It's a small world and burning bridges is always costly. Launching a company is hard enough and you will need a support system. Your current teammates and managers can become allies, advisors, hires, customers, and investors — as long as you leave with tact.
This starts with continuing to work hard at your current job until you leave, and having the mentality of leaving it better than you found it. This may mean documenting projects you’re owning and building your own offboarding plan so that there is a smooth handover. The main takeaway is planning ahead and giving adequate notice before your departure so that you leave your colleagues in a strong position.
If you leave with zero notice and planning, you’re essentially leaving by waving your middle finger on the way out and inadvertently shooting yourself in the foot for any future references or opportunities down the line. In addition, leaving a job to start a company can bring a wave of loneliness, and burning bridges makes this even worse. Leaving professionally and gracefully will only help you in the future.
4. Find Your Long-Term Passion
It has become popular to bash the concept of “finding your passion,” but those critiques miss the point. Founders rarely achieve instant success, and starting a company to make money quickly is a terrible idea.
Eventually, you’ll get a call at 3:00 a.m. about a disaster, only to spend sleepless days and nights cleaning up the mess. If you’re not in it for something more than money, you’ll struggle in those moments and run out of steam long before the payday.
At Wilbur Labs, we always ask potential founders if they want to work on an idea for five to ten years — as much as 25% of a 40-year career — because that's the minimum amount of time that it takes to build a significant company. Founders must genuinely care so much about solving a problem for others that they are willing to go “all in” for that duration. Time and passion are the ingredients for driving positive impact.
If a “passion” isn’t what would motivate you to focus on something for a quarter of your career, maybe it’s a cause, purpose, or vision. The difference is semantic. Before you quit your job, be sure you can commit to — and enjoy — ten strenuous years.
Build a Community Behind You
In the long run, most businesses fail and no plan is failproof. Find every advantage you can before joining the millions of other people braving entrepreneurship. If 2023 is the year you decide to go for it, make sure you go forth with a plan, realistic expectations, support from previous employers, and an idea you truly care about. That will give you the strongest edge for success.
If you’re in the early stages of building a startup, check out our blueprints on how to get startup ideas and how to turn your idea into a business. Also, be sure to follow Wilbur Labs on LinkedIn, Twitter, Facebook, Instagram, and YouTube as we continue to release more blueprints in the future.
Interested in working with us or have a unique business idea? We’re always looking for talented people to work with and exciting projects to partner on. Take a peek at our available openings or contact us.
Wilbur Labs is a San Francisco-based startup studio. We turn bold ideas into market-leading companies.Learn More →