yc-how-to-start-a-startupI’m part of a group of 9 entrepreneur-minded friends but most of us have financial commitment and we can’t start our company straight away. Personally I have planned to take 2 years to work for some other company and learn on the job but would like guidance on when is the right time to start our own company.
At this time you have a skill and a desire for success. Note many college graduates would like to form a billion dollar company, but nearly all do not fulfill that wish.
I am going to make a couple of assumptions. One: you are a top rate software engineer. Two: neither you nor your family has the capital to form a startup which would require substantial investment funding. Three: you did not take upper level courses in finance, economics and accounting. Four: The same is true for your 9 friends. Please correct me if I have made any incorrect assumptions.
The goal of all businesses is to make a profit. To do so requires a saleable product, a marketplace that wants it, the ability to deliver it to the market, the product to cost with all the ancillary costs (overhead, delivery etc) less than the amount received in the sale, management skills capable of making it all happen and enough capital to cover costs until the profit from sales can.
Typically the biggest obstacle to overcome is the last one, enough capital to cover costs. I’m not saying all that is necessary to start a business can’t be done in 2 years. It can, but you still must satisfy all the obstacles. There are many companies started primarily on determination and little capital. For such a company to become a billion dollar company would be extremely rare, but possible. I believe Microsoft and Amazon are examples.
Now, can you and your friends do it? maybe? The question you have asked is, when is the right time to start a business (company)? The simple answer is after you have your bases covered. But, rather than just starting a business, you want to form a billion dollar company. A better answer for you is, when you have a product with huge market place that generates a substantial after all expenses profit, or has the significant possibility to do so. Both cases still require that all your bases be covered.
Working for a company for a few years is a good start. Studying the basics and learning how your employer does them would be immensely helpful for you. But, you still need to cover the requirements necessary to start your company. Failure to do so, gives the realistic possibility (and maybe probably) of failure.
This answer is extremely simplified. The real answer dwells on all the details, of which there are many, necessary to meet those requirements that will form a successful (profitable) business.
There is a difference between the (A) “right time to start a company” and (B) the “right time to start a company by quitting your job and quitting everything else in your life.” The right time to start a “company” is once you have a product. The right time to “start a product” is ANYTIME AT ALL. Just start small and validate your idea in the market before investing too much into it. The right time to do (B) is only once you have a product that is tested (people want it) and a company that is tested (it can provide the services to sell and develop your product for less money than you bring in via product sales). Don’t drop everything without testing your product/company first!!
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