I've just passed my five year anniversary. I would do it again, but the financial instability is still extremely stressful, particularly as I enter my mid-thirties. It's always feast or famine.
My observations:
1. Pay off debt as quickly as you can. When you're broke again, you'll be grateful you did.
2. Never put all of your eggs in one basket. When you only have one or two major sources of revenue (or clients), you're as dependent as an employee, but considerably less secure.
3. No matter how unnecessary it may seem, have a real, legally binding contract for any work you commit to do. I thought I did. I was wrong.
4. Budget for marketing. You can't depend on viral marketing alone.
5. Have health insurance. It's expensive and you can't afford it, and I know you're young and healthy, but when your appendix decides it's time to come out, you'll be on the hook for about $22,000.
6. If you're working from home, set boundaries. I won't work past 8pm, and I try to take one day a week off.
Ideally, you'll have some brilliant idea, already live frugally, have no debt, and a craft a bulletproof plan. Realistically, nothing can prepare you for the experience.
To follow on to 5), health insurance isn't just about you. It's about those who care about you. Helping to ensure they are not placed in a financial bind caring for you should something serious or catastrophic occur. Most likely, there are people in your life who would feel compelled to help you, even if it is a severe strain for them.
And as someone else commented on another thread here, in the last month or two: An insurance company will likely negotiate much lower charges that you can get as a private individual (in the U.S., at least). Even if you are left with part of the bill to pay, that bill is likely to be significantly smaller than it would have been were you uninsured.
I'm currently on a small business HMO plan through Blue Cross/Blue Shield. I'm in Massachusetts, though, so I can't necessarily recommend it if you live elsewhere (insurance here is compulsory, rates are partially regulated, etc). The one advantage of being on a small business plan here is that you're covered the day your first check clears. In contrast, individual plans generally have a 6 to 8 month waiting period during which you pay premiums but receive no coverage.
Overall, I am glad I quit my job. Other than the fact that I am broke, I learned and accomplished a lot and ready to take Yonkly to the next level.
Personally, I think this is awesome, but it also should serve as a warning to those that are afraid of financial troubles. Most people who go this route truly do have to risk it all, so if you arent ready for that you should find a way to transition. For me -- living on the cheap while doing your own thing is great, and the only way to really motivate.
I agree. It is very risky. When I made that decision, I basically told myself "what is the worst that could happen?" The answer was "lose my house and rental properties, declare bankruptcy, screw up my credit score". Then I thought "that's not too bad." I graduated in 1999 with zero money and got to where I am, so I can probably do it again in half the time.
Right on!. I'm with you. However, probably not recommended with kids or medical problems.
But for everyone else, as long as you can get over the ego parts -- you will have to give up going to nice places for dinner, driving nice cars, having big houses, new toys, vacations etc, all the way to bankruptcy, as you said -- then it is worth it.
i think a lot of these fears are played up by society in order to induce good worker bee syndrome. losing your material wealth ain't shit in the face of freedom. programmers have the most in demand skill in the world right now. if you go broke you can always come back.
as Borat said to the chicken: live your life!
When people hear "risk takers" they mostly seem to think skydivers. But as bold as skydiving is I have more respect for entrepreneurs. While both efforts are bold, entrepreneurs have to be consistently so. Unless you point them out, people don't think of the founder with no degree living off savings risking it all on a hifalutin startup.
Skydivers and extreme sportsman seem better at signaling [1] risk than nerd entrepreneur. That's a big reason they're better at attracting women too.
Living on the cheap is one thing, going into huge credit card debt will follow you forever. :( Sounds like a gleeful story of doing it "your way" but a massive cost.
I think the blog post is a bit in denial because you haven't really said anything about any future out comes you see happening next.
What is the credit card debt? How much do you think you'll make on the book after publisher fees/whatever other costs. The web 2.0 service is cool does it have any plan for profit?
Congrats on the engagement and doing your own thing, I just wonder if you'd do it all over again or if you'd try and bootstrap your own efforts more so that you could avoid the financial black eye ya got here and still make something your truly passionate about.
Let's say you're carrying $50K of credit card debt. Do you realize how much it costs just to service that debt? If your revenue is not greater than the minimum payments (just over the cost of interest) on that debt plus your living expenses, then you're a dead man walking. Borrowing from Peter to pay Paul works until you've max'd out your credit lines, and right now from the sounds of it you're accelerating toward that limit faster than you realize.
Focus on your cash flow. You need to be able to service that debt and pay for your cost of living. If you don't want to take a salaried job, start focussing on your consulting gigs. Preferably, find gigs that pay more. If that's not enough, take more of them (but be sure you can do the work).
I wish you luck. But it sounds to me like you're starting to realize you're in over your head and you're a bit shell shocked. I've been in your shoes, and I had to make some tough choices that involved temporarily moving back in with my parents until I got my finances under control, and working my ass off to the point where I barely got enough sleep. Thank goodness I didn't have mortgages to carry though.
I think his point is that you're not profitable until you can pay your living expenses with your income. You aren't "ramen profitable" when you're living off of credit cards to make ends meet.
Congrats on making it this far. Maybe we should start a meetup or support group for hackers who quit their jobs to find their entrepreneurial selves.
I just had my one year anniversary six days ago. Oh how time flies. I left the military to venture out on my own, finish graduate school, and see what happened.
I'd love to tell the rest of the story but I have to go catch a train. If you get a chance, consider writing about the ups and downs of the process. I know in the beginning it really ate me that I wasn't making progress fast enough. Time, progress, and a sweet spot for pain helped :) but yeah... its an interesting process.
I just passed my 7th year of self-employment and have been through many ups and downs. I have learned a lot but still have a lot of questions. I don't comment much on HN, but I respect and trust this community quite a bit. I think a support group is a great idea. Anyone else?
Well its still a good inspiration story and it may fly in the face of rising unemployment and horrific economic playground happening out there right now.
Major props for laying the story down, not enough people do that.
Overall I still feel you need 1 or 2 more bankable deals under the table to help you pay off the debt and getting back into the green of things.
Luckily you got into the ad model biz when you did because that is a dying model of profit. Covering operating costs and groceries is good but you should probably try to weave it into a sale or use it as a spring board to get a consultancy gig. Meanwhile the book keeps you a bit above water but well.. you're outa ammo.. start working on book 2 asap and get some additional green in that door or the stress of debt will eat the love of your life.
yes. Did I mention that I am bad at managing my finances. Plus I thought the houses would go up and I would sell and make a $100k off each. Enough to finance my startup for 2+ years. It didn't work out that way though.
I am doing small consulting jobs here and there that barely pay the bills but I am mostly focused on Yonkly (the book is almost done). I am also in the process of talking to investors and if things work out then it will be 110% Yonkly.
How much time are you spending on the marketing aspect of Yonkly? If you aren't and started spending an hour or two a day -- seriously attacking it, you might be able to get ramen profitable quickly.
For instance, the site doesn't quickly drive home why I need your service. It kind of muddles around. If you tightened things up, starting an affiliate program, did some AdWords, etc. you might be able to focus on the project 100% once it pays the mortgage.
Google 'yonkly' -- it's strange what it comes up with. That type of thing needs to be fixed. Just a couple ideas, hope this helps -- I launched my web service last month and we are already ramen profitable.
There is just not enough hours in the day. I do need to focus more on marketing but I am not an expert. Can you recommend anyone that will work for equity? :)
I googled Yonly and everything looks. What exactly are you referring to that needs to be fixed?
Yonkly - Create your own network
stephp elmagnifico domnanou wmshaxpere yonkly eibrahim venturedig troygoode eonian ... domain yonkly chinese sbepstein allenwang allenwang1981 rmarley ...
I'm guessing that these are usernames of your users, but I'm not sure why they're being used as your Google description. See if you can fix this and replace it with a description of what Yonkly is, and I'd bet your search engine traffic will increase dramatically
I just quit a lucrative job in Vietnam and will be moving back to the Bay to seek a marketing position with a tech company. Obviously not a good time, I know. But like you, I've found a path I'm excited about pursuing and need to move on and make it happen. It's only been 2 weeks since I quit - and have some plans to travel and live in Vietnam while I begin the job search. Not a bad place to be while you're jobless and seeking! It also works because I'm single and have no debt. I hope my 1 Year post won't include me being broke, i.e., I hope I find a job, but sounds like there may be some more payoff coming to you with Yonkly and the book. Thanks for sharing such a personal story. Good luck!
Yes, site owners can run their own ads to monetize their networks. Technically speaking, they can paste and javascript code into their network header and sidebar, so they can add widgets, tracking code, ads or whatever they want.
Where are you hosting your site? Are you hosting at Dreamhost (whois data)? I don't see anything on their site about ASP.Net apps. If not, where are you hosting it or are you doing it yourself in a data center?
I just keep thinking to myself, "here I am working so hard at improving my programming abilities so that I can create more ambitious applications, and this guy is making a small fortune selling a freakin' Bingo card maker."
Congratulations on becoming "Ramen Profitable". If you decided to email 5 enterprises everyday about "Yonkly For Businesses", I bet you would do even better. Great work.
My observations:
1. Pay off debt as quickly as you can. When you're broke again, you'll be grateful you did.
2. Never put all of your eggs in one basket. When you only have one or two major sources of revenue (or clients), you're as dependent as an employee, but considerably less secure.
3. No matter how unnecessary it may seem, have a real, legally binding contract for any work you commit to do. I thought I did. I was wrong.
4. Budget for marketing. You can't depend on viral marketing alone.
5. Have health insurance. It's expensive and you can't afford it, and I know you're young and healthy, but when your appendix decides it's time to come out, you'll be on the hook for about $22,000.
6. If you're working from home, set boundaries. I won't work past 8pm, and I try to take one day a week off.
Ideally, you'll have some brilliant idea, already live frugally, have no debt, and a craft a bulletproof plan. Realistically, nothing can prepare you for the experience.