Keith Strombotne quit his job as a director of business development in summer 2013 to pursue his dream of starting his own software business. But his entrepreneurial ambitions eventually collided with the hard economic realities of being a single dad with a 6-year-old son to support.
So Strombotne, 28, held a series of yard sales and performed odd jobs to raise some cash. And he scaled back on expenses by, among other things, moving to a smaller apartment. But it wasn’t enough.
“I realized I needed a steady stream of income to keep the dream alive,” Strombotne said.
Today, Strombotne remains absolutely committed to his startup, Joinzoo, which is developing a way for people interested in the same event – say, a youth soccer game – to view, save and share photos and videos without friending or otherwise connecting with each other. But at the same time he’s holding down a full-time, 30-hour-a-week job as director of development and community partnerships at Kidznotes, a nonprofit that provides free music lessons and free instruments to hundreds of students in Raleigh and Durham.
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That job has enabled Strombotne to plow “upwards of $20,000” in seed capital into Joinzoo, and it bought him the time he needed to recruit an experienced management team with the technical expertise he lacked. As a result, in August, Joinzoo launched a beta version of its app. Now it’s seeking a lead investor that can help the company raise $500,000 in funding.
The full-time job at Kidznotes “allowed me to keep the business going,” Strombotne said.
‘A sound business strategy’
Quitting a job cold turkey and devoting 100 percent of your energy to a startup is a proven path to success – but it’s not the only path. There are plenty of entrepreneurs who work full time for someone else while developing a startup on the side.
It’s especially common for startups of technology companies that face what can be a lengthy “pre-revenue” stage while they are developing and refining a product that they can sell.
Being a part-time entrepreneur, if you will, has its share of supporters and critics alike.
“It’s a sound business strategy,” said Raleigh lawyer Jim Verdonik of Ward and Smith. “I always (counsel clients), don’t quit your day job before you know if you have a business.”
John Austin, director of Groundwork Labs, a Durham organization that helps technology startups, said he’s sympathetic to part-time entrepreneurs who need to hold down a job to pay essential living expenses. But he has no patience for those who are unwilling to alter their lifestyle.
“Sorry, when you’re doing a startup, you can’t drive a BMW,” he said.
Although Austin used to be willing to accept part-time entrepreneurs into the Groundwork Labs program, he stopped doing so last spring because he was frustrated at how slowly their companies progressed.
“As I watch them, and as I see how they struggle to make progress, I get personally frustrated,” Austin said.
‘Incredible amount of commitment’
Brooks Bell, co-founder of business incubator HQ Raleigh, also is biased against part-time entrepreneurs based on her experience. She and her husband, Jesse Lipson, formed a website design company, novelProjects, in 2001 while she was a student at Duke University and he had a full-time job. But their startup didn’t start to gain traction until he quit his job and she was able to give it her full-time attention during a summer break.
“Doing it part time kept us from really mentally committing and putting in the hours and the work that were really necessary to truly get it off the ground,” Bell said. “Doing a startup is more than a full-time job. ... It takes an incredible amount of commitment.”
Bell strongly recommends that would-be entrepreneurs scratch their entrepreneurial itch before they get married and have kids “so they are unencumbered by other commitments.”
“It’s not that it is impossible to be successful as a part-time entrepreneur,” Bell said. “But I think it reduces your chances of success by 80 percent.”
As for novelProjects, it ultimately morphed into three companies. They include the marketing analytics company Bell heads – it’s called Brooks Bell – that today has 32 employees; and ShareFile, led by Lipson, which was acquired by Citrix Systems for $54 million in 2011.
Garrett Klas, the president and founder of tech startup Finridge, discovered firsthand that refining the concept for his venture and then developing his business plan while working full time took much more time than it otherwise would have.
Klas, 35, spent nearly 18 months as a part-time entrepreneur before quitting his job as a Hitachi Solutions America software consultant in mid-October. Today Finridge is looking to release its first product, a software tool for financial advisers and asset managers, before the end of March. Longer-term, it also plans on providing automated financial advice and financial planning to individuals over the Web.
“I feel if I had left right away and just taken the plunge ... I could have probably been where I am today in half the time,” he said.
The problem was that there were some days, even weeks, when Klas couldn’t devote any time to Finridge because of the demands of his job.
“You need to understand what your commitments are (to your employer),” Klas said. “You need to make sure you honor those.”
Still, while he was working Klas set aside 12 to 14 months of savings and invested more than $25,000 in Finridge. After he married this summer, Klas and his wife, a dental hygienist, took a chainsaw to their expenses.
“We looked at what our current budget was and cut out everything,” Klas said. “We eliminated cable TV. We eliminated all unsecured (credit card) debt. So all you have is just your expected, recurring bills.”
Klas is convinced that he left the security of his job for the uncertainty of his startup at the right time.
“You’ve got to figure out, when are you going to make that plunge?” Klas said. “At some point you can’t do it all. You are going to hit a wall ... where you can’t balance both and you are going to have to stop, and you’re going to just have to jump all in.”
Robbie Allen is proof that being a part-time entrepreneur can lead to full-time success.
Allen, 38, is founder and CEO of Automated Insights, a fast-growing producer of computer-generated content – such as quarterly corporate earnings stories that it supplies to The Associated Press. The company has about 35 employees and has raised $10.8 million in venture capital.
Allen nursed the venture along for three years while working as a distinguished engineer at Cisco Systems. He quit his Cisco gig in May 2010.
“I had my Cisco salary to help fund the endeavor as I was getting it off the ground,” said Allen, who plowed about $100,000 of his own money into the venture. “It let me explore the space I was getting into with a little more freedom, as opposed to having a short time horizon and money constraints out of the gate.”