Hey there, I'm Shanif! I'm working in the tech field and have a background in technology, analytics, startups, and even options trading. I've been developing software since 1997, working in startups since '08, and started trading options in '09.
I have a BS in Computer Science and Information Systems Engineering, and an MBA (specializing in Quantitative Finance and Entrepreneurship & Innovation). These days, I'm working on product analytics at Twitter after they acquired a mobile ad company I helped build after b-school. Come say hello!
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Startup Learnings – Make Sure You Have Some Money
Our old CEO at TapCommerce used to have a favorite saying: “the only cardinal sin in business is running out of money.” It’s pretty hard to argue with that.
The unfortunate truth of the matter is, if you’re going to have a chance at a successful startup, you’re going to need to sacrifice a lot – time, relationships, and money. When you’re working full time on a startup (and no, part time does not work – more on that in another post), you probably won’t be making any money at the start, but you’ll still be responsible for your personal and business expenses. So somehow, you’re going to need to be able to cover all those costs that keep adding up for the next few months.
What that means and how you do that are going to be different for everyone. What it meant for me was coming out of business school in one of the most expensive cities in the world without having made a salary for the prior two years, and quickly needing to adjust my lifestyle. My ability to trade options, which got me partially through b-school, was being affected by my long work hours. My lease had just ended and so I took the opportunity to cut costs significantly by sleeping on a friend’s couch for five months before we raised our first round of funding. I stopped buying groceries and didn’t go to the gym for nearly half a year. Even after we raised our first round, I was doing my best to keep expenses low, since we were only taking a token salary. I had been able to budget my savings for the next year, given my new salary, but the continuous stress of not having any money to do anything was one of the most difficult things I’ve had to deal with.
There’s a line in one of Kanye West’s songs that goes “having money’s not everything, not having it is.” You really can’t know how true that is until you’ve lived through it.
For those of you that have never had to worry about running out of money, you should count your blessings right now. The first year of our startup was one of the most stressful, and consequently, one of the unhealthiest, times of my life. The lack of money was constantly on my mind, constantly gnawing at me. My savings were dwindling faster than I would have liked, and my habit of saving for the long-term took a backseat to needing to pay the bills. It was bad.
Now, I knew that I had an out, and I don’t claim to know what it’s like to really have your back against the wall. I could have gotten money from family if I needed to, but there was no way I was going to let myself do that. I wanted to have a true startup experience, and I knew that if I took money, I would always look back and wondered if I could have made it through on my own. I’m glad I did.
But we were fortunate. We did raise a seed round of funding, and then a year later, we did raise a Series A that gave us enough to live a decent life. Our salaries weren’t quite up to market rate, but they were still good enough to let us live comfortably in New York city.
Not every startup is as lucky. Sometimes you need to make a little bit of money go a long way. Sometimes you end up spending more of your time wondering where your next paycheck is coming from, rather than working on growing your business.
Some entrepreneurs get government grants. Some generate revenue from their businesses immediately. Many do a lot of consulting and freelance work on the side. Whatever you do, just make sure you’re prepared for a long period of nearly no income and constant expenses.
Living like this takes a toll on your mental health. There are few things more stressful than wondering how you’re going to pay for the things you need to survive. If you’re trying to start a business for the first time, and you’re really committed, save more than you think you’re going to need, build a product as quickly as you can so that you can raise some money as early as possible, and prepare yourself for the mental stress that will undoubtedly come.
If you get past all that, it will, without any uncertainty, make you a stronger person. And if everything goes well in the long run, you’ll have a business that can pay you back in spades after a couple of years.
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- Name: Shanif Dhanani
- Address: New York, NY, USA
- E-mail: email@example.com