Overview
Many businesses are built after-hours or during odd hours of the day and night. This panel was a discussion by entrepreneurs who built (or are building) their Web/E-commerce/Other business while holding a day job, multiple jobs, or who are currently balancing two+ career options.
The Panel
- Gretchen Heber – NaturallyCurly.com
- Jeremy Bencken – Buzzstream
- Aruni Gunasegaram – Babble Soft LLC
- David Altounian – iTaggit.com
- Elisa Camahort Page – BlogHer Inc
Panelist Backgrounds
Altounian – Started iTagIt while he was in school. Left his other job in 2007, and left for iTagIt. Then his business called him back and invited him to become CEO.
Jeremy Bencken – founder of BuzzStream. His first experience was as a founder of HarperRatings.com. Started in 2000 with his wife in his apartment in Mountain View. Would work from 8pm – midnight every day for 10 months. In 2004, focused on it and made it a full-time venture. In 2007, he sold the company to Internet Brands out of L.A. The biggest lesson is that you have to be ready for the work that is involved. You have to be ready to put your family obligations aside to build a business like this. It’s going to be a lot of work, and make sure your family and friends know that as well.
Elias Camahort-Page – Co-Founder/COO, BlogHer Inc. Throughout 2005, BlogHer was just a side thing. Before that, we didn’t have a company, just 3 chicks with credit cards. Through all of 2006, we were still working on WorkerBees clients, but split between that and BlogHer. Not until 2007 did we extricate ourselves fully, but not until 6 months later did we become Venture backed. My story is really about how you make those decisions, when you decide to go from… “Do you want a lifestyle business, or do you really want a company?” What do you really want, how hard are your willing to work. In addition to it being so much work, it’s so fulfilling, and it’s something that’s very rewarding. I never expected to be entrepreneur, but it has its rewards.
Gretchen Haber – Co-Founder, NaturallyCurly.com. There are 3 legs to our business, a social network, and online magazine, and an eCommerce component. Originally we had no business sense, we would just sit around the News room and talk about how to help our hair. So we created NaturallyCurly really as just a hobby, and we treated it as a total side gig for 4-5 years. Eventually, we decided we needed to turn it into something or quit. So we decided to make a go of it for while more, and eventually quit our day-jobs.
Moderator Questions
Having a partner… how important is that?
(Elias) My partner, our relationship has been built around the focus of us building a business together. At the time we started, we weren’t friends, we just decided to start a business together. The reason partnership is important is that, hopefully you bring complementary skills to the table. You come from different backgrounds, and you can weigh in with different types of expertise. I was running a product management team, so I had a lot of business experience. However, Lisa came from journalism and media development. Our third partner had a sales and biz dev background. All that meant that we respect each other and know how to give and take.
The second reason is that you need support from someone else who’s going through what you’re going through. Yes, your friends and family need to support you, but no one can really support you like your business partner.
The third reason is to carve up the pie. It doesn’t scale to have just one person, or even three people. Eventually, you need to carve up the pie, and know that one person leads a given area, and the other people are there to advise. It makes it a little more sane, because otherwise it’s a lot to tackle. Partners bring a lot to the table.
Gunasegaram: I have to agree. I started BattleSoft on my own, and I actually met my partner online.
(Altounian) A few things you have to watch for. You need to make sure you have partners with complementary skills, and not overlapping skills. When you don’t pay attention to that, there tends to be a lot of pressure over who’s going to do what work. And if you’re really trying to do this as a part time job, it’s really important that the expectation is aligned.
Make sure you and your partners have similar income goals. One problem with iTagIt is that 2 of us needed full-time jobs, and 2 of us were trying to do it part-time. When it got tight, there was a lot of pressure between those 2 groups. And a lot of wasted energy went into managing those pieces. Keep in mind… it might not grow into a full-time job for 2, 3, 5, as much as 10 years. So make sure your goals are shared up front.
Gunasegaram: How long was it before you took the jump to a full-time job?
(Bencken) It took 5 years to go to a full-time job. We were managing our revenue with Google, and we were scared Google would change something. We waited until we had 2x what we needed for salaries in revenue, before we made the jump, on the contingency that maybe our revenues would drop.
Gunasegaram: How do you manage your resources?
(Heber) That’s a good question. Inevitably, some of your side work will bleed over into your full-time work. The first job is to ascertain how receptive your current employer is to allowing you to have a side gig. Some employers are very open to it, particularly for developers. It’s helpful to them often that you have a side gig, because that’s where you stretch and develop new skills. Other employers aren’t that open to it, so you have to be careful. Make sure you understand the specifics of any inventions agreement you might have signed when you came on board. For programmers, there’s probably an agreement that says if you work on something from 9-5, they own it. So just, be careful.
The company will almost certainly – regardless of what they say – own anything you do for your company on their computers. So don’t do anything… because they WILL own that, and you could be hosed.
(Altounian) Don’t do anything with your company equipment, because it really exposes you. Even if your company says it’s OK. Lawyers can easily change the verbal agreements after the fact. “JUST DON’T DO IT”. It’s a simple rule to follow.
Gunasegaram: Doing this company full-time, and now part-time, there’s always a need for funding. I just wanted to talk about the challenges of that, and how you plan and manage for the timing of getting funding?
(Altounian) When we started Motion, we were planning on getting money from the very beginning. I tried to do the same thing with iTagIt because we had raised money once. What I didn’t take into account was, in my mind it’s a part-time biz going into a full-time biz. However, once you raise money, the investors expect it to be a full-time gig. They want their money to be working full-time for them. However, in your mind you might still be bootstrapping the business, and then you have two employers you are dealing with … your investors, and your regular employer. So that’s tough. Be really careful about that.
(Elias) One of the things they said was important was about how they saved up. Starting in 2006, we bootstrapped for 18 months. We started sharing revenues with a whole bunch of other people, our vendors, distributors, service providers, conference attendance (travel) etc. So we weren’t paying ourselves very well, because we were always the last to get paid. So I started saving money, saving money, because I always wanted the freedom to walk away from a full-time job. In the middle of 2003, I walked away because I had 2-years of income waiting for me in the bank.
The people who fail as entrepreneurs never ask the question “What’s the worst that can happen if I fail?” Ask yourself, and really answer the question. And then set yourself up for success. Conserve cash. Conserve cash. Extend your runway. Do it now, do it before you have funding, because you will have learned a lesson about how to do it once you do have funding. You can probably get into 6 figures in friends and family. Then, up to .5MM angel. Beyond that, VC. Any money comes with strings attached, so understand the strings, the risks, the real worst-case scenario.
Understand what you all agree you want to do with your business. We all agreed there was more demand out there than we could meet with friends and family, or angel. So we went with VC. But once you have that, there’s a lot of commitment and things on your plate. So understand your goals there.
(Heber) I just went into debt. I just don’t know how a person could do it as a side-gig after having some funding.
(Altounian) One of the things I was very careful in the beginning was to talk to my wife about it. My wife’s answer was “we could always work for McDonalds, go for it”.
(Bencken) I think I’m the only business on the panel that hasn’t raised money. If your business id dependent on SEO or user-generated content, it needs to grow organically. For businesses like that, it’s good to stay part-time so you can give it a chance to grow on its own, and lowers the pressure to grow quickly.
(Elias) Another good reason to bootstrap is to set up a revenue stream. That would give you better valuation when you do raise cash.
(Altounian) If you are going to do it part-time, you also need to tap into your network to get help. Jeremy Bencken is one of the best at that, he’s always calling people and networking to get the biz needs met.
(Bencken) Another thing you have to be willing to do is dive in and get your hands dirty. You can’t rely on external resources for all of these things.
Audience Questions
Eric – working on some products for non-profits. What is your experience working with the cloud, computing vendors?
(Bencken) Use Amazon services. They are really cheap. We started on rack space that was expensive, but it was good uptime. If you’re looking at cloud services, take as much advantage of them as you can, up to the time they will create more headaches for you.
(Altounian) We are all technical, so we all thought we would be doing it a lot cheaper if we bought our own equipment. We got one big hit on NYTimes, and our site was down for a week. So I would say don’t do it yourself.
Joe – user experience designer, researcher. I’m wondering.. “what’s the one thing you wish you had in the early days of your business?”
(Bencken) More time in the day. Sometimes it feels like sleep is your biggest obstacle. You always want more time.
(Heber) I wish I had more frank conversations with my family. I wish I had known how long it would take, and given more up-front conversations.
(Elias) I wish I had some concept about how to balance my life. When it’s yours, it’s never off. Luckily, my husband codes for fun. So he gets the passion, so I’m lucky. My schedule is brutal, and I sleep 5 hours a night. That’s mainly because I can’t turn off my mind. So I still need help with that.
(Altounian) I wish I had had a much more developed network. I didn’t understand how different this world was from traditional hardware biz. I wish I had network and expertise before I got started.
Question – A lot of people’s side jobs have now become main jobs because they got laid off. So, what should people think about now?
(Gunasegaram) This is the question of “accidental entrepreneurs”. This is a challenge because now you need to think about your project in a business way.
(Elias) It was helpful for us that we didn’t think of it as a business. We started with the community, asking what do these people want. So we built a following, and then we asked, “how can we build a business around that?”
Tom Singer – 3 years ago, I worked for a company that wasn’t supportive of my sidejob, so I just hid it from my company. 1.5 years ago, I found an employer who understood that my sidejob was relevant, so I moved to that. My current employer is very supportive. My question is this… how much should you share, even with a supportive employer, about how well/poorly your side business is going. Sometimes I’m cautious to share with them how well I am doing…
(Heber) You are right to be cautious and hold back a bit. Ultimately, they don’t really want to know how well you are doing, because they have other masters to serve.
(Bencken) I think you should just be honest and out there with your company, on your company site. But, you shouldn’t talk about it at all at work.
(Elias) I think most people are still pretty uncomfortable with talking about financial situations. It puts everyone in an uncomfortable situation to talk about finances. People in the U.S. would rather talk about sex than how much money they make.
(Altounian) If you can figure out how to leverage it so your employer gets a side benefit, that’s a great idea. One of our developers was a UI developer, and by working on a side business, he was able to bring his learning back to the company. However, you don’t want your employer to think it’s enough of a side business that you could leave them. However, if there is value to your company, you might be able to get a lot of support to work on those things.
Audience – When was that moment, that you knew you were going to make it? As a web startup. new technology is coming at it very quickly, so if it’s not taking off after 2 years, do you consider changing technologies?
(Bencken) You could flip that around and say… how do you know you’re not going to make it? If it’s not consuming or eating you up in terms of savings, and you can grow it on the side… there’s really nothing that can take it away.
(Altounian) For me, when I knew we were starting to make it with Motion, is when people started trying to take it away from me. When you start to have external forces pushing the company, that’s when you know that you’ve made it. For many people, making it means $100MM. But for me, it meant that Motion took on a life of its own, with external factors, and growing independent of me.
(Elias) We always say “we’ve made the job we want to have” so we’re not too anxious to take off. We just want to continue building this company we created.
(Gunasegaram) Most companies will not turn out as you expected it to, but you always have to have the courage to say “is this the right time in my life to be doing this?” We’re all facing that in different situations, and we’re seeing a lot of companies shut down for mental, financial, spiritual, etc.
(Altounian) Get an advisory board. If you have an advisory board, they can remind you about your list and your goals, and keep you focused. I think that’s a huge tool especially if you are doing this part-time.
Chris – people often don’t go into their own endeavors because of lack of knowledge. How much did this limit you? And do you actively seek out collaborators to fill those gaps?
(Heber) When we started, we knew nothing about business, so we absolutely needed some help. My biz partner Karen was quick to jump on the phone, and ask people for help. We got Paul Mitchell on our board of advisors. How did we do that? Because people are excited to help you out, and share their information.
(Gunasegaram) Just reach out. You don’t know where anyone is at in their life. Maybe they’ll want to help you.
Guillermo – A lot of ideas start “wouldn’t it be awesome if…” so when do you cut the corners and develop what is out there? And when do you try to build it yourself because of your needs to have it be custom, scalable, etc.?
(Elias) I think you need to be able to show something pretty soon. There’s less willingness in investors to fund the experimental stage. So I think you should use tools to get prototypes up as quickly as possible and show something for what you are doing.
(Bencken) There were only a few things in our business that we had to create ourselves. Those are the things we created. As much as possible, use existing frameworks, CMSs, things like that.
Takeaways
- Protect your IP from your day job
- 8pm to midnight is a beautiful thing
- Don’t beat yourself up – you’re not full time, so realize that in advance and lower expecations
- Set expectations with your family/friends
- It works for some but not all niches – Semi-conductor can’t do on side, but some others you can
- Partners rock. Get one.
- Use care in raising external funding






