September 13, 2017
It was only two days before her salary arrived, but thanks to my client’s overdue payment, we were flat broke. I had planned for this, of course, but my planning went haywire when I had to pay for my client’s SSL certificates as they asked me to invoice them for those instead. I figured this was the time to bank on my American Express.
For most people, a prerequisite to becoming a parent is to have the security of prolonged employment to ensure the child’s needs will be met, including paid parental leaves and other benefits, such as flexible work hours and telecommuting. This is in stark contrast to the general feeling of insecurity that comes with working in a startup, typically without any of those perks.
Maresa Friedman, a mother of two and founder of Executive Cat Herder, admits “there is (this) daily fear that I sacrifice time with family for work that may or may not pan out.”
I can relate to the luxury Friedman has of having a partner that also has stable income, because in the event ours fizzles out we do have a backup. But potential entrepreneurs who are sole providers must think ahead before launching their own startup.
Take Jacob Glenn, who founded M Genio when his wife was pregnant with their second child. He refers to the old startup adage, “cash is king!” implying how important it is to have the “right financial foundation,” by which he means savings, so that you don’t put your family at risk even if you have a few paychecks missing.
The problem with launching a startup with finite savings is that they do get depleted sooner or later. Yuriy Mukhin, cofounder of Lalafo, was about to run out of his savings after three years without a salary.
“I felt terribly insecure,” he says, speaking of that time. “I finally realized what Maslow meant in his hierarchy of needs when you fall down from self-actualization to basic (physiological) needs.”
Mukhin is not alone in this. Almost all startup founders face difficult times. For me, I simply asked a friend to quickly Monzo me £20 when the shop refused to accept American Express.
Teris Pantazes, who cofounded EFynch.com, has an interesting take on this. She wants the same things every parent wants for their children, such as savings for college fees and elaborate weddings, but she thinks it is important to build a legacy to pass on to your children.
“The ‘clock’ starts the first day you go without a paycheck,” she says, perhaps referring to human beings’ basic survival instincts for food, water, and shelter. “The stress or ‘countdown clock’ can sometimes ignite a sense of urgency and often that is enough to push the startup (into) finally getting a spark,” Pantazes elaborates.
To understand this dynamic of building a legacy to pass on to our children against the need for financial conservation, I also spoke to Laura Ure, founder of Keenability.
She gave up a great salary to become an entrepreneur while she was pregnant with her second child because she wanted to make a difference in the world of marketing agencies. While she was able to afford a nanny initially with her savings, she often reinvested her salary into the company while working 100 hour weeks and filled the gaps with her savings wherever possible.
“We’ve also learned to cut back a great deal,” Laura explained. “You can still do a lot if you budget correctly. This is where most people get hung up. You must be able to live without income and take the risk. No matter what happens, you can try again. If you fail your first nine times, you’ll succeed the tenth, and you just keep pushing. If you don’t have that mindset, you won’t make it through.”
It’s true that entrepreneurship is always about perseverance, and those who have that extra burst of motivation to do it can manage to succeed even with familial responsibilities. But it is important to have a safety net in the form of savings, a working partner, or any other support mechanism.
Read more about creating a work/life balance at TechCo
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