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Great points, and thank you for encouraging more people to start companies before they lock themselves into a mortgage. The typical advice is to take a big company job, but leave if bores you. My experience after graduating from Yale with a CS degree in 2002 was one where my job at kept me so busy that I didn't have time to be bored. I missed wearing many hats like I had as Online Editor of the Yale Daily News, or working at startups. So, at the recommendation of my manager (HBS class of '05), I left to be the 12th employee at a VC-funded startup. The company, Jobster, seemed like it was making great process but was just repeating the 90s mistake of spending more to acquire a customer than the lifetime value due to high churn. Jobster raised $45 million before realizing in-person sales and support cost too much, and started imploding. A new CEO raised another $7 million before selling off the company in pieces for a few million. The silver lining was that I helped co-found another startup that kept our costs really low so we still have $1 million of our original $2 million in funding we raised in 2007/2008. We'll easily pass $2 million in revenue this year, achieving the important milestone where annual revenue is larger than total funds invested. In contrast, many of the other circa 2007 companies from ex-Expedia alumns have raised 10x as much as we have, yet their revenue is at most double ours. For engineering grads, the best time to start a company is right out of school because the opportunity cost (forgone salary) is low and they haven't learned big company processes that are wrong for a scrappy startup. For HBS grads, the 2nd year is a good time because there are opportunities to collaborate on small projects with engineering students to test out a partnership. Finding a great co-founder is one of the most important and little emphasized keys to launching a successful company. Most companies go through a "trough of sorrow" (as Paul Graham likes to call it) where the initial excitement has faded and they haven't yet identified a good product-market fit. Having a well-matched co-founder is critical to making the right pivots and getting through that period.
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Dec 5, 2010