How To Quit Your Job and Start a Business That Lasts
If you’re going to ditch your day job and step out on your own, you’re going to want you to make sure that what you’re stepping into evolves into a sustainable, profitable, and growing company.
Look, I get it. It’s every employee’s dream — You can do what you do better on your own, with higher quality, lower overhead, and you can do it for more people and for people who need it more. Plus you’ll enjoy a greater return for your efforts.
That may be true — for a while. But if you want to build a lasting business, not just starting a side gig, not just transitioning from comfortable employee to scratch-and-claw contractor, but growing a business that turns into a startup that turns into a company, you’re going to have to serve two markets, probably more.
Here’s what those markets are and how to build and grow them.
First: Take In All You Can From the Existing Market
The top mistake most solos make is leaving their day job too soon. Going solo takes months, even years of preparation. I’m not just talking about the experience you’ll need to deliver an expert product or service in your field, but the situational knowledge required to build a sustainable company around delivering that product or service.
There are reasons why your former company is leaking efficiency, quality, affordability, customer satisfaction — all those reasons why you left. Yeah, your former employer might have gotten lazy, but it’s more likely they got bloated when they built a bunch of infrastructure to allow them to grow large enough to hire smart, talented people like you. You don’t want to make the same mistakes.
So while you’re still at your day job, take in everything you can before you leave. I’m not talking about contacts or customers. I’m talking about that situational knowledge and the infrastructure that developed out of it.
Look around and understand what your employer is doing around every aspect of your job that doesn’t directly involve you delivering the product or service itself. What makes your job easier? What will you miss the most? What does your employer have that you won’t? Do you need it? How can you recreate it? How can you make it more efficient?
Your First Second Job: Develop a New Market
When you go solo, your first job is domain expert: You are the lead on developing and delivering the product or service you’re now offering. The one additional job I can guarantee you’ll need to take on is the CEO role of growing your business.
But the mistake most solos make when they start their own business is splitting their duties between domain expert and sales generator for their existing market.
Don’t get me wrong, you’ll constantly need to be spending your time developing a sales pipeline and closing new deals. But if you’re doing that the way it’s always been done, maybe even the way your former employer did it, you’ll just wind up being weak competition in your existing market.
If you want your business to last, you’ll have to revolutionize not only how the product or service gets delivered, but also how it’s sold and who it’s sold to. You’ll need to carve out new markets, which will allow you to generate business both immediately and into the future.
So how do you develop a new market?
Serve Old and New Markets Alike
What you need to do first is break down the components of your product or service and figure out which components can serve your existing market and new markets at the same time.
I did this myself when I went solo after a run of successful (and a couple of unsuccessful) VC-backed and self-funded startups. I founded a consulting firm that worked mainly with startups, and I did the things for them that had made my own startups successful. But I also carved out a new niche for larger, established companies, who would be my new market.
I know. This is kind of backwards. Most solos fund themselves with larger, established companies and then try to establish new markets with smaller companies or startups. You can do that too. The idea is the same. Serve the people who are familiar with your product or service, and then carve out parts and components of that product or service to bring to new markets.
In my case, I found a number of large, established companies that wanted to operate with the speed and efficiency of a startup. So I became a kind of special ops within this new market and developed a new kind of consulting business to serve both the old and new markets.
Now you’ve got some choices to make.
Select the Best Targets in Both the Old and New Markets
You’ve got a market on either end of your business. On one end are the established players who look and act a lot like your former employer’s existing market. On the other end you’ve got a whole new group of players who may or may not be able to understand, find value in, or afford your product or service.
You need to pick the best prospects from both markets and focus on those prospects.
From the existing market, you target the most forward-thinking customers or those who are most closely aligned with your version of the product or service. With these customers, you act in your primary role, domain expert, and you do your thing.
From the new market, you target the ones who best understand your product or service, or who are most likely to find value in it, or can most likely afford it. With them, you’re in the CEO role, figuring out how you need to transform your product or service and your sales strategy to conform to the needs of this new market.
There are competitive benefits to this strategy. You’re not going after every customer in the existing market — leave the shitty ones for your former employer. You’re also generating new business from a market your former employer (and others like them) aren’t interested in or maybe even aware of. If you can turn those prospects into customers, you’ll gain a huge competitive edge.
Now you can think about scaling.
Find the Commonalities and Build on Them
Another mistake solos make is they tend to try to scale by bringing in the same business they used to do when they worked for someone else. The solos that do survive using this strategy end up becoming exactly what they left behind in the first place.
The main reason you want to work with two (or more) markets is to figure out which components of your product or service are common across those markets. You’ll use this knowledge to scale the business.
If you’re a service company, your inner CEO starts automating these common components so they can be done more quickly and by other people, especially by people who aren’t domain experts.
If you’re a product company, your inner CEO emphasizes and upgrades these components so you can intelligently broaden your audience and go get more customers at better margins.
Now you have to handle that growth.
Hire Equally to Handle Both Markets
If you want to split markets correctly, it will take a ton of time. That time gets taken away from you as a domain expert and also from you as the CEO. So you’ll need to backfill your time equally.
Hires on the domain expert side should provide short term help to your company. If you’re a service company, more domain experts means more revenue. If you’re a product company, more domain experts means immediate increases in speed to market, quality of product, and effectiveness of sales strategy.
One mistake solos make is hiring only domain experts to build the business person by person, which is something service solos do all the time. The result is the same bloat that made your former employer unattractive.
Hires on the new market side should help your company realize and execute your vision of bringing an evolved product or service to a new market. In both service and product companies, you’re bringing in technologists and product engineers and market strategists to help you find and cover new ground.
Another mistake solos make is hiring too much new market help too quickly. They wind up building amazing tech and marketing materials for concepts that they haven’t even proved viable yet.
The main thing to remember here is don’t hire more of you. Hire for gaps, and when you do, hire fractionally at first if you can. Because when you’re a new unique company serving a new unique market, all you need to do is get over that first survival hurdle. It’s not easy, but if you do it, you’ve got the best chance at building a business that will last a long, long time.
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