Launching your own startup is a big decision, especially if it involves quitting your day job. Even if your venture succeeds, you’ll probably experience your share of stressful days and sleepless nights. And if it fails, you may be in for worse.
Like most prospective founders, you’ve probably done some sort of risk/reward analysis. Rewards include doing what you love, learning and, of course, exit value – the monetary gain from selling your company.
But founders almost always ignore one vitally important part of the equation: how large and deep their networks will grow. And these relationships can be surprisingly valuable, even if your startup ultimately fails.
Why does this happen? In my experience, there are three basic forces at work. Let’s take a look at each.
1. Founder = salesperson – For your startup to succeed, you'll need to sell your vision to four basic categories of people: investors, customers, team members and vendors. Unless you’re already well connected to, and trusted by these folks, you’re going to spend a disproportionate amount of your time persuading them to get on board. In my experience, this can be up to 80% of your time. Fortunately, all of this effort will widen your network significantly.
2. There are no direct paths – By their very nature, startups are full of unknowns. The process can be like peeling an onion. Your understanding of your business model, customer and product will change as you dig deeper. It's the same with people. Suppose you’re building a SaaS platform for enterprise customers. You might start by focusing on small business, then pivot to Fortune 1000’s as you gain insight. Eventually, you’ll arrive at a core understanding of your target customer, but not before meeting many more people than you would have otherwise.
3. The brand is you – Not only will your network expand rapidly as a founder, but these relationships are likely to be richer and deeper. That’s because you are front and center and fully exposed. Like it or not, you’ll be in the spotlight as you weave your personal story and vision for the future into a compelling pitch. Passion plays a big role, too. It's hard to be objective when its your baby. This emotional commitment means you’ll expose more of your authentic self than you would by selling someone else’s product, a proven way to develop stronger personal bonds.
Is a bigger, stronger network a reason to take the leap? No, it's just one factor you should consider. But knowing that if all else fails, you will have your network to fall back on should mitigate some of the risk. Who knows? Your newly expanded network could even be the source of your next great job.