I woke up last Friday morning in a headspace I haven’t experienced before. It was my first day of self-employment (read: unemployment) and I immediately had a new perspective.
Since college, I have only taken one vacation of more than 4 days. In December/January, I took a week off around New Years Eve to go to the beach in Florida. But even on this vacation, I had looming obligations, to dos, and work-related challenges my mind was constantly trying to work through.
On Friday, I had one thing on my mind: how I do best build a business around my life and keep myself from going broke.
It sounds stressful, but it didn’t feel that way. Every thought pertained to solving a problem that was intensely personal and important to me, and my mental firepower was reserved solely for that purpose.
Up until the moment I was fully out, I had nagging anxiety and doubt. But once ties were cut, it had never been so clear that I was ready to go out on my own. (Seriously; it sounds like hyperbole, but it was a profound shift).
The first thing I did upon waking up on Friday was check my bank account. I had a loose understanding of where I stood, but I wanted to be completely solid.
For this plan to be viable, it’s a pretty simple formula: I need to make more money than I spend.
I want to take some time off and give myself a short break, which means I will only be spending money during that time and burning my savings.
“Burn rate” is a concept that is commonplace in startup culture, and it just means the rate at which a company is spending cash. Being self employed, I have a personal burn rate, and my biggest concern is keeping that low while I start bringing in revenue.
So I looked at my most recent personal budget to see what I could cut out…
OK, I can definitely stop paying for the parking garage…I will just need to start buying groceries and learning to cook…I’ll keep drinking at a minimum…and I probably shouldn’t renew all these domains. “motivationull.com” could be a great brand of novelty t-shirts with de-motivational quotes but I’ll never do that; who am I kidding.
I learned to manage burn from my former business partner, Alex. We raised $382k in seed funding for Tixers, and we spent almost nothing. We stretched the hell out of every penny.
I remember reading a series of concerned tweets from Marc Andreessen about startups burning cash and feeling smug.
But no matter how frugal I am able to be, that only prolongs my burn rate and doesn’t eliminate it. I need to bring in revenue to truly feel comfortable in flying solo, so it’s time to prove my abundance theory.
I believe money is abundant. By creating value and connecting to people through work that I care about, I will be just fine.