7 Questions You Should Ask Yourself Before Leaving That Cushy Job to Start Your Own Company

By Hernan Lopez

“Look at that guy. I’m smarter than he is. I’ve got way more experience. And yet he’s the one with a startup worth, what, $100m?? What am I waiting for?”

If you’re reading this, chances are you’re at least curious about starting your own company. You may not have admitted it to yourself, let alone to others. I get it: Most new businesses fail. Change is scary. You may be earning a nice salary, sitting on tons of unvested shares, enjoying a paid expense account — and on top of all of that, you have two kids and a dog to support. So why would you take the huge risk of starting a new company when your family is counting on you?

For 18 years, I worked for Fox International Channels — a leader in the then-booming subscription TV business. I’d worked my way up to managing a division with 4,000 employees, enjoying all the trappings of success, along with the opportunity to launch new projects from within the company. I had the pleasure of working with incredible brands, like National Geographic and FX.

But, just like you, the “wantrepreneur” bug hit me pretty hard. I started reading countless books on entrepreneurship and talking to founders in the mid-2000s. It took me nine years (and two kids) to finally make the leap.

In 2016, I started a company called Wondery. We set out to create serialized podcasts designed to engage listeners emotionally, just like the best Hollywood TV shows did. I wanted listeners to feel like they were in the middle of the story itself. But the industry was tiny, estimated to be worth under $200m in total revenue that year, one of the reasons why we struggled to get investors at first.

Five years later, we sold Wondery to Amazon, to the delight of hundreds of shareholders (including every employee). It was incredibly satisfying to be stopped by fans every time I wore a Wondery T-shirt. “I could not stop listening to Dr Death,” or “I listen to Business Wars with my kid!” were two of my favorites. But first, we had to overcome some frightening setbacks. Every new company has them. We were among the lucky ones who got past them — but we could just as easily have not made it. So before you leave your cushy job to start a new company, here are seven questions to determine if your idea — and you yourself — are ready for it.

A warning: The following questions are designed to get under your skin. As you answer each one, be honest with yourself. That’s a fundamental skill required of every entrepreneur.

1. Are you running towards something or away from something?

This question may sound harsh, but your answer is telling. Do you want to start a company because that’s really what you are passionate about, or do you fantasize about striking out on your own because you are tired of working for your boss? If it’s the latter, I’ve got news for you: When you start a company, you trade one boss for many. Every customer, every investor, every board member, and every co-founder is now the boss.

Be very skeptical if your desire to start a new company comes too suddenly, or shortly after you’re passed over for a promotion.

2. Are you cut out to be an entrepreneur?

Do you like order in the universe? Yes, we all do. But being an entrepreneur requires you to walk — and possibly run — while spinning plates. To be comfortable with ambiguity. To design and execute simultaneously, iterate quickly, and make the most difficult trade-offs.

You may be thinking, “Well, I do all that in my current job. My job is anything BUT cushy.” And that’s fair. But it is one thing to do it for an existing business with an established customer base and a seasoned team; it’s an entirely different proposition when you’re doing it for a startup — especially in the first year when success and failure are incredibly hard to tell apart.

One very telling question: How would you feel if the ability to make payroll for your team rested on your shoulders?

3. Is your idea ready?

The most ambitious ideas often look obvious in hindsight but completely ridiculous when they were first pitched. Think of Airbnb. “Who in their right mind would let a complete stranger sleep in their spare bedroom?” Airbnb co-founder Brian Chesky was told over and over. But today many of us can’t imagine traveling without Airbnb as an option.

Not every idea needs to create a new category the way Airbnb did. Wondery did not set out to invent podcasts, nor serialized podcasts for that matter — by the time we launched, shows like Serial and Startup had already become big hits. But we did set out to create podcasts that sounded unlike any others and to build a distinct brand around them, modeling ourselves after Pixar and Marvel.

It’s impossible to summarize in one article all the questions you should ask to decide whether your idea is worth pursuing and whether others (customers, investors, employees) will get as excited as you are. I can only recommend some of the books and podcasts that helped me in my own path (see list below). Be mindful that as an entrepreneur, you’re going to hear “no” way more often than “yes.” Be a good listener; don’t confuse tenacity with arrogance.

4. Are you starting a lifestyle business or a VC-backed company?

In the US, companies backed by venture capital (“VC”) account for a large share of the biggest success stories in recent history. The flip side, however, is that the best VC funds get so many pitches — because who wouldn’t want to have the smartest investors in the world buy a stake in their company? — that those VCs have no choice but to reject the vast majority of pitches that land on their desks.

If a VC is going to invest in your business, they need to believe it has a chance of becoming a “10xer.” That means it’s pretty likely to be worth 10 times the valuation they invested in, which is even harder than it sounds since they will often invest before your business has any revenue, let alone profits. For some VCs the bar is even higher: They want you to be a unicorn. They want you to be the next Airbnb.

But it might be that you’d be perfectly happy to build a business that’s profitable, grows 10% a year, and allows you to draw a healthy salary and maybe one day sell it for a multiple of EBITDA. If you find yourself saying “that sounds pretty good to me,” you’re in the zone VCs call “a lifestyle business.” There is nothing wrong with them, just don’t look for VC funding, as you will be wasting everyone’s time.

5. Do you have a co-founder and a robust network?

If you are going to look for VC funding, it’s especially important to have a co-founder. VCs prefer teams of two to three co-founders who have experience working together, who know how to resolve disagreements, and who complement each other’s skillset (for example, if one is a code-oriented engineer, the other one had better be a people-oriented business person).

Even if you’re not pursuing VC funding and plan to be the lone founder of your new business, you should still ask yourself: Who’s in my professional network? Who can I call for advice? Who can I recruit to be on my team? Who can I call on for funding? Am I someone people generally perceive as being a good person to work with?

6. Are you able and willing to work for free?

The first year will be unbelievably challenging. It may take more than a few years for your company to gain demonstrable traction. During this time, you’ll be working on your company for free or for very little. Are you able to do this?

Before you answer, remember that your current employer provides you with much more than a salary. Think about everything you’ll give up along with that steady paycheck — health insurance, sick leave, vacation time, and company-paid travel. Plus, you won’t have your company’s legal team and other resources at your beck and call. Think carefully about whether you’ll be able to support your family for the foreseeable future. Consider what you’ll do if your company tanks and is not salvageable.

7. Take a look in the mirror. Are you resilient but not stubborn?

The first month of launching a startup is an exciting whirlwind. Your colleagues will congratulate you and promise to check out Product X. Your phone will ring off the hook. You’ll give media interviews. And then, after that exciting first month, your phone will stop ringing as often. People will take longer to return your calls. Some never will. You’ll hear the word “no” more times than you can count. And self-doubt will begin to creep in.

It takes drive, determination, and innovation to BECOME an entrepreneur. It takes grit and resilience to REMAIN an entrepreneur. The path is not easy. It’s full of rocks that threaten to trip you, and twists and turns that you never anticipated. Problems will happen — because problems always do — and things will not turn out the way you’d expected. You’ll need to rely on your resilience and your grit, and you’ll need to stay the course because you’re passionate about your idea and convinced that it will become successful. But for the time being, you’ll struggle. How will you know the difference between determination and stubbornness?

On the flip side, there are some questions you shouldn’t bother with. “Am I too old to do something new?” “Do I have the right business degree?” “Do I have the right industry experience?” There’s plenty of evidence that older entrepreneurs have the edge, and that degrees or relevant industry experience are not the most predictive factors.

I have written before about alternative paths, including becoming an intrapreneur. It could be that you’re ready but your idea isn’t — or that the timing isn’t right. I highly recommend not moving to the next step unless you have a good, honest answer to each of the Seven Questions. It might take you a while, but the wait will be worth it.

Yes, launching a startup is difficult. It’s full of challenges, and things can get very scary. But if you and your Product X have truly passed my Seven Questions test, you are ready for the next steps: team, product ideation, and funding. More about those in future articles.

*Some of my recommended books on entrepreneurship:

• Get Backed (by Evan Baehr and Evan Loomis)
• Zero To One (by Peter Thiel and Blake Masters)
• The Lean Startup (by Eric Ries)
• Build (by Tony Fadell)

Hernan Lopez is the Co-Founder of Danvas, a startup bringing digital art into the real world through museum-quality displays. Hernan is also the Founder and Chairperson of the Hernan Lopez Family Foundation, dedicated to helping increase diversity in leadership. Previously, Hernan was the Founder and CEO of Wondery, one of the largest podcasting publishers, acquired by Amazon in 2021.

Connect with Hernan on Twitter, or read more from Hernan at Entrepreneur.