How To Know Your Side Project Is Ready To Be A Startup

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How To Know Your Side Project Is Ready To Be A Startup


turn idea into startup resized 600The word startup seems to be used too loosely in this day and age. Some people think something built in a weekend or over the course of time on the side is a full fledged startup, when it is often just a side project. Building things is great, more people should do it and do it often. The problem is, most people either take the leap at the wrong time OR they don't take a leap at all, when the signs are there. I recently went through this process a few months ago myself on taking PadPressed, now Onswipe to a full time startup. Here are the 8 things that I realized, which are telltale signs that you might be ready to turn your project to a full time startup.

You’re Doing Something You Love

This is key not only early on, but for the long haul. I know it sounds cliche and you hear this from everyone, but it's one of the most true and consistent pieces of advice given out in the startup world. Startups are a marathon and even though you often hear about the good times, you will rarely hear about the difficult times. There are always more difficult times than good times. Any normal person would just give up, pack it up, and return to the real world. If you absolutely love what you do, then there is a higher motive there that will keep you going on. The work you do needs to transcend being "work" and become even more than that.

You’re Making Revenue

Getting somebody to give you their credit card and their hard earned cash is way harder than most think. For some companies it will happen easily, but for most, it just doesn't. If you start making revenue that can pay your most basic expenses, you're on the right path. The difference between zero dollars and one dollar is huge. If you have figured out how to bring your first dollar in, you might be ready to take things to the next level. If those dollars are rapidly growing, even more reason to continue onwards.

You Know The BIG Vision

This is key and often an awkward point for most aspiring entrepreneurs. It's a side project, two guys in an apartment, nights, weekends,etc., so how is it possible to imagine going from that to being a multi-billion dollar company? It just feels really weird thinking about that, right? DON'T LET IT. It's a point you can get to, but it will never happen if you don't start to formulate those thoughts. Zuck started FB at one college with one photo, but I bet you he knew exactly what it could become one day. Having a larger vision to aspire to will motivate you to accomplish something grand. It will make you feel as if you are taking on the world, which you often will be. Realize that it doesn't happen overnight, but it does happen to great companies. Here is the one question I ask all startups I meet that ask me for in-depth advice: "If you succeed to your fullest extent, how will the world be a different place in five years?"

Your Big Vision Does Not Have A Ceiling

The problem with big visions is that the excitement of this big vision can often cloud the ceiling that it may have. You have to be going after a vision in a large market that has a very high ceiling. You won't get 100% penetration or possibly anything near it, so the market has to be large enough that you can continue going forward. Niche businesses can be nice, but they often lead you down a path of boredom. You hit your peak, make your money, but soon realize there isn't much more left to be done. You do either of two things: get bored, quit, and give up OR you try a new riskier direction. The riskier direction option can work, but it means that your initial business wasn't large enough. Find the big vision within a large market that has a lot of untapped potential.

You Are Ready To Be Selfless

This is a lesson I've recently spent a lot of time thinking about. I think it's one that not enough people talk about and is the most important thing an entrepreneur can know before going full time on a startup. You have to be 100% selfless. It is no longer just about you. You are really last on the totem pole. You have responsibility to more than just yourself or another cofounder. It's such an important piece of the puzzle that it needs to be broken down into three further points below.

You Have A Responsibility To Employees

Everything you do has to have the well being and care for your employees in mind. Every decision you make will have a small impact on your life, but it will have a large impact across the lives of so many others. It might even be 5 people at first, but those 5 people have family members, kids, loved ones, and many more that depend upon them. If you make a selfish or poor decision, it will end up having an impact on a large chain of people. Expand from 5 to 50 then 500 and you are now responsible for the lives of many many people. One of the people working with us hard at Onswipe has a young kid. One night on Skype when we were announcing our plans to expand I saw their kid walk into the room. That moment forever changed my life. I realized I was now responsible for so many more people than myself. If I screw this up, it impacts so many other individuals.

You Have A Responsibility To Customers

Customers will depend on your service working in order to do business and some core functionality of what makes them tick. You need to realize that the decisions you make will have an impact on those customers and their customers. They have trusted a core piece of their business to you. The product decisions and pricing decisions often have an impact on companies. Your customers trust you to perform a function and you need to keep yourself healthy for the long haul.

You Have A Responsibility To Investors

Your investors have probably been pitched by hundreds of other entrepreneurs throughout the year. They chose you and maybe a select few others to go take on the world. You have a responsibility to do well by them. If they are angel investors, they have trusted you with the money they have earned through the same exact hard earned blood, sweat, and tears you are currently going through. If they are venture investors, their job is to pick the best of the best. They have to provide returns to their LPs and also risk their reputations on your company. Yes, many venture backed companies fail, but they will go in expecting the worst, but hope for the best.

Keep in mind, you don't need to hit all of these points. You may just be at the idea stage and be nowhere close to achieving anything listed above. That's okay as I wish I had these points when I started as an entrepreneur. The points in this essay were adapted from a talk I gave at Plusconf. I will be giving a more polished and refined version of this talk at Columbia University in New York City at 7 pm this Friday - Details:

You Should Follow me on Twitter:, Friend me on Facebook:, Email Me:, or even call: 201.305.0552

Slides From The Talk

Posted by Jason Baptiste on Thu, Feb 03, 2011


Really appreciate that someone has addressed all the responsibilities of a business owner. 
It's often said people start their own businesses so you can "be your own boss". This is laughable. I have more bosses as a startup owner than I'd ever have working at a company. 
* My customers are ALL my boss 
* My employees are my boss 
* In some cases, my suppliers count as a boss 
* And on it goes... 
Nice work, Jason!

posted on Thursday, February 03, 2011 at 1:32 PM by Peter Alberti

Awesome article. This article is a must read for any person staring at the entrepreneurship cliff and contemplating jumping into it.

posted on Thursday, February 03, 2011 at 1:35 PM by Daniel Arroyo

Jason, this is a great article. I completely agree with you on the "big vision" point, one that we have heard time and again, or I should say, one that has been missing time and again from pitches I have heard. Thinking of how your company, The StartUp Digest, started and how it continues building, is an excellent illustration of what you presented here. Many thanks on this great post. 

posted on Thursday, February 03, 2011 at 1:59 PM by Thomai Serdari

Thanks, I needed that. For years our company has been a small business, started out a side project. Now we are moving into being start-up/ high-growth business and you are correct, it is a completely new playing field. I'm able to take this step now because of the exact points you mention. 
One thing that is tough is moving from a comfortable business where people have been handing over their dollars to us for years, to something NEW.  
You don't mention it, but one thing we have had to do is get new partners, because the original partners did not sign on for something this risky. That is okay, and we did it amicably, but it is a point to recognize, that the people who were happy to be with a side project/ small business might be too risk averse for a start-up.

posted on Thursday, February 03, 2011 at 2:20 PM by AnnMaria

Nice post, readers might also be interested in my post on Idea Management for Entrepreneurs

posted on Thursday, February 03, 2011 at 2:22 PM by Colin Winter

Great points. I especially like the responsibilities. It's easy to say yes to everything else.

posted on Thursday, February 03, 2011 at 2:28 PM by Aaron Evans

Great post! The timing for me was impeccable. Just started getting the word out on my project to help families organize their home finances. Taking the leap is scary, yet exhilarating. Thanks!

posted on Thursday, February 03, 2011 at 2:31 PM by Derek Stone

Great article. Hit a nerve with me, as we struggled to get that first paying customer; Google Ads excluded. 
It took us 3 years of starvation to off the ground and running. 

posted on Thursday, February 03, 2011 at 2:36 PM by Tom Psillas

Good piece but I think the content doesn't fit the title. "You have a responsibility to employees", "Are you ready to be selfless" a valid considerations, but I would not classify them as indicators that a project is ready to be a start-up. 
Perhaps something like "Considerations on transitioning from project to start-up" would be more appropriate. All valid points though!

posted on Thursday, February 03, 2011 at 2:41 PM by Keith

Inspired, thanks!

posted on Thursday, February 03, 2011 at 3:04 PM by Frank

Adding one more responsibility: Making "Right Choices" includes making choices that will reduce the likelihood of future disputes (dispute avoidance) and/or costly legal battles. Make sure your contracts are comprehensive, that you have appropriate marketing content and notices, and obtain legal and tax counsel BEFORE you "need" to. Failing to seek such guidance, almost always proves to be more costly than the advice and preventative measures.

posted on Thursday, February 03, 2011 at 3:11 PM by Michelle L. Grenier, Esq., Business Lawyer

Very insightful, and so true.

posted on Thursday, February 03, 2011 at 3:24 PM by Daniela Huppe

Business Goul:

posted on Thursday, February 03, 2011 at 4:03 PM by Barry Allen Cook

Thanks for this excellent and encouraging article.

posted on Thursday, February 03, 2011 at 5:01 PM by katrina

Great essay! However, did anyone notice that Facebook likely has failed test #2 which is "you are making revenue" at its very early days in the dorm room ? I guess if we stuck to #2 in evaluating whether to go all in, Facebook would have remained a side project. I suggest that it should be revised to say that you know you can turn on "a switch" to start making revenue with the current venture or are already making revenue.

posted on Thursday, February 03, 2011 at 5:10 PM by Joshua

Thanks for sharing the realities of running a venture.  
The difference between those who own their own job, and those who run a business is very much defined by the 'selfless' factor you have so clearly explained here.  
It's not always pretty, but what you gain in growth makes it all worthwhile.

posted on Thursday, February 03, 2011 at 5:52 PM by Shelli

Good advice for startup entrepreneurs. Most startups go with the idea making lots of money. It is not the case with the startups. Entrepreneur and his/her team should learn to serve customers, suppliers and stake holders of the company and need to show value before a $ in the bank. 

posted on Thursday, February 03, 2011 at 6:03 PM by Srini Vasan

Great article, especially the responsibilities part. 
Waiting now for the next in series: "How To Know Your **Main** Project Is Ready To Be A Startup"...

posted on Thursday, February 03, 2011 at 7:38 PM by Software Candy

As others have already stated, perfect timing. I've been debating on when's the perfect time to throw out the full-time day job and go full blown into my LtL Freight Rate Comparison program. As Jason as stated, I definitely have the vision and passion for my product and how it'll help companies across the country. I am scared though about being responsible for not only myself and my family, but to other people as well as the company will get bigger. But I think that will drive me more to make sure I don't screw up.  
I do worry about being careless/reckless/irresponsible?.?. Here I currently have a full time job that pays me well and I'm just going to walk away from it when other people can't get a full-time job. 
But I believe in my product offering, how it'll benefit so many companies, create so many jobs, and it's something that I truly believe in.  
Keep up the great article writing Jason! I really enjoy reading them and eventually it'll inspire me to give back and help others.

posted on Thursday, February 03, 2011 at 10:07 PM by JJ McGrath

Very nicely put! Although most of the points are 'cliches', but it has been written with a new perspective

posted on Thursday, February 03, 2011 at 10:42 PM by Mridula

Nice Article Jason! Thanks for articulating and sharing your thoughts.  
"The difference between zero dollars and one dollar is huge." 
This is true !

posted on Thursday, February 03, 2011 at 11:16 PM by Rahul

Nice article, having a business model that is scalable is a must. If you had 10 times the business you currently get would you make more profit or would you have to pay huge outgoings to cope.

posted on Friday, February 04, 2011 at 12:41 AM by Mischievous Media

Very insightful and timely advice for the would-be entrepreneurs! The ' Difference between zero dollars and 1 dollar is huge' is the best insight that really hits the nail on the head!

posted on Friday, February 04, 2011 at 4:59 AM by Manish L

There are really more difficult times than good times.  
Great article.

posted on Friday, February 04, 2011 at 10:39 AM by Ajay Golani

I'm not sure you need a Big Vision out of the gate. You just need a vision that's big enough to support your business in your target market. 
Sometimes it's easy to have a Big Vision and easy to see it from the beginning; oftentimes they evolve and become more clear as the business develops.  
I posted on this subject on my blog here.

posted on Friday, February 04, 2011 at 11:20 AM by David Miller

Terrific - a potent message to make you think. The lightbulb moment of responsibility is rarely commented on in business. Thanks for the inspiration. 

posted on Friday, February 04, 2011 at 12:38 PM by Jason Cobine

I may be missing some context here. As I see it, if you have employees, investors, customers - you're not on a side project, you're already on a startup.  
If the context is to help first-timers and young engineers to recognize one or a few compelling inflection points, then I'm in agreement here.

posted on Friday, February 04, 2011 at 7:42 PM by wadenick

The challenge is meeting all of these 8 steps. The article is great I was just wondering what order should they be done? What order do I take to get the ball rolling or should I do all of the steps at the same time?

posted on Friday, February 04, 2011 at 8:12 PM by Dulin

Great read. It's a scary process when you are doing it all on your own.

posted on Saturday, February 05, 2011 at 5:18 PM by Smart Company Software

I'm not sure it has to be a flip of a switch. You can keep a side project a side project until it's grown to be the size you need it to be for it to be your full-time job. This kinda has to be the way you do it if you're a bootstrap startup.

posted on Monday, February 07, 2011 at 4:06 PM by Nick Carter

Great article, really helpful for entrepreneurs about to take the leap! I think the first point is the most valid because if the going gets tough its a lot harder to throw in the towel when you have a passion and love for the company. One thing I would mention though is Market research Although you love your idea, you need to make sure that the potential customers and clients do too!

posted on Tuesday, February 08, 2011 at 3:39 AM by Emily

Interesting how all these "great post" respoonses are actually just trying to post links to their own junky websites!

posted on Tuesday, February 08, 2011 at 9:09 PM by Richard

I think it was very inspirational. Sometimes, you lose motivation but when you read stuff like this it reminds you that you can do it. And you should (stolen from nike) Just do it without caring what else anyone else thinks.

posted on Wednesday, February 09, 2011 at 9:33 PM by Grace Sia

Very well writen article,useful and inspiring !

posted on Saturday, February 12, 2011 at 2:43 PM by Theo

This article clearly outlines the difficulties and amount of effort that needs to be put into a startup. Thank you it was very helpfull!

posted on Wednesday, February 16, 2011 at 8:32 AM by Mrsleepy

I disagree that your employees are your boss. You are the boss, employees are hired for talent, vision, execution, and more but they are not the boss.  
Own your decisions, and own your company. Don't play the win as a team lose as a team game. Win as a team, lose as an entreprenuer. it's your name on the investor sheet, not your employees.  
I think a lot of smart yet inexperienced people start things they believe in but aren't ready to manage. Thinking of your employees as your boss is more comfortable for a new business owner bucause if it fails you don't have to take the full responsibility, but it is the path to failure. Own your failures, OWN your business. Take responsibility, but give praise and engouragement. Anything less in business is kidding yourself. There's a pilot and co-pilot in airplanes for a reason, but only one of them is steering the craft at a time. You can't fly a plane by committee.

posted on Wednesday, February 16, 2011 at 11:05 AM by Shifty

Thanks for this post! It kind of made me think about the project I'm currently working on and whether I would be ready to run it as a startup. And to be honest I wouldn't. But guess that is some sort of eye-opener for me. Still got a long way to go :-(

posted on Tuesday, February 22, 2011 at 7:17 AM by Stefan @ StartupJourney

Great thread. I think that the point about revenue is key. You have to be able to show traction ... it is step one. If customers or users don't care enough about your product in a way that generates real money, then you don't have a business yet, you have a working experiment. Keep working on your experiment until you have signs of a real business.

posted on Tuesday, February 22, 2011 at 8:08 AM by Alex Murphy

Wow! real eye opener. "The difference between zero dollars and one dollar is huge."

posted on Tuesday, February 22, 2011 at 12:21 PM by

Good one Jason.  
I am in full support of your notion that entrepreneurs need to be accountable and responsible for someone other than themselves. For example, my daughter and I are co-inventors of our new product. If I am successful, she is successful.  
I hang out with my daughter all the time - I pitch, she catches on our ladies fastball team (where the invention came from). In fact, we are going to pitch to the Dragons in Ottawa on March 5th!

posted on Wednesday, February 23, 2011 at 10:00 AM by Linda Pond

Nice one.....I really do agree with u and also believe that love wat u do, dont do anything jst for d sake of doing it, as if something goes wrong its not only u yourself who wud be affected, but many, many more people lined with u.

posted on Thursday, February 24, 2011 at 2:46 AM by Kenil Satra

Excellent comments for any start up - software or otherwise. I just watched several hours of back to back Dragon's Den episodes and can see the application of many of the points you make. Well done!

posted on Saturday, February 26, 2011 at 2:11 PM by Donna Neumann

Really a fantastic one! 
Even though it might be projected that big success has come accidentally, I agree with you that those folks would have definitely had big vision about the same.

posted on Sunday, February 27, 2011 at 10:37 PM by AnujaK

Great read. thanks

posted on Wednesday, March 02, 2011 at 5:50 AM by Dean Smith

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