The investor aversion to part-time key employees and their side gigs has been a problem for me. I was told when fundraising for a past venture that I was uninvestable because of the side hustles. The investors wanted to see the core team all-in (and handcuffed to the success/failure of the investment in a venture.)
I understood that and have generally been biased to advise founders on focusing and avoiding distracting side hustles. Yet, I self-justify the plate spinning as a way to extend the runway on projects and survive as well as the network value.
That said, after trying a couple of experiments with part-time gigs helping other startups and personal experience in the past when I was forced to focus at times and give up a myriad of community projects and side gigs, I’m now generally in the camp of believing the core teams needs to be all in and 100% focused on one thing, not juggling during critical execution. Yet early on when there is no revenue and no investors I know that is unlikely to be realistic or possible. Later as the business model is solidified and business processes are stablized; then, its more likely fractional roles and side hussles are easier to manage.
My current advice then is split recognizing the transitions that happen in a startup.
- Juggle To Search – During the early “Search” phase of customer discovery, validation, and MVP iterations; unless the founding team is working off of savings and personal investment, it is going to be necessary to “keep the day job” and work with a side-hustle group of team members. It is a challenge during this phase to keep everyone focused and dealing with the impact that other activities will have on an individual’s avaialble and ability to contribute in-synch with the others. The cost is in time and delays in progress. The benefit however is not wasting too much investor money or equity during this early phase when most ideas should die before too much investment.
- Focus to Launch and Scale – During customer creation of launching and company building of scaling there is a point where focus is necessary. This is likely also at the point when there is initial momentum to capture and investor funds to leverage. The problem maybe that all the business systems are not all working at the same rates and need the same level of focus, but at this point it can’t be hobbled by people with a side hussles that get in the way and delay other’s progress or early customer satisfaction. Key people need to be all in, with no excuses. (This also includes in establish companies, periods of new product launches and major business system transformation with the risks and need for focus of a startup.)
As a company begins to stabilize, it is likely that creating defined fractional roles and seeing more side hustles and juggling will again be practical. In some cases, it will even be necessary as key people keep a core activity on track and are working on new initiatives or expanding the company’s external engagement roles.
Full-time or part-time focus on a startup is a difficult decision personally and when selecting team members. The early honeymoon of fractional roles in developers and popular roles such as a CFO makes it seem like it works. Still, over time I’ve found it only works at the proper stages of a company’s development or transformation, and there are times when there is no substitute for focus.