TIME Startups

Here’s How Startups Actually Start Up

Startup office
Hero Images—Getty Images/Hero Images

Explained in plain English

There’s a sucker born every day — or so they say. But the way startup fever has been spreading across the land, it almost feels more like there’s a Zuckerberg being born every day. And that feeling is real. According to data from the Kauffman Foundation, 2015 has marked the first year startup activity has been on the rise since the Great Recession. In fact, it’s soaring — the numbers show we’re living through the biggest upswing in new companies, products, business deals, and jobs in the past twenty years.

That makes it sound like now is the perfect time to bring your million dollar idea to market — but how is that even done?

First off, begin by casting aside any fears that you can’t make a dent in the tech universe with little computer prowess. “We’re seeing more and more people enter the tech space because the definition of tech continues to grow,” says Michele Markey, vice president of Kauffman FastTrac, a global network of advisors helping entrepreneurs launch and grow companies. She’s seen everything from medical devices to mobile apps launch from Main Street as much as Silicon Valley, and that’s a trend many expect to continue.

There are many million and billion dollar companies for a startup to model itself against, but there’s no one true formula for success. Still, the majority of buzz-worthy businesses have conducted these tried and true practices along the way.

1. Eying the competition

It may not sound as exciting as a weekend-long hackathon or a giving a flashy presentation to a bunch of investors, but the reality is that most startups live and die based on early research. Scoping out the competition is vital to understanding where there’s an opportunity to make a move. This can involve everything from dissecting competing products to improve upon their designs or simply mapping out their locations to find a new way to reach underserved customers.

And there’s always competition to scout; few successful startups create an entirely new product or service. Apple — the ultimate garage-to-giant success story — didn’t invent the personal computer, digital music player, smartphone, or tablet computer. Instead, it waited, watched, and eventually released gadgets that capitalized on the deficiencies of products already out there.

2. Finding and defining customers

Markey says startup founders also conduct research by hitting the bricks and talking to would-be customers about their ideas. “A smart entrepreneur needs to figure out where their sweet spot in the marketplace is,” she says. “Who is that customer that’s going to use the product, pay the money, and maybe be the repeat user?

Figuring out this information on a broad scale can involve hunting down perspective customers’ demographics and learning everything they can about them. This sounds like it could be an expensive proposition, but the truth is all an entrepreneur needs to get this data is a library card. ReferenceUSA, a database to which many local libraries subscribe, has historical business information dating back to 2003, making it a good place to gather demographic data.

3. Shoring up intellectual property

Padlocking your product or service with an array of patents, trademarks, or copyrights can sound terribly dull, but the truth is it’s one of the most important steps to ensuring a budding company’s success. Without these protections, a competitor can swoop in and copy an idea without having to pay a dime for all the hard work done until this point.

“Issued patents may be used to stop competitors from entering the field and to recover damages for any infringement that occurred,” writes attorney Michael Kasdan in this excellent intellectual property explainer for startups. In addition, he writes, patents can protect a startup from getting sued for patent infringement by someone else.

Trademarks, meanwhile, help protect the company’s branding, from logos to mottos, to ensure that copycats can’t use a business’s image or likeness to sell imitation wares. With knock-off products coming in from China or being replicated with 3-D printers, startups are smart to trademark their image early to fend off the phonies.

And finally, startups are also wise to copyright their reproducible works. Whether it’s an paperback, and e-book, or even an image, if it can be duplicated, it should be protected. That may sound like a publishing industry problem rather than a startup issue, but as TechCrunch noted last year, it only took four hours for copyright law to crush one particular startup’s dreams.

4. Hire some help

Visionaries can’t build a business from the ground up alone. Sooner or later they’re going to need to enlist some outside assistance. Dave McClure, founding partner of accelerator 500 Startups, has said a triumvirate of talent including hustlers, hackers, and designers are typically what’s necessary to turn a new company into a success. Hustlers pull the strings to make the product pan out financially, whether that means being a silver-tongued salesman wooing investors or a master networker making behind-the-scenes deals. Hackers, especially for tech products, are the people who roll up their sleeves and get elbow-deep in coding a computer-related product or app. Designers, meanwhile, take that glob of code or computers and put a shiny shell around it to make it intuitive to use.

5. Figure out the finances

In step number four, this once lean, one-person dream has evolved into a fully-functioning company, complete with employees to pay and mouths to feed. But in order to do that, the company will have to spend money. And while there’s no shortage of ways that people can get creative with their finances, there’s only a few major ways that startups typically find the funding to survive step number five.

First, they can “bootstrap.” As this self-sufficient term implies, bootstrap funding comes from within the company, whether that’s from a well-heeled founder or through maxing out a team’s credit cards. Personal loans can also come into play here, too. The key here is that boot-strapping founders (or co-founders) retain full control of the company, and if the venture is a success, they also get to reap all the rewards.

Another way to help pay for resources is to work with an accelerator or an incubator. These organizations will lend a startup access to facilities in exchange for a percentage of equity. However, spots are limited and competition is tight, so founders need a compelling idea, a lot of potential, and some whip-smart talent to get accepted by these programs. One of the most well known incubators, Y Combinator, typically offers $120,000 in exchange for a 7% stake of the company’s ownership. Similarly, TechStars, a leading accelerator, has a standard $118,000/7–10% offer.

The primary difference between incubators and accelerators is that the former is a slower, more nurturing environment aimed at developing long-term success over a period of years, while the latter aims to get startups to launch much more quickly and profitably within a span of months. And these are just two of the ways startups get money — from angel investors to funding rounds to silent partners, there are many more.

6. Survive the launch

While none of the above steps are absolutes, there is typically one truth about startups until this point: They are in stealth mode. Keeping efforts as quiet as possible can be key to taking the world by surprise. But once they reach launch day, it’s time to make some noise. Here, social and conventional media are key to turning heads and generating interest, whether that means promoting an app or an Armenian restaurant.

But while so much work has gone into the effort to this stage, this is only the beginning, a truth that some startups don’t handle very well. “It has to be way more than just a really great product,” says Markey. “You’ve got to have the right messaging, the right branding, the right value proposition in a very noisy and crowded marketplace.” And sometimes entrepreneurs underestimate that, because they’ve become myopic and enamored with their brilliant product.

As a result, the reality is that half of all small businesses fail by the time they reach their fifth year, says the Small Business Association, and only one-third make it to year 10. Then again, those numbers don’t reflect the entrepreneurs who were able to build something wildly valuable and sell it off to an even larger company for a big score. So, don’t let the numbers weigh down your dreams, but work hard to make sure they pencil out.

Read next: 6 Lessons From the Rising Startup Leaders

Download TIME’s mobile app for iOS to have your world explained wherever you go

TIME Travel

‘Airbnb for RVs’ Launches Nationwide

Winniebago Camper Van
Andrew Watson—Getty Images/Lonely Planet Images

Embrace your inner Airstream

Have you ever wanted to take an RV on a camping trip without having to actually own an enormous vehicle? Do you own a $90,000 RV that spends 11 months of the year languishing in your driveway? Then the startup for you has just gone live.

Outdoorsy emerged from its beta stage in California and launched nationwide on Thursday. In the words of co-founder Jen Young, the company is a “a community-driven marketplace for renting RVs directly from local RV owners, making sure everyone has access and opportunity to get outdoors.” The company currently has 2,300 RVs listed on the site, with about 75 more being added each day. Options range from low-fi models for $65 a day to full-on glamping machines for nearly $650 a day.

Co-founder Jeff Cavins says that the owners might not be the fanny-pack-clad grandparents you’re picturing. Of the 16 million registered RVs in the U.S., the average owner age is 48, he notes, meaning that these are people still working full-time, perhaps putting kids through school, folks who can likely use some extra cash for an expensive commodity otherwise lying idle. According to the Recreational Vehicle Industry Association, the average RV owner is only out and about in their land cruiser for three weeks out of the year.

That makes RVs ripe for collaborative consumption, getting more out of things already filling up the world instead of drumming up demand for more things. So far, Outdoorsy’s average rental has been for six days, which has added up to about $2,400 total, or $400 per night. The price, Cavins says, is often puffed up by renters adding options ranging from paddle boards to BBQ kits. And even at that price, it might be an affordable option for groups and families, given that cost includes transportation (minus gas), lodging and some entertainment for what could be six people. Young says the freedom to be spontaneous with a vacation rather than meticulously planning out a trip is another key selling point.

Cavins says that current options for renting RVs from companies are like impersonal “bowling shoes.” And he emphasizes that, unlike Craigslist, their marketplace for peer-to-peer rentals provides insurance coverage for both parties, as well as a cashless payment system.

Outdoorsy takes a cut from the RV lender, about 15%, and they charge the renter a service fee of about 10%. That’s money they may use to help the listers with their photography or other practices that boost their profiles, much like Airbnb quasi-trains their hosts in how to treat and please their guests.

“The founders are most excited about building this company because it will decrease waste,” says Young. “It provides an opportunity to be enterprising to people who never would have thought something they owned for their own enjoyment could provide financially life-changing benefits.” And for everyone else, it—at the very least—provides more reasons to say the word Winnebago.

TIME Careers & Workplace

These Are America’s Top 10 Small Cities With Thriving Businesses

Getty Images

Experts say businesses in smaller towns tend to experience higher revenue with lower cost of living

Think your business has to “make it” in the Big Apple or Chi-Town to pull in big dollars? Think again.

Top lines thrive in small cities, according to a report released today in a partnership between personal finance site NerdWallet and Entrepreneur Media. In the study, analysts reviewed 463 cities with populations from 50,000 and 100,000 to find some of the best climates in the country for entrepreneurship.

The analysis looks at business environment, reviewing average revenue per business, the number of businesses, and the percentage of businesses with paid employees. Researchers also studied economic factors like annual income, housing costs and unemployment rate data from the U.S. Census.

Careful review of these factors drove cities like Alpharetta, Georgia, with a population of approximately 60,000 to the top of this list. Other top small cities include Redmond, Washington and Wilmington, Delaware.

The takeaway for entrepreneurs? Keep your costs to operate in mind. While the average revenue per business among the top ten largest cities by population (New York City, Los Angeles, Chicago, Houston, Philadelphia, Phoenix, San Antonio, San Diego, Dallas, San Jose) is $1.4 million, that metric was nearly 3 times higher for the list of top ten small cities (shown below), at $4 million.


“Contrary to popular belief, you don’t have to go to a big city to succeed,” says Cindy Yang, a researcher and head of the Small-Business Group at NerdWallet. “While bigger cities have more businesses, they don’t have bigger businesses. It’s the businesses in smaller, surrounding towns that tend to have higher revenue and a higher propensity to have paid employees while enjoying the lower cost of living.”

For its part, top-ranked Alpharetta offers a strong-for-its-size business density, with 15 businesses per 100 people, in a town with just more than 60,000 in population. (New York City, for contrast, has a population of more than 8 million, and boasts 11 businesses per 100 people). The Georgia town’s average revenue per business is also steep, at $6.9 million.

Ground-level initiatives like the Alpharetta Tech Commission (ATC) have lured hundreds of tech companies and startups, according toCrunchbase. The city’s also home to McKesson’s Technology Solutions division, specializing in information technology for hospitals and physician’s offices.

Peter Tokar, economic development director of Alpharetta and president of the ATC, says the expansion of the GA 400 highway in the 1990s helped transform it into a hotbed for tech. Easy transportation led to the development of a powerful grid infrastructure and thus, a fast fiber-optic network. This paired with a high-end suburban life “drew tech companies to the city like a magnet,” according to Tokar.

Strong local economies and easy access to a larger city’s resources are also important for businesses in small cities to thrive, says Yang. Eight of the top 10 small towns are within an easy commute to major metros like Atlanta, D.C., Seattle and Los Angeles. “This allows small businesses there to operate in a close-knit community that often has a lower-cost of living,” says Yang. Meanwhile, businesses in these tertiary towns can still capitalize on top-notch technology, infrastructure and of course, more affluent customers of neighboring hubs.

This article originally appeared on Entrepreneur.com

More from Entrepreneur.com:

MONEY Startups

Check Out This Business That Does Nothing But Give Away Free Stuff

And drives around New York City in a pink truck to do it.

When a friend told Anna Monzon about a pink van in New York City where she could win valuable free prizes, she was intrigued. “I love free stuff,” says Monzon, a 25-year-old commercial real estate agent who lives on Manhattan’s Upper East Side.

So Monzon began entering the contests, run by Claim it!, a New York City startup. First she’d enter a random drawing using the Claim it! app from her mobile phone. Then she’d hope for a text message on her mobile phone on a Sunday evening telling her if she won the drawing.

She got lucky and snagged several prizes. “The first thing I won were Beats headphones,” she says. “One time I won Air Jordan sneakers. I don’t wear them, so I ended up selling them on Craigslist.”

To pick up her prizes, there was one condition: She had to find the van—which changed its location in the city each day—and watch a short commercial. (She’d find where the van was parked from the company’s app.)

Monzon had plenty of company when she showed up: So far, the app has close to 100,000 users, according to Ali Abdullah, a former senior product manager at Google who started the now nine-employee business in December 2014.

Claim it! operates only in New York City and gives out prizes ranging from $25 Shake Shack gift cards to GoPro cameras. Revenue—as well as the prizes—come from advertisers who, Abdullah explains, appreciate that contestants have a 100% rate of viewing their 10-to-15-second commercials. Advertisers include P&G and Unilever Brands, Abdullah says. (He declined to say how much revenue the company brings in.)

Currently, prize winners must pick up their goodies at the van, but in the third quarter, Claim it! plans to start partnering with retailers. Users will be able to collect their prizes at retail stores, too. Recently, Claim it! did a test run at Crumbs Bake Shop, and has secured a variety of retail partnerships, he says.

Read next: From Trap to Table: Luke’s Lobster Serves Fresh Maine Catch

Abdullah came up with the idea for Claim it! after a period of joblessness, when he lost his family’s home to eviction and ended up living with friends. At the time, he says, his relationship with his girlfriend was strained and the only thing that brightened his days was receiving gifts in the mail from retired NBA star Al Harrington, whom he had befriended through Harrington’s sister, a friend. Among the gifts were a pair of LeBron James sneakers. “I had this idea: ‘These sneakers are extremely valuable’,” says Abdullah. “Should I wear them or should I sell them?” In dire need of cash, Abdullah sold that particular pair of shoes to the manager of a local store.

Eventually, Abdullah got back on his feet, found a contract job as a web applications engineer at the Clinton Foundation. But the spark of excitement he got from receiving the prizes in the mail stayed with him.

Influential investors have decided he’s onto something. Stephen Sadove, former chairman and CEO of Saks Fifth Avenue, bought a small minority stake in the business in 2014. Sadove met Abdullah at a business event and was impressed by the vision the entrepreneur showed in early demos of Claim it!

“My world was retail,” says Sadove. “I was interested in different technologies that could disrupt retail in some way. People like getting things for free. I listened to his thinking and the idea that people would view a short video to get free things. It was a very interesting concept. I decided to invest and advise him.”

Another investor is Harald F. Stock, president and CEO of ArjoHuntleigh, a medical device maker headquartered in Malmo, Sweden. They got to talking about Claim it! when Stock was having a beer in a bar near Manhattan’s Columbus Circle and Abdullah was sitting nearby, working on his computer. Stock found the entrepreneur’s approach compelling.

“On one side he’s very down to earth, very grounded, able to communicate and network very well,” says Stock. On the other, Stock says, Abdullah has impressive technical knowledge and visionary thinking. “That’s a rare breed,” says Stock.

Read next: How to Make Sure Your Small Business Outlives You

MONEY Small Business

Startup Makes Money By Giving Away Free Stuff

Claim It! lets users win prizes just for watching a 15-second ad.

When Ali Abdullah was homeless a few years ago, he was struck with the brilliant idea that would lead to his current, thriving company, Claim It! Free stuff makes people happy, so he would build a business around giving away free products that people actually want. By watching a 15-second advertisement on the Claim It! app, users are eligible to win prizes ranging from lip balm to pricey headphones. Investors understood the power of this business model, and he’s raised millions, including a six-figure contribution from just one investor.

TIME People

Uber Wants Your Parents to Be Drivers If They Can Use a Smartphone

senior woman hands on steering wheel
Getty Images

The new economy is welcoming older Americans with open arms

“Companies don’t hire 50-year-olds. They just don’t.”

So says 50-year-old Sherry Singer. After decades of being a professional matchmaker, Singer wanted to change gears and start a non-profit, but still needed to pay the rent in L.A. Feeling she had few places to turn in the traditional job market, she looked to a more disruptive space: the booming on-demand economy led by Uber. Singer, who has now worked several of these freelancing jobs that didn’t exist a few years ago, found she could land a gig within a week.

Agism might be rampant in Silicon Valley, but some of the Bay Area’s leading companies are now actively trying to engage the senior crowd, recognizing the huge potential of experienced workers and responsible adults.

On Thursday, Uber announced a partnership with Life Reimagined, an organization under the AARP umbrella that exists to help older people figure out “what’s next?” after life transitions. The same day, Airbnb released data aimed at “celebrating” older hosts and guests, amid their executives attending summits on aging around the country.

“To overlook them participating in new activities would be really short-sighted,” says Airbnb’s Anita Roth, who attended a recent conference on aging hosted by the White House.

When these companies were startups that didn’t know how long they might survive, being short-sighted may have made sense. New tech companies have been started by young people who hire their young friends to help create solutions to problems they’re encountering in their own young lives. Their first customers are often their young, early-adopting friends who live in the Bay Area. But with valuations north of $25 billion, these “startups” are focusing on expansions into a more untapped demographic, which also happens to be huge and growing.

By 2032, Americans over the age of 65 will outnumber those under the age of 15. While bands of young companies are starting to pay more respect to the buying power of this demographic, Uber’s new effort is about recognizing their potential as workers. Life Reimagined bills itself as a helping hand for any adult in need of some direction—whether that person is a 42-year-old divorcee, 55-year-old empty nester or 66-year-old retiree bored nearly to death. Their mission isn’t just about helping people find new jobs or careers, but that’s often involved for participants who range from their late 30s to early 70s.

“The reality is there are far more adults looking for work than venues that are seeking to hire them,” says Emilio Pardo, Life Reimagined’s president. Their effort with Uber is explicitly targeting the “40-plus” crowd. The rideshare company said they don’t have a particular goal for how many drivers they hope to recruit.

Uber already has hundreds of thousands drivers coming onto their platform worldwide every month and expects perhaps another hundred thousand join their ranks in the U.S. over the next few years. Still, says Uber executive David Richter, they need to actively recruit. “We have the high-class problem of ever-increasing demand,” he says.

Uber previously engaged in targeted demographic outreach by trying to sell veterans on becoming drivers. The theory was that many veterans are task-oriented, disciplined and also looking for a healthy outlet “to bring those traits to bear,” says Richter. Those drivers turned out to get higher-than-average ratings; Uber hopes to repeat those results by capitalizing on older drivers who might provide a “more cautious, reliable ride.” According to a white paper released in January, Uber drivers are more likely to be young, female and highly educated than taxi drivers or chauffeurs. Still, about half of them are already over the age of 39.

What about the stereotype that grandma is a haphazard driver who goes everywhere with her blinker on and can operate a smartphone about as well as nuclear submarine? Ken Smith and Martha Deevy, experts from Stanford’s Center on Longevity, generally have a positive attitude about older people driving for Uber, saying that the flexibility those jobs provide will likely be attractive to retirees who need income but want flexible schedules. They also point out that if age 40 is the starting point, that means “there are 30 unambiguously safe years there.” If you look at fatal crash statistics, they point out, you could argue that getting into a car with a 65-year-old is safer than doing so with a driver who is less than 30.

Smartphones are required to do the job of being an Uber driver—as well as most new jobs in the on-demand economy—because it involves accepting and completing requests for rides through the Uber app. Just over half of 50- to 64-year-olds own smartphones, according to Pew, but those numbers are going up. In 2012, only 34% of them did. And, Richter says, new drivers can always lease a smartphone from Uber if needed.

The Center on Longevity is a leading organization dedicated to trying to figure out how Americans can all lead better, longer lives, a crucial mission given that our life expectancies have jumped 20 years since 1925. Airbnb worked with the group to develop a survey to learn more about their older users. Turns out, about one million of Airbnb’s guests and hosts are over 60. Considering 25 million people used Airbnb to find accommodations in the past year, that leaves a lot of room for growth, especially among a demographic that is more likely to own their own home. Like Uber’s veteran drivers, Airbnb’s older hosts also tend to get better reviews than the general population, Airbnb says. The majority of those hosts are either retirees or empty-nesters who start renting out rooms for the extra money; according to Airbnb’s survey, 49% of them are on a fixed income. But, Roth says, many people who come to the platform for the money end up staying for the social engagement and “renewed sense of purpose.” Isolation among older Americans, Life Reimagined’s Pardo says, “is fatal.”

Of course, the sharing and on-demand economies are not without their uncertainties and pitfalls. Lawsuits are alleging that companies like Uber are exploiting their workers, and cities like San Francisco are hotly debating how much home-sharing to allow. Though 50-year-old Singer continues to work for an on-demand ride company, she’s also a lead plaintiff in a class-action lawsuit against Postmates, an on-demand delivery service for which she used to be a courier. The business models of these companies may have to change, but the fact that companies can benefit from giving older Americans more opportunities and attention will remain. “People are in a moment in America where either they can’t retire, don’t want to retire or they’re retired but they’re not done yet,” says Pardo. “It’s all about using the latest technology to actually open up a new opportunity, to give you options.”

TIME Amazon

Amazon Creates Startup Service To Find The Next GoPro


The company wants to be the go-to retail platform for emerging products.

Amazon is offering a new service that will make life easier for start-up founders. Amazon Launchpad, announced on Tuesday, creates an “Amazon Launchpad store” that will showcase start-up products and provide the makers with marketing and distribution support.

Start-up products featured in the store include the Soma Sustainable Pitcher and Plant-Based Water Filter, Rumpl High-Performance Indoor/Outdoor Blanket, Casper Mattress, and eero Home Wifi System, among others. So far, the store boasts more than 200 products from more than 25 accelerators, crowd-funding platforms, and venture capital firms.

“We…know from talking to startups that bringing a new product to market successfully can be just as challenging as building it,” Amazon Vice President Jim Adkins said in a press release. The Launchpad aims to smooth over that process by taking care of order fulfillment and customer service for start-ups. As a part of the launchpad, start-ups can offer their Amazon Prime customers free shipping.

“Amazon Launchpad gives customers access to a dedicated storefront featuring a variety of innovative new products from emerging brands. For startups, we handle inventory management, order fulfillment, customer service, and more, allowing them to focus their efforts on the innovation that results in more cool products,” Adkins said.

MONEY Small Business

How to Start a Business Without Quitting Your Day Job

chef hat and fedora hanging on hat rack
Sarina Finkelstein (photo illustration)—Getty Images (2); Alamy (1)

And meet a bunch of folks who pulled it off.

Bill and Lauren Elward both held demanding full-time jobs when they started their online business, Castle Ink, a Greenlawn, N.Y.-based operation that sells remanufactured inkjet cartridges, laser toner, and ink refill kits. At that time in 2005, Bill was doing web analytics and marketing for the College Board and Lauren was a high school English teacher. Both were avid recyclers and wanted to build a business that tapped into that passion, but they weren’t willing to give up the security of steady paychecks.

Instead, they worked on the business at night and on weekends, sinking $5,000 from their savings into getting their website up and running. By 2007, with cash flow from the business picking up, Lauren, who was pregnant and on maternity leave, decided to quit her job.

Thanks to some smart decisions to outsource tasks such as order fulfillment, content development, and social media, she now is able to run the business in just a couple of hours a day and care for their two children, ages six and eight, without outside help. Bill, who now works for the finance site Bankrate, puts in about five hours a week on weekends or on the train ride home from work.

Their approach has paid off. Castle Ink broke $1 million in revenue in 2012, and even with the market for its cartridges softer today, it still brings in $250,000 to $500,000 in annual revenue, says Bill. Meanwhile the couple still reaps the stability and benefits from his job, such as his health benefits and 401(k).

Many would-be entrepreneurs fantasize about telling their bosses to shove it, but small business owners don’t always quit their day job right away. Research by Gallup in 2014 found that among startups under a year old that have fewer than five employees, only 38% of founders live on what they earn from the business. Fifty-four percent support themselves with another job during the first year. The picture changes later, when they are two to five years old. By that time, 51% make enough money in their business to rely on it as their main income and 44% are still relying on a day job.

Still, it’s not easy to start a business while remaining employed elsewhere. Beyond the issue of sheer stamina, entrepreneurs have to be careful not to jeopardize their current job. Here are some tips on how to navigate a launch while you’re still on someone else’s payroll.

Know what you’ve signed. Remember that sheaf of paperwork HR gave you when you started your job? Check your file cabinets and make sure you didn’t sign any agreements that prevent you from moonlighting or a non-compete agreement that will prevent you from launching your business for a certain period—and get legal advice if necessary. When in doubt, look to pivot a bit from the work you do now, since many employers will balk if you seem to be going after the same clients. “Try to find a different market than your current company is going after,” advises small-business consultant Crystal Stranger, president of 1st Tax in Honolulu and author of The Small Business Tax Guide.

Make the most of business travel. If you work long hours at your day job, it may be hard to squeeze in time to work on your startup when you finally get home. Cincinnati entrepreneur Bill Fish found a solution when he co-founded an online marketing company, Text Link Ads (now known as Matomy SEO) in 2001. At the time, he was spending every other week in Austin or Houston, Texas, for his job and had down time in the evenings to devote to his startup. “I was able to work on my business the vast majority of the time while I was traveling,” he says. “I was away from my fiancé and didn’t have anything else to do.”

The time he put in gave the company a running start, and the company grew to the point it was acquired by a private equity firm in 2006. Fish opted to stay on to run the company, and by the time he left in 2012, he says it hit $25M in annual revenue. Since then, he has moved on to another startup, ReputationManagement.com, an online guide where he is co-founder.

Turn your employer into a client. Finding clients before you quit your day job will help you build the cash flow you need to make the leap. Often, the best place to start is your current company. “I’ve had a lot of clients who are able to change their existing jobs to consulting and get paid as 1099 workers,” says Stranger.

Koel Thomae, founder of yogurt company Noosa in Bellvue, Colo., used a similar strategy. After leaving a position at former employer IZZE, a beverage maker, in 2008, the natural food industry veteran secured a consulting gig from a former colleague. Thomae, who had no children at the time, typically signed off from the consulting project at 5 p.m. and shifted to working on Noosa in the evening, often until 1 a.m.

“It allowed me to make enough money to contribute to my family but it also gave me the level of flexibility I needed,” Thomae says. “If I had to go to a meeting with the health department, it gave me this very flexible schedule to kind of do it all.”

By 2010, she had officially launched Noosa and it took off quickly, thanks to all of the advanced legwork she had done. Today, Noosa employs 100 people and the business is on track to generate more than $100 million in revenue, she says.

Sock away what you earn. If you’re making money on top of your salary, it’s tempting to splurge on extras, but Fish recommends banking all of it. At Text Ad Links, he and his partner lived on their earnings from their jobs while launching the business, which freed cash to reinvest in the startup. His advice: “Prepare not to take a single dime out of the business for 12 months,” Fish says.

Greg Van Ullen used a similar approach at OMilk, a Brooklyn, N.Y.-based maker of dairy-free milk that he co-founded with his wife Julie in 2011 and that today is sold in stores such Whole Foods in the Northeast. At the time he was doing online marketing for the charity Smile Train. After introducing the product at a local flea market and seeing immediate demand, they launched a home delivery service. For the first five months, Van Ullen did the deliveries himself but found it taxing to juggle with his job—in part because the milk last only eight days. “I was losing my mind,” he says.

Finally, he realized it was time to quit. “In my own situation it was easy to make the call because we didn’t have enough time to actually produce our product to meet the demand—which is a really good situation to be in,” he says. “It let me know that if I made this leap and did it full time, I would be able to sell it. It made me feel a lot safer.”

That’s not usually a how entrepreneurs describe the startup experience, but as his experience shows, living on the edge isn’t the only way to launch a successful business.

Read next: ‘How Not to Go Broke When Starting Your Own Business

TIME Careers & Workplace

7 Reasons to Pursue Entrepreneurship

Getty Images

"For others the freedom and flexibility that comes with creating and owning one’s own business represents the ultimate satisfaction"

BusinessCollective Logo for Web

Question: What is the main benefit of entrepreneurship that traditional career paths don’t offer?

The Ability to Create Your Own Destiny

“Entrepreneurship can be very rewarding. You can create your own hours and make your thoughts a reality. We now employ 10 people and we are still growing. I love looking around the office and seeing how collaborative everyone is. It feels good to know that I have created a working environment that people love.” — Courtney Spritzer, SOCIALFLY

The Ability to Positively Impact Your Environment

“The ability to impact the marketplace and see your ideas manifest into tangible services and products that add value is perhaps the most fulfilling benefit of being an entrepreneur.” — Damian A. Clarke, DAC & Associates

The Opportunity to Work How You Want to Work

“There’s no line manager to tell you when you can’t take a day off. There is no red tape to sidestep, or a procedure for anything. You’re not bound by corporate planning left over from the eighties. Systems are new, unfettered and modern. Things work, and there’s no one but you to say otherwise.” — Ben Gamble, See Through

The Chance to Learn Under Fire

“In a traditional job, you are generally only responsible for one bucket of activities. In a startup, you’re able to wear a lot of different hats and learn quickly by doing it. It’s an MBA from the School of Hard Knocks and shouldn’t be underestimated.” — Lisa Curtis, Kuli Kuli

The Freedom It Offers

“From my perspective, the main benefit of entrepreneurship is the freedom it offers to create and grow a business that’s owned (fully or in part) by you. Traditional career paths tend to lock people into a certain role or industry for years, which works for many. But for others the freedom and flexibility that comes with creating and owning one’s own business represents the ultimate satisfaction.” — Michael Rheaume, SnapKnot Inc.

The Flexibility to Be Your Best

“The main benefit of being an entrepreneur is flexibility; flexibility to work as hard as you want, make as much money as you want, work the schedule you want and sell the product/service you want. How smart and hard you work will determine how much flexibility you give yourself. Entrepreneurship is not for those who need the structure of a 9-to-5 job and a job description.” — Steven Newlon, SYN3RGY Creative Group

The Ability to Love What You Do

“Before taking the plunge in entrepreneurship, I always thought whether I would find a job that I really loved. Now, I work harder than ever before almost on a 24/7 basis. And I absolutely love what I do. I look forward to the every day in office. Loving your job is key to success and entrepreneurship is a sure way to make you love your job.” — Ashu Dubey, 12 Labs

BusinessCollective, launched in partnership with Citi, is a virtual mentorship program powered by North America’s most ambitious young thought leaders, entrepreneurs, executives and small business owners.

This article originally appeared on BusinessCollective

TIME Startups

Meet ‘Jet,’ the Startup Taking On Amazon and Costco

Jet Jet

Jet promises to deliver the web's best price on more than 10 million products

Finding a good deal online isn’t all that difficult. But finding the best deal? That’s a much tougher hill to climb. Still, from President’s Day through Black Friday (and Prime Day, apparently), people scour the web to find the lowest prices on whatever they’re buying. This must-save mentality also drives Jet, a massive new startup opening for business on July 21. Jet promises to provide the lowest prices on everything it sells. And if that’s not enough, depending on the options you select while shopping, you can get your goodies even cheaper.

According to Liza Landsman, Jet’s chief customer officer, the company is able to reduce prices by eliminating e-commerce inefficiencies that have developed over the past 15 years. “Oftentimes there are a lot of hidden costs in e-commerce, and a lot of them are bundled into the cost of packing things into multiple boxes and shipping them long distances,” says Landsman.

Jet works by having a big network of partner merchants in addition to its own warehouses full of items. As a shopper add items to his or her online shopping cart, the company works away in the background, determining the most efficient merchant for that particular sale. Jet’s goal is to ultimately find the fewest number of suppliers who will ship your order the shortest possible distance.

Take, for example, toilet paper. As I write this, a 12-count package of Quilted Northern ultra plush costs $6.49 on Jet, a price that matches Walgreen’s and bests Amazon’s $8.29. But once Jet factors in its efficiency modeling, the price drops by another $.39, down to $6.10. But if you already had a box of Kleenex ultra soft tissues in your shopping cart (with its own price whittled down to a web-best $3.48), the Quilted Northern price drops further than before, now ringing in at $5.93. But forget the napkins. If you need something a little more niche — like a 2-inch chrome trailer hitch, a stovetop hood, or a sprinkler head — the toilet paper savings spring back to just $.39, because these products are likely coming from different merchants.

Still, while it may sound like a corporate tag line, the rule on Jet tends to be: the more you buy, the more you save.

This is just one way the company looks to reduce the price of its products. Other ways to save include choosing a less expensive form of payment, like debit over credit, or waiving the right to return a product, which is something you’d do for toilet paper, perhaps, but not electronics. “All those costs we pull out of the system, we pass back to the consumer in the form of greater savings or lower prices,” says Landsman.

So, what’s the catch? Well, to get in on this savings bonanza, you have to become a member. That puts Jet more in competition with price clubs like Costco than Amazon. For $50 a year, members get free shipping on orders over $35, free returns (unless they opt out of them), and a guarantee that they’ll save as much as the membership fee or they’ll get the difference refunded to them. In its beta testing with real-world customers (which is how I have access), Jet has estimated the average household will save $150 per year shopping through their site.

As a new dad who’s knee-deep in diapers, baby formula, and other bulk goodies, I was skeptical over how much the site would save me over Costco. I’ve done my homework, worked my budget, and short of extreme couponing was getting the best deals I could find. But after plugging my shopping list into Jet, I was quickly humbled by the savings my shopping cart was showing.

In fairness, it wasn’t an apples-to-apples comparison (or, rather Kirkland to Huggies). But the cost of diapers, for instance, was similar at the start and then became gradually more disparate as I piled on other household staples. Throw in the fact that I don’t have to fight for parking, wait in lines, it will be delivered to my door, and there should be fewer boxes than Amazon orders — this dad is sold.

But there are things missing from Jet, and I’m not just talking about free samples of sausage and spicy mustard. Frozen foods are a big draw for price clubs, and Jet doesn’t stock these kinds of products — at least not yet. Landsman says fresh food is something the company will add to its offerings after launch. But she also points out that once they go live with it, customers will receive an unexpected benefit. “You don’t have to buy the five-pound-jug of mayonnaise to get those good savings,” she says.

That said, browsing for other items, like a baby bike seat, yielded just three results, with two of them being the same product, just priced differently. Landsman says that as the company prepares for launch next week, there are still products being coded, and categories like sporting goods aren’t where Jet would like them to be. They better get them there fast, because Amazon packs more into its listings every day.

But in an effort to take away some of Amazon’s sales, Jet is offering a free three-month trial membership once the service goes live. There’s some speculation that if Jet is successful, it might trigger some sort of nuclear pricing war between it and the incumbents. If that’s the case, the winner of that battle should be us shoppers.

Your browser is out of date. Please update your browser at http://update.microsoft.com