The company I co-founded has been doing data-science consulting since 2015. Between projects, we worked on a SaaS product idea I’m very passionate about: Fanfare aims to help independent content creators earn a living on the Internet. Our first feature seeks to demystify, simplify and speed up the process of creating social media content for podcasters.
In May 2021, I reduced my salary from USD 110’000 a year to less than a quarter of it, USD 2’000 a month. And while I risk that my Swiss passport walks out in protest (Switzerland doesn’t really enjoy the concept of less money as a society), I have good reasons:
I reduced my salary to have more equity since I needed to raise less money.
I reduced my salary to signal our investor and the team that I am serious about the company I want to build around Fanfare.
I reduced my salary to force myself to focus on what makes the most sense strategically for the product.
I reduced my salary to have skin in the game.
I consider myself privileged to be able to do this. My previous income allowed me to put aside enough to live two years with this income. I still have health insurance, live in NYC, pay for a gym membership, and get iced coffees. And if those savings run out, I still have a rainy day fund and parents that would support me.
Reducing my salary does directly impact my daily life, obviously: I eat out in restaurants less often, can’t afford expensive holidays, and live in a cheap apartment. I also can’t put money in my savings account, but that probably puts me in good company in NYC, independent of income.
I do think it is possible to earn well and be laser-focused entrepreneurially. Once the company is more mature, I hope to have a good salary without losing focus. However, I found it impossible to start a new company while still earning like a salaried employee. I think this has to do with the fact that a new business requires a lot of activation energy. Once you’ve started and are up to speed, a bit of comfort will not be detrimental and is necessary for the long run.
The reasons for this step and how I implement it are specific to my personal context. But I think there’s a general lesson here: If you’re in a comfortable position, make sure that this comfort is not keeping you from focusing on what you really want. Because a bit of temporary discomfort might be what you need to get started.
I plan to periodically document my journey of building Fanfare. If you’re interested in seeing how this plays out, follow me on Twitter🦜.