How do serial entrepreneurs such as Kevin Systrom and Jack Dorsey sustain themselves while working on a project that doesn’t yet generate cash-flow?
Unfortunately there is no magic involved here. In the two specific cases you mentioned, one had made money from his previous startups, and the other had paying jobs at Google and Nextstop.
Typically serial entrepreneurs are serial because they have successfully exited from Startup One before beginning Startup Two, and they use the first one to fund the second. If not, and they have neither savings nor parents to help them out, they need to find a paying gig (either a traditional job, or a revenue-generating lean startup such as Travis Corrigan describes) to fund their living expenses while they get the next startup off the ground working nights and weekends.
Once the startup has some traction, if both the idea and the entrepreneur are really good there is the possibility of raising seed capital from friends, family, fools or angels, in order to fund the company until it either gets to break-even (Square has $100m in revenue!), or (like Instagram or Twitter) explosive customer growth that can eventually be monetized.
*original post can be found on Quora @ : http://www.quora.com/David-S-Rose/answers *
Written by David S. Rose
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