It’s hard to stay hungry when you’re milking a cash cow. Plus it’s boring to work for a legacy product that seems to magically manufacture money, even if you’re getting paid more than the industry average.
James Hong ran into this problem with HotOrNot.com, a website he founded in 2000 that had $4 million in sales three years later. Hong, at that point, was still only one of two employees. But he’s gotten bored and wants to do something new with the site now.
At first, he was afraid. Why change something that’s working well enough? It’s tough to give up a guaranteed income of X million each year, he says. Finally, he writes, “It seemed obvious what to do. It’s like going to Vegas, putting a dollar on the table, and winning $100. What do you do next? You pocket $80 and let the last $20 ride on another, bigger bet.”
So he turned the S-corporation into a C-corp, slashed employee salaries in exchange for stock options and started hiring.
And it seems to be working:
“Suffice it to say, I am feeling hungrier (and broker) than ever. It’s an interesting thing because it’s valid to point out that I have some money in the bank. But the truth is, when I first started entrepreneurship, I had nothing to lose. That made being an entrepreneur easier. Now I am gambling the largest asset I have, meaning now I have a LOT to lose. I’ve never felt this level of pressure before, and I have to say, it can be pretty nerve wracking at times.”
Get his thoughts verbatim from his weblog.