An open letter to tech workers facing layoffs, from someone who was laid off from a tech company over a dozen years ago
I'm a small business owner who runs a small web design and marketing company that I started over fourteen years ago after getting laid off. Okay, it's a little more complicated than that: I was a marketing director at a construction company and got laid off in 2009 during the height of the real estate recession. Then I started a web design and marketing company.
But I had never run my own company before so I had no idea what I was doing. I tried really hard to make ends meet, supporting my wife and four kids, and a mortgage. We struggled hard for a year. I got a few clients and was surviving, but it looked like I was going to lose my house and life had become unpleasant. So, when I got a full-time job offer as a marketing manager for one of my clients (which was a VC-backed software startup), I shocked my wife and friends by immediately taking it.
I figured that working at a larger company that had the financial backing of billionaires—yes, that's "billionaires" with a "B"—would make it a safe place to land. So after a year of full-time self-employment, I re-entered the workforce and got a bona fide j-o-b as an in-house employee with bosses, team meetings, paydays, a retirement fund, healthcare coverage, and everything. After struggling so much, it seemed like the wise thing to do.
At first, it felt good. It felt secure. I was glad to have a regular paycheck again. But then, just 10 months later, without any warning, on a random Tuesday morning, our CTO called an "all hands" meeting and told us they had not gotten the most recent round of funding as expected and would be laying off 35% of the company. Immediately.
Oh no. I thought. This couldn't be a good thing: I was one of the most recent hires, so I was sure I'd be on the chopping block. And I was right: about an hour later, I was unceremoniously collecting my personal effects from my desk, saying goodbye to the remaining staff, and trying not to cry.
When I walked in the front door at about 1:00 pm during a workday in the middle of the week with all my stuff in a cardboard box, my wife took one look at me and knew exactly what had happened. I didn't need to tell her. The only question was: "Well, now what?"
I pondered the thought for a few hours, and it all boiled down to one decision: did I want to look for another job again, for the second time in two years, or did I want to go back to being self-employed?
I absolutely dreaded the thought of job seeking and interviewing and enduring the insulting, dehumanizing punishment that the hiring process is. So I decided to just go back to being self-employed.
It was a good choice. I contacted one of my clients from the year before and said "Hey, remember that website project you and I talked about doing before, but we never got around to doing it? Want to restart that conversion? ...cause I'm baaaaaack!"
It worked. I met with the client that same day and had a check in my hand before the day was out. It's been a wild, crazy roller coaster ever since, with lots of zigs and zags, and surprising turns, but I won't bore you with the details. Right now, I'm just here to say that I'm still here, and I'm still in business, even as we approach the year 2023.
So when I've been looking at all the news about giant tech companies having massive layoffs, I can't say I ever worked for Facebook, or Google, or Microsoft, but I can say "I know how you feel," at least to a certain extent. And while self-employment is not for everybody, if you've ever thought about starting your own company, I'd encourage you to take advantage of the opportunity now if you can.
So here's a list of things I wish I knew when I first started my company after getting laid off from my tech job. And if I could advise my younger self about the road ahead, here are some of the things I would say.
Things I Wish I Knew When I Was Laid Off From My Tech Job
#1: Becoming self-employed means you can never get laid off ever again!
Of all the things I like about being self-employed, my absolute favorite is the fact that being my own boss means nobody can ever lay me off again. It's an absolute delight to know that no matter what happens, I can never be called into someone's office to be told "we're letting you go." It's literally impossible for me to get fired.
Now, that's not to say that I can't get fired by a client, or that certain clients may become deadbeats and not pay their bills... but clients are easy to get. Employers are very, very hard to get. You can always replace a client with another client. It's extremely difficult to replace your full-time employer with another full-time employer.
#2: All you need is ONE paying client in order to get started.
When I first started my company, I had exactly one client: an HVAC contractor. That was all I had. I literally had one client. Their needs were very small, and I finished the project in about two weeks.
Obviously, one client is not enough to keep a business running. But you know what? One client is enough to start a business. Right as I was finishing that first project, I got a phone call out of the blue from someone at a nonprofit organization who said that my client had suggested he reach out to me.
Bingo! Referrals! That was the secret. On and on this went, and one client turned into two, then four, then eight, then ten, and now... far too many to count. But it all started with just one.
#3: If you decide to start your own business, mine your personal network for all it's worth.
When I got laid off the first time, I had something like 830 contacts in my phone's address book. My Blackberry Curve (alas, I couldn't afford an iPhone yet) was filled with the names of people I knew and who knew me. So what did I do? I started contacting them, telling them I had started my own business and was open to work.
Most people didn't have a need for my services, but they told me they'd keep me in mind if they heard about any opportunities. And because I wasn't spamming strangers, but reaching out to real-life people I knew and cared about, they actually did keep me in mind. And they started sending me business.
I contacted a real estate agent I knew who didn't need any help with his website or marketing. But he referred me to a title insurance agent I didn't know. It turned out he didn't need help with his website or marketing either, but he referred me to a different real estate agent I didn't know, who didn't need help with his website or marketing either. But a while later, he referred me to a custom home builder who absolutely did need help with his website and marketing.
So looking back on my initial efforts to reach out to my friend in real estate: that was a phone call worth making! It just took a while. So I ended up with an excellent client who loyally paid my bills for several years, and ended up paying me tens of thousands of dollars in a very beneficial relationship. But when I first met him, I didn't know him from Adam. He was literally a friend of a friend of a friend.
There are still people to this day I work with even now that I can trace back to a few choice emails I sent and phone calls I made over a decade ago. That's amazing.
You want an action item for yourself right now? Call and email every single person you know that you think might be able to send business your way, or who might know someone who can. Really: make 10, 20, or 50 calls before the week is out. Make a goal to email 100 people by the end of the week. (Note: by that, I mean individual emails, sent one at a time, addressed to each specific person... I don't mean you should blindly blast out 100 emails at a time to everybody in your address book. Don't do that).
You might be amazed at how fruitful the ensuing conversations can be.
#4: Diversify your client base as much as possible, and quickly.
As I mentioned, everybody I knew when I got laid off the first time was in construction. Because all the people I'd met and interacted with at that job were people who swam in the same circles we did. They were all members of the housing and building association and they all worked as plumbers, electricians, and HVAC companies or other businesses that were still at least tangentially related to homes in some fashion.
What's wrong with that? Well, when housing recessions (like the real estate recession of 2008) hit, it affects everybody in the industry. Let me tell you: it's really hard to try to pitch your marketing services to a carpet and flooring company when absolutely nobody is buying houses and therefore has no need for carpet and flooring.
These days, I'm fortunate enough to work with a very diverse client base. The clients I run the gamut: plastic surgeons, criminal defense attorneys, nonprofits, city governments, golf clubs, custom glass cutters, and more. Probably the strangest one I've worked with recently was a company that makes weather balloons for atmospheric research. None of them are in the same "bucket" as any of the others. And this is good.
Why? Even though most people in the business consulting world seem to be obsessed with telling freelancers to "niche down," and only to serve an extremely narrow-but-deep slice of the market, I don't agree with this, and I never have.
When COVID-19 hit, for example, I knew some companies in the web design and marketing world that specialized in serving clients in the restaurant industry. Whoops. Can you imagine working at a company that only serves companies in one specific industry that is completely shut down? I was very, very fortunate that I had no clients in the food service or restaurant industry and therefore wasn't nearly as affected by the massive impact of COVID.
#5: You now need to learn how to run a business, not just "perform your craft."
No. You can't. There is no possible scenario where that will work.
One of the biggest mistakes I've seen (and I've seen it many, many times over the years) is how some people think that the skills they had at their last job (and, often, the skills they learned in college) are going to be what will make them money when they're self-employed.
I've been running my own business for many years, and let me tell you: I have never met a person who only does what they did before as a freelancer. To say it more precisely, if you were a "Back End Engineer" who spent all day writing Python at Facebook for 10 hours a day, you're not going to be doing that if you become self-employed. No, you're going to be spending the majority of your time creating proposals, sending out invoices, marketing your services, writing contracts, tracking your time, analyzing your profitability, and, sometimes, writing Python.
The biggest skills you're going to need as a freelancer are not knowing how to upgrade a MySQL database to make it compatible with PHP 8.0. It's going to be things like sales, customer service, marketing, financials, and project management: and if you have a degree in computer science—especially if you have a degree in computer science—the likelihood that you learned any of those things in college is probably nil.
So get busy. Learn how to drum up business, close a sale, keep good clients, fire bad clients, grow your business, do good work, get paid, and somehow continue to educate yourself so you can stay abreast of all the exciting changes in your industry, in addition to all the other things you have to deal with.
#6: Make sure you work for money—actual, real, cash money—not equity, stock, "exposure" or any other dirty tricks.
One thing the corporate world has probably taught you is that you can accept a lower compensation than you'd like by accepting equity, ownership in a company, or maybe performance bonuses or commissions. If you go into business for yourself, you need to forget all of that.
When I worked for a tech company, I had the option to buy company stock that "vested" after a certain period of time, blah blah blah. But I never put a single penny of my own money into the company because I didn't trust the company. I think my distrust was proven entirely valid when I was laid off without notice after less than a year on the job.
Perhaps if you work for Google, Amazon, or Facebook, you don't have that problem. They've proven their ability to give out meaningful stock options and equity in the company that translates into real dollars and cents. That's fine.
But in the world of self-employment, this does not exist. Really. I cannot tell you the number of times over the past decade and I half I've been told by a client "We don't have a lot of money... but if you work with us, think of the exposure you'll get!" Or the number of times I've been offered company ownership or a percentage of sales.
Do you know how many times I've actually said "yes" to these deals? Only once. I don't trust almost anybody further than I could kick them, and I've been kicked to the curb by more than one employer, so call me extremely cynical, but I don't do it. I have one client that I have a commission arrangement with, and that's only because I've known this person for almost 20 years and I trust him. With everyone else, I say "no."
When you go into business for the first time, if you don't have a long, distinguished portfolio, sometimes people will look at you as a potential risk. You're not proven yet. It was easy for you to take orders from your boss, but can you deliver an entire project on your own? Maybe, or maybe not.
So some people might approach you and promise you a slice of the pie if you work for less than your hourly rate, or if you work for free. Don't do it. When you're self-employed, money talks and cash talks loudest.
There are many potential clients who came up with creative arrangements over the years that I chose not to work with because I didn't trust them, the deal was too complicated, or I wouldn't have had any recourse if things went south. I'm still in business today; several of those companies are not. I think that's a good lesson learned, and I didn't have to learn it the hard way.
#7: Learn when to say "no." It's FAR more important than saying "yes."
"No" is my favorite word in the English language. It's beautiful. It's so much better than "yes" for more reasons that I can count right now. Get used to saying "no." Start practicing it by writing it out, and saying it out loud. Go head: try it. "No." Doesn't that feel good?
When you become self-employed, people are going to ask you to do weird things. They'll ask if they can pay you after you've done the work. Say no.
They'll ask if you can send the final proof to their 22-year-old daughter who is going to college and "really has an eye for this kind of thing." Say no.
They'll ask if they can pay you when they get paid by their clients. Say no.
On and on I could go... but I'll leave you with this final thought: new business owners seem to have an overwhelming sense of insecurity and feel like they need to say "yes" to anybody and everybody who asks. If you get weird requests for things you don't want to do, or if people ask you to do things that are contrary to your business model, just say no.
You'll regret saying "no" far less often than you'll regret saying "yes." I promise. At least that's true for me, and, so far, every other entrepreneur I've ever met.
So dear tech worker who recently joined the ranks of the unemployed: I hope you either find another job, like many of you will, or start your own business like I did. It can be rewarding if you're careful.
Let me know if I can help you at all.