Layoffs have made this a scary start of the year for tech workers in Silicon Valley. But might this actually lay groundwork for these laid-off workers to take a different direction in life—one that might lead to them owning a business of their own?
The data shows that indeed that might just be the case.
Tech giants that reaped massive stock price gains in the first two years of the COVID-19 pandemic have been falling back to earth over the past 12 months. The stock drop has led many of the world’s largest companies to start trimming.
Within the past week alone, Google and Microsoft laid off about 5-6% of their workforce, which translates to more than 22,000 jobs. This comes just a few weeks after the likes of Amazon (18,000) and Facebook parent Meta (11,000) announced their own cuts. West Coast companies were hit hardest, while Midwest layoffs accounted for only 1.4% of the total, according to Layoffs.fyi.
But it shouldn’t be all doom-and-gloom if you’re a worker in the tech field. In fact, if you find yourself now among the ranks of the laid-off, now may just be the perfect time for you to break out on your own and create the next great company.
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Tech workers turned entrepreneurs are uniquely qualified to start a business given their background in programming, engineering and software development, among other analytical skills.
Christopher Fong, a former Google employee, recently told Reuters that experience in Big Tech gives founders a “strong brand that can be leveraged to meet investors, potential customers, and recruit team members.”
Many people don’t start a business of their own because they’re afraid to leave their corporate (and, more often than not, their well-paying) job.
But at this moment, not only do you not have a job holding you back, you may even have significant severance to support you and your family while you start up a business.
While it’s never a good thing to see so many people out of work, a massive amount of creative and technical potential is bubbling at the surface right now.
As ABC News succinctly put it: “Mark Cuban was fired from a computer store because all he wanted to do was sell and work on computers, instead of sweeping the floor like the owner wanted. Today, he is an Internet billionaire and owner of the Dallas Mavericks.”
There’s a market or a product just waiting to be disrupted. Will you be the one to do it?
Steps To Take To Start A Business
- First, make sure you are clear of any conflicts and non-compete clauses with your previous employer.
- Vet your idea and craft a business plan.
- Consider starting “virtually” with very low cost – hire other tech colleagues that have been laid off as freelancers that can contribute and reward by limited cash compensation and focus on equity sharing as incentive.
Securing Your Funding
Once ready for funding, consider special sources of funding for laid off tech workers. Reuters reports $37.4 billion was raised last year in so-called angel or seed rounds, in line with the record level seen in 2021, according to data from research firm PitchBook.
In 2015, the aforementioned Fong launched Xoogler, a project designed to help former employees hoping to start their own companies. The group now has more than 11,000 members.
It’s scary to be fired or to be out of work, but what you do next is critical.
“Leaders constantly find themselves in the headlights of trepidation, be it the fear–of bankruptcy, of securing an upcoming proposal, or of a merger/acquisition,” says business coach Ratish Pandey. “Therefore, accepting your fear and understanding how to approach it is crucial. The idea is not to appear fearless but to convert your fear into a catalyst.”