Update: thanks for all the amazing reactions to this post! I have loved reading all of your emails/tweets/direct messages and hearing so many stories about people who have been laid off and it turned out to be a blessing in disguise. If you want to check out my company Credo, it’s right here.
I got laid off in September of this past year, somewhat unexpectedly. Things had been rough for a while as I moved to a new team internally after an acquisition and we tried to figure out how we supported my new role. Right after I moved over to the new team the GM in charge of that team left, which at the time felt like an omen and I came to realize later it was. When you lose the person who advocated to bring you to a new position, who has the vision for how that role will look, you’re going to be in for some hard challenges that you might not be able to win.
Today I want to talk about exactly the steps I have taken over the last few months that have led me to double my salary short term, which is how I am currently financing my software marketplace which is also growing substantially month over month.
I Dove In
The day of my layoff was a blur. I had just returned from a 17 day trip to Europe with my wife, so I was jetlagged but also relaxed. In hindsight, this was probably the best day for me to receive the news, because had I received while I was frustrated or stressed out I would likely have reacted differently.
As soon as I was able to process what happened and talk it over with my wife, I got a good night’s sleep. That was Monday night. It took me a tiny bit longer than usual to fall asleep, but I slept deep that night because of jetlag. Once again, probably a great time for it to happen because that long flight from Paris to Dublin to San Francisco had really exhausted me.
The next morning, I did couple of things:
- Sent an email to a group of friends letting them know that I was no longer at Trulia
- Changed my LinkedIn profile
- Tweeted a brief “Announcement: no longer with Zillow/Trulia. Figuring out next steps and looking for a few consulting clients.”
I decided that morning that I wasn’t going to hide from the fact that I was no longer with Trulia. I had an internal struggle about how open to be about the fact that I was laid off for non performance reasons, which was largely driven by the fact that I had a bit of bitterness and didn’t want to be unfair to people because of my own emotions. Now, four months down the road, I’m not shy to say that I was laid off because it’s a part of my company Credo‘s story.
I talked to a few friends that day who counseled me to “take some time” and “figure out what’s next.” In hindsight I see what they are saying and maybe would have been well served to do a bit more reflection, but I had just returned from a 2.5 week vacation. I was ready to get back to work! The plan I formulated in Europe, to figure out how to get more time to work on my company while not yet leaving my job, was now the best thing I had in front of me. I knew I didn’t yet (if ever) want to go work for someone else to build someone else’s dream, so the option was to give my own ventures a go for a while.
I Connected With People
I got laid off on Monday afternoon. Tuesday morning I did the three things mentioned above. Very quickly I was inundated with consulting leads, people wanting to discuss my next steps (and to see if I would come work for them), people wanting to outsource some of their agency work to me, and offers to have coffee. I received more “If you need anything let me know” emails, tweets, and DMs than I could ever handle. I’ll never forget the text messages I received from two friends the day after, both of which said a combination of “Congrats!” and “It’s about damn time you do your own thing.”
That week was one of the most humbling of my professional life. I connected with so many amazing people who I had honestly lost some contact with over the previous two years, which felt amazing as I greatly value my network of friends, colleagues, and peers (and I’m lucky that many of them are all three).
Connecting with all of these people made me realize three things:
- I was not alone and wasn’t crazy to be thinking about doing my own thing
- There is a lot of marketing work out there and I’d continue to be able to pay my half of the household bills
- Lots of people have been laid off and it has always turned out to be one of the best things that ever happened to them because they rebounded and leveled up.
Over that week I was able to connect with people like Graham Hunter, who I had meant to meet up with for almost 2 years since I moved to San Francisco. Meeting him opened up doors to guest lecture at Tradecraft, which has connected me with more amazing people in San Francisco. I’m still looking to expand my network of first time founders with some years of work experience, but this was instrumental in pushing that forward.
One big takeaway from this week is this:
There is not as big of a stigma around being laid off as I thought. People instead are more interested in what you’re doing now.
I Figured Out My Financial Runway
At some point you have to get very real about your finances, and I recommend that you do this sooner rather than later and then update your projections every month or so. Depending on your situation, you may want to do it every two weeks.
I was very fortunate in two ways:
- My wife is very practical and is not stressed out about money like I am, so she had a level head about it to help me figure out my financial runway.
- The terms of my layoff were very generous so that automatically gave me some months of runway, and longer than usual if we could cut back on some expenses.
Figuring out your runway doesn’t have to be hugely daunting, because depending on how you’ve set up your personal finances it can be very easy. We have many different bank accounts for different reasons (taxes, saving, longterm savings goals like a house, various 401ks and retirement investments) as well as at least two credit cards each. So we have more various types of assets than a lot of people, but we connect it all to Mint.com. Once per month we review our finances from the previous months and adjust budgets as we need to. We call this Finance Night and cook a fantastic meal at home, so it’s turned from a dreaded night (for me) into something I almost look forward to.
Anyways, figuring out your runway can be a very simple formula.
Your cash on hand after taxes / how much you spend per month
I knew that I had about 4 months of runway, but that wasn’t going to get me to where I needed to get with my business so I needed to expand that. I was a consultant a few years back and so knew that I could go back to consulting. I had my first client signed within two weeks, and within 6 weeks of being laid off I had a total of 4 clients signed. With that consulting work done, I’ve been able to extend my runway by another couple months.
As I said at the beginning of this step, for me I had to figure out my runway so that I knew what to expect. I would have been stressed out and setting myself up for failure if I didn’t know how long I had before I had to start thinking about generating income again to pay the bills. By knowing how long I had, I was able to start formulating a gameplan that would help me reach my goals as an entrepreneur.
I Biased Towards Action
Now I had the beginnings of a plan. I knew two things:
- I wanted to build the Credo (then called HireGun) product and see if it had the potential that I believed it had
- I needed to pick up some consulting to extend my runway
Your plan may look very different depending on what you want to do with your career so I won’t go too much into the specifics as trying to tell you what to do next won’t apply to your situation necessarily. That said, I am a huge believer that those who do are the ones who win, so the most important thing is that you start doing something.
My gameplan was:
- Work on my website so that I was proud to go to it and felt that it looked professional enough for people coming to it who did not know me to trust it
- Follow up on consulting leads sent to me and close a bit of consulting work to take some of the stress off of me
- Figure out what the first big iteration would be of the product and figure out the launch plan
Within two months of leaving Trulia, I had accomplished the following:
- Signed 3 consulting clients and had a fourth close to closing (which closed mid-December)
- Fixed the site, built out consultant/agency profiles, and did a big launch on Product Hunt/Inbound.org and a few other places
- Spent a day or so brainstorming further iterations and product features, then started conversations with other marketplace entrepreneurs and my ideal customer to learn what would be of most value to them. Prioritized the list off this and began building towards that.
- Grew revenue from $80 in September to $6000 in January. I made my first $10k and believe that if you can make $10k online with a product, you can make $100k.
Getting Laid Off Can Be A Blessing
Getting laid off was a bit of a shock, but as I look back on it I am grateful. I am grateful because even though I didn’t have the guts to take the leap myself, I still had to make the leap and have learned how to start a business and turn it into something that has the beginning signs of traction and being valuable to many people online.
Some people have asked me why I chose to do my own thing as opposed to going back to work for someone else. The answer for me is that I have wanted to try doing my own thing for a long time and this was the right time to do it. I suffer from the usual entrepreneur mindset of thinking that I am always right, so maybe I need to see that I am not always right and have it only affect me. And finally, I don’t want to be in the position again where someone could tell me that I no longer have a paycheck. If I don’t have a paycheck in the future, that’s because I didn’t make it happen.
So my advice for anyone who has been laid off, is afraid they will be, or is contemplating leaving their job is this:
Start now thinking about what you think will make you happier. Start planning how you will get there. This will likely mean gaining a new skill set, learning your current income and personal burn rate (and thus runway), cutting back on expenses so you can save a financial runway, and preparing emotionally to no longer identify yourself as an employee (if you want to be an entrepreneur) or to no longer see your current coworkers every day.
The entrepreneur life is exciting and stressful. Getting laid off sucks. But if it happens to you, as it did me, know that you are capable and strong and will be able to come out the other side.
If you want to chat about any of this, please shoot me an email at john at getcredo dot com. I love hearing from other first time entrepreneurs or people with ideas.