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.
23 thoughts on “How Getting Laid Off Led Me To Double My Salary and Follow My Entrepreneurial Dream”
This was a great read John, thanks for putting it out there. Finance Night/Dinner is something I’m going to steal for the future.
Thanks buddy. Inspiring to see you building your thing too. And I definitely recommend Finance Night!
Great read. . .and a good story. I follow you on twitter and wondered why their was such a sudden shift.
I’ve been laid off before so this article connected with me. I definitely retained some bitterness, and I am gun shy about ever going back to a corporate life that can change on a whim (I guess it can for an entrepreneur too, but, still).
I will say, you handled this better than 99% of the rest of the world. . . you really hit the ground running.
Thanks for the comments, Steve! Glad to see that you’ve landed on your feet as well!
Being laid off can be a huge blow and but you handled it extremely with such class! Glad to see that it has enabled you to do more and be happier.
Excited to see you continue to succeed 🙂
Cheers Benjamin. Great to see you at State of Search in November!
Sometimes you see energies coming from different directions that leads to that extra push we all need to be able to start on our own. Glad that you shared your story, I definitely can relate!
I manage an entrepreneur, design, and innovation thinking program at a secondary school in Hong Kong with deep roots in China. We are always looking for excellent guest lecturers to discuss project management, creation process from ideas to execution, as well as lessons in business thinking and life success
If you want to fly me to China to guest lecture, I’m happy to come 🙂
Great write up! Thank you! Just made it through my first year. Bad break up with a business partner who had not worked in the business for ten years but collected six figure salary. I offered a buy out to him but was duped and was left with no severance. Share were lost due to a clause in contract. Ten people followed me and we started up in a warehouse storage space. I was on a treadmill for certain and had a great team. Paid off line of credit and had nearly twenty client follow. The anxiety and sleepless nights were intense but adversity shapes your character like nothing else. Thank you for lifting me up with this article
Jim – so glad to hear it lifted you up, and also that you had a rough go this year. But congrats on hitting the one year mark!
It was great read. Can I ask how much was your salary at Trulia ? You said your severance package was generous. How much was it if you don’t want to mention salary ?
Hey Wing – I’m not going to say exactly what it was, but it was six figures easily. My severance was my salary through the end of 2015, so essentially 3 full months paid severance.
Cool story, thanks for sharing. Eight years ago, getting laid off from a job I didn’t enjoy (understatement) was one of the best things to ever happen to me. It gave me a form of permission to start my own business, and I haven’t looked back since. For the right type of person, losing a job is the perfect entry point to life as an entrepreneur. Congrats.
I completely agree, John. And sometimes it’s the kick out of the nest that we need. For others, I always hope that companies are good to them and give them at least a month of severance so that they can find a new job and land on their feet. This is also why I think everyone needs to be saving as much as they can so that they have a fund that they can draw from if needed (or if they just want to quit and move on). I wrote about that here – https://medium.com/@dohertyjf/renaming-the-emergency-fund-6b6675936a72#.vat8t4bxc
I thought it said “How Getting Laid Led Me To Double My Salary and Follow My Entrepreneurial Dream” – you got me pretty excited until I started reading 🙁
Now that would be some clickbait, wouldn’t it?
Thanks for your insight on the topic. I was recently laid off in September last year. Not for quite the same reasons (there weren’t enough billable hours I’ve been told), so I can relate to the internal struggle (was it me? was it really because of hours? why didn’t my boss say anything about billable hours?, did he even care about me?, etc.) I’ve since then found a new job (better) and have started doing my own thing on the site (fully invested this time) at bite-sizedmedia.com.
Thanks again for the insight and love your blog, btw!
Rachel – thanks for reading and for the comment! While I’m always sad to hear that others get laid off too, I’m always heartened by stories like yours where it’s also been a blessing in disguise. Best of luck with your new endeavors!
Thank you! You as well!
Thank you I’ve added to my library
That’s so inspiring for me!!.. Even I had been laid off recently and now in bitter moments..your article is really helpful for me
Thank you so much
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