Depending on who you talk to, the bubble is either already here, or it’s not coming at all.
I say screw the Tech Bubble, it doesn’t matter if you have a plan.
No, I’m not living in some fantasy world where my life is somehow insulated from the realities of the stock market, Moore’s Law, and the social networking phenomena that now have every VC scrambling to file their S-1 before the public figures it out. But having lived through the last tech bubble, I realized something incredibly important a number of years ago.
You are the manager of you.
Not the company you work for. Not the school you’re at. Not the career you’re stuck in. You are in control of whatever you want to do.
Your reaction to that statement says a lot about your personality. If you thought that’s laughingly obvious, then you probably manage your career fairly aggressively already. That’s awesome. You can skip a few paragraphs.
For some people, this is a terrifying possibility and they’d rather remain safely in their cubicles, hoping they still have a job in 6 months after the next round of layoffs happens. The very act of having to make hard choices on a recurring basis really scares folks. The economic uncertainty of a tech bubble brings these sorts of fears to the surface and you’ll either look at them long and hard, or bury them quickly and get back to your job.
I’m definitely not a cubicle hider. And after this post, I hope you won’t be either.
My good friend Ted once told me, “[Your current situation/the economy/the company] is what it is. Control what you can. Start with yourself.” And so I ask you this very critical question:
If the tech bubble happened today and you ended up losing your current job, what’s your Plan B?
Do you even have a Plan B? If not, don’t despair. I have some tried and true suggestions below you can explore to decide what best fits your personality. There’s no one-size-fits-all solution. But you ought to have something in your back pocket, just in case.
Plan B #1: Join a startup/Create a startup
What it is: Startups are small companies with aggressive product development and marketing timelines attempting to capitalize on new, untapped, or underdeveloped markets quickly using novel technologies or solutions where others have failed previously. A startup’s main aim is to “go big or go home”, meaning they want to have a major liquidity event that will make the founders and employees very wealthy.
The good: Startups offer really interesting experiences building products from scratch and often bringing them to markets where people didn’t know they needed something this badly. But if the company is successful, you’re in on the ground floor with shares and probably a very strong role in the company’s decision making process. Maybe even a three letter acronym after your name.
The bad: High failure rates. Long hours. Possible burnout. Startups are traditionally funded through venture capitalists, although this isn’t a strict requirement. Eventually, though, VCs become involved before the “big day” and that can lead to friction.
The ugly: The Dot Com Bust. Smoking craters of companies when the founders didn’t know how to bring a product to a market, or listen to their customers to find out what they really wanted. People who lose their last paychecks because the company went under.
What you need to prepare: If you’re coming from a “safer job”, you should keep a cash reserve (3-6 months if possible) to either front-load or back-load your landing, depending on the company, the timing and your risk tolerance.
Why it might not be for you: Startups are often heavily populated with young, single folks. There’s a reason for that. Make sure your personal situation is a good cultural fit before you start counting those shares up.
Plan B #2: Start a Micro Business (Lifestyle Entrepreneur)
What it is: A Micro Business is a small, one-person enterprise where you are in charge of everything: development, marketing, customer support and taking out the trash. The idea of a Micro Business is to grow large enough to support yourself, but not necessarily grow to excessive size for the sake of growth.
The good: Micro Businesses can scratch the itch of wanting to be on your own and make something, but without the need to get large amounts of outside funding from venture capitalists since the end goal is different. You can start a venture like this “on the side” without having to quit your job outright and possibly continue to manage it while working the “day job”. Patrick McKenzie is a famous example of how to run a business on 5 hours a week.
The bad: Possible burnout. Long hours if you have a day job plus a side venture. If you try to do it all without some kind of plan, like outsourcing some tasks, you can get overwhelmed quickly.
The ugly: If you fail to validate your ideas properly, you can waste tons of time and money on a “pet project” with nothing to show for it.
What you need to prepare: You’ll need three things–an idea (or product), some cash and time to build it, and some very careful vetting of whether that product/idea has any traction with a market. The third item is the hardest and the most overlooked of the three. Some resources like the Micropreneur Academy or Bob Walsh’s 47 Hats can help you tremendously.
Why it might not be for you: If you have a hard time motivating yourself to work on things at home or are easily distracted, you may not be successful with it. If you don’t want to learn all aspects of the business (sales, marketing, support, development), then you’ll have a hard time getting to paid customers.
Plan B #3: Become a Consultant
What it is: Consulting is basically selling your technical abilities on a per-hour/per-day/per-job basis. Most people who get into it find their first customer from a previous job who needs their services when they’ve left to work for someone else. I’ve talked about the challenge in becoming a good consultant in a previous post.
The good: Consulting is very lucrative. If you want to see an instant jump in your income, research comparable rates for your planned skill set and find some customers willing to pay it.
The bad: The first customer is usually what hooks people into the consulting gig. But finding that second customer always proves harder than you think it is. You need to constantly network and be on the lookout for the next gig. If you leverage headhunters, be prepared to take a cut in your rate.
The ugly: Everything is now in your lap: estimated taxes, health insurance, business licenses, managing payroll, buying equipment. That first year can be a big sticker shock for tax penalties if you haven’t planned ahead.
What you need to prepare: A solid marketable skill set, a positive attitude, a potential first and maybe second customer, confidence and a willingness to get things done where no one else succeeds before you. Have a 3-6 month cash reserve when you start out so you have a runway between paying gigs if you need it.
Why it might not be for you: If you hate to network, market yourself, or constantly stay on the lookout for a new opportunity, consulting might be a difficult nut for you to crack beyond that first gig. If you lack a solid network, the time between gigs may be long and very unprofitable. If you don’t like negotiating contracts, you may be taken advantage of at some point.
Those are three suggestions I’d make and clearly I gave them very light treatment here. But the real question is, what’s YOUR plan now? What are you going to do to realize that plan?
The tech bubble may be real, but you don’t need to let you future happen to you, make it happen for yourself.
Did I miss something? Sound out below!