How to recover after getting laid off
Don't just rush into another job search
With tech companies seemingly announcing layoffs every week, a lot of talented people in our industry are finding themselves unexpectedly out of work right now. I know how it feels — I’ve been laid off twice in in my tech career; the first time was in 2002 during the nuclear winter of the dotcom 1.0 crash; the second time was in early 2020 when the company I was working for failed to raise new funding.
Both layoffs were a brutal experience to go through. Between the shock, the anger, the hit to my self-esteem and suddenly finding myself unemployed, it was a lot to handle, so my intent with this post is to share how I recovered professionally after getting laid off.
Getting laid off is an unfortunate but common by-product of working in a boom-or-bust sector like tech. The default reaction to getting laid off is to start looking for another full time job straight away, however when an entire industry is reducing staff or freezing hiring, its always an uphill battle to get into an interview process, let alone land a role that is actually right for you.
On the two occasions I got laid off, rather than jumping into a new job search, I went into business for myself doing consulting, which eventually led to me eventually finding great full-time jobs; as a product manager at Yahoo in 2003 and as chief revenue officer at Ethena in 2022.
Here’s what I learned along the way about why consulting is a good option and how to make it work for me:
When companies announce layoffs it’s actually a really good time to be a consultant because work still needs to be done to hit revenue targets yet the headcount is not available to do it. Companies can rarely cut their way to profitability because there’s usually an operational weakness in the leadership that leads them to over-hire when funding is bountiful and over-correct when the purse strings are closed. There are always jobs that need to be done after a reduction-in-force and consultants are seen as an ideal way to fill these gaps because they can be terminated without notice.
Consulting is a great way to figure out what you want to do next. You get to see inside multiple businesses in a way that you could never do in a conventional hiring process, because there’s no need for the company to hide anything from you. You get to know the folks that you’d likely be working with before you commit to a full-time role, while also demonstrating your value to them and building your network.
Consulting is a great way to learn new skills and make yourself more marketable. When I got laid off as a product manager in 2002, my first consulting project was building some KPI reports for my former employer. This enabled me to develop my coding skills and take on bigger coding projects for other clients as well as setting me up to be a more effective product leader for the long term, as I massively improved my ability to size technical projects and call bullshit on timelines. When I got laid off again in 2020, I immersed myself in SaaS and became an expert at diagnosing and fixing common sales and marketing issues for startups. This set me up to me a way more effective revenue leader as it turns out you can learn way more from consulting with 30 companies over 2 years than you can from working full time at 3 over 10 years.
Pick a consulting niche that describes what customers need, not what you do. I learned this by trial and error as I initially picked two niches based on my work experience; turning strategy into execution and unlocking growth from sales & marketing. It turned out that turning strategy into execution is very hard to do as a consultant because it involves fixing cultural issues around goal setting and accountability that can only be done as a full time COO, whereas unlocking growth from sales and marketing lends itself very well to consulting because it involves diagnosing and solving similar problems over and over again.
Sell consulting deliverables, not your time. I initially made the mistake of selling my time by charging a monthly retainer, but soon realized it made my clients focus too much on my hourly rate and the number of hours I was working for them, which led to uncomfortable haggling over how much of my time they were getting, which ultimately capped my ability to take on more business. Once I switched to selling standardized deliverables such as websites (in 2003) and sales diagnostics and ideal customer profiles (in 2021), my clients switched to focusing on the deliverable the impact on their business, which freed up time for me to get more efficient about creating the deliverables and to scale the volume of business I could take on.
Find your first clients from your network. When you are new to consulting, your first clients will always be people you know because they’ve seen you work and look beyond the fact that you don’t have a roster of consulting clients to point to. My first consulting client in 2002 was actually the company that laid me off and I’ve since done projects for former bosses who have moved into new roles, former colleagues who have started their own businesses, investors who have previously recruited me for their startups and others who were referred by all of these groups.
Market yourself by sharing your point of view. Another huge benefit of selling deliverables is that it leads to working on similar problems over and over again, which in turn enables you to developing frameworks for diagnosing issues and organizing solutions. Sharing your frameworks and ideas online is a great way to market yourself to your network and develop new relationships, as well as codify your ideas. I started this blog in 2021 to stay top of mind with my network and since then it has generated a steady flow of consulting opportunities.
Look for channels to help you reach more clients. There are lots of ways to this, from marketplaces like Fiverr and Upwork to joining up with others who are selling similar or complementary services. I partnered with a consulting firm that was doing similar work to me but had more demand than they could fill with their own staff because it turns out it’s really hard to scale a consulting business while maintaining quality, so consulting firms are always looking for talent that can deliver a project. While I made less per project than I would have on my own, I got to work on a larger number of companies and projects and learn faster so the trade-off was well worth it.
Use your client’s standard agreements. The vast majority of companies have their own independent contractor agreement template, with standard terms that vary little from company to company. I’ve found it way faster to use these agreements rather than creating my own as its doesn’t have to go through a legal review on their side and it gives you multiple data points to push back on any outlier terms you run into. All I usually have to do is list the deliverables on the statement of work.
Qualify all opportunities. As you start to do more consulting it’s very easy to get pulled in different directions by different clients with different types of projects, so it’s very important to ensure that the work fits into an existing deliverable. If it doesn’t, you will have to develop a new process, which will suck up your time and take you away from doing repeatable work. It’s also very easy to get stuck in a lengthy sales process trying to sell a consulting project to a client who isn’t sure what they want. My golden rule here is to only sell to people who know how to buy — if they haven’t bought consulting before or been a consultant themselves, stay away from them, unless you are certain you want to go work for them full time.
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