Tech Ecosystem Collapse: What Next?

In the last couple posts, I talked about why I think that the tech employment ecosystem is collapsing--or at least shrinking in size to such a degree that many are being forced out of traditional roles.

Casey asked the real questions on all our minds, "How do individuals survive in a world like this? What industries do we flee to?" In other words, what do we do about it?

Unfortunately, there are no easy answers here.

In general, there seem to be three paths available, and they're not mutually exclusive:

1. Turtle Up
2. Keep On Keeping On
3. Consult

If my assessment of the tech ecosystem shrinking is true, then we're in for a long period of difficulty finding new jobs.

First and foremost, this isn't a time to let go of a job, if you have one. Of course, that doesn't mean stop applying to new roles while you're employed--but don't voluntarily leave a position before you've got the next one lined up.

Regardless of your employment status, though, I think it's time to get financially defensive. What that means is deeply personal, but I like to think to through an extreme scenario to see just how defensive I can get/live with.

Ask yourself, "If I were to be forced into bankruptcy, what would I no longer be able to do or have taken away from me?" You might lose a car, a house, or other investments. You'll probably have to stop going on vacations or cut back in expenses in other ways.

Once you have the answer to that, figure out how much of an advantage you can give yourself by pro-actively taking those steps yourself, before bankruptcy. All of this will feel terrible. Some of it will set you up to be far more financially sound than otherwise.

One of those "things that you give up" might have to be your work identity as a software engineer/product manager/designer, etc. If you're not finding work and need the money, being a delivery driver, barista, etc. might help make ends meet for a while. It'll hurt, emotionally, but buy you time--and you don't have to put it on your resume later (consulting help cover the gap on your resume...see below).

Personally, my wife and I have decided its time to get out of real estate. We've been lucky and able to purchase a few homes over the past 10 years. We'd buy a place and live in it, while we saved up the downpayment for the next one. Once we had enough saved up, we'd buy a new place and rent out the previous.

We sold one place last year, and we've decided to sell the other two now, including where we live--and rent instead. Assuming all goes well, we'll be a financial fortress once those places sell.

Don't be fooled though--this process is hard. There are a lot of emotions that go into proactively tightening your belt and getting defensive. Selling our places feels a bit like a step backwards. There's an aura of "winning" around being a homeowner, regardless of the actual math or quality of life. There's also the anxiety that home prices might keep going up, and we're "giving up our seat" in an ever crazier game of musical chairs.

But getting defensive means acting early--before you're forced to. Any cuts are going to feel bad, or we would've already done them. That's the price of taking advantage of whatever resources you have vs having them stripped away from you by circumstance. It hurts, but the pain now will likely save a lot of pain later--or at least, let you keep a clear a mind while you plan your next moves.

While the tech ecosystem is shrinking, it's not dead. There are job opportunities out there. People are regularly landing new roles--it's just a much smaller fraction of people in the industry than before.

So, keep applying to jobs. Keep networking. Keep trying to find a position.

There's still work to be done and maybe you'll get lucky. If you do get an offer, recognize that it's not 2021 anymore. You can (and should) still negotiate the first offer--but you'll probably want to be much more flexible about salary, remote work, vacation days, etc.

Remember that, especially if you're currently unemployed, the immediate goal is just to survive. There will be a time to press for more again--it's just not now (of course, maybe you have special and unique qualifications that keep you in demand despite the larger environment--then by all means, ignore me!)

Finally, I think it's super important for everyone to start trying to find ways to consult. The last time I went through this was 2009–I had just moved to New York and lost my job as a financial analyst at Western Digital (they decided they didn't like the idea of my working remote despite what I'd negotiated before).

I didn't know what I was going to do next, but I knew it wasn't in finance. I spent the time learning to code websites and web-based app. I took online courses about earning side-incomes (Ramit Sethi's Earn 1k stood out). I wrote, and I worked out. But most importantly, I told me friends about the kind of work I wanted to do, and I offered to help them with any projects they had (even if it paid nothing / very little).

That last step turned out to be the most important. I ended up building some code for an inventory management system for a friends' warehouse. The core innovation for them was a QR-code based system the integrated with their existing scanning system to let their workers quickly pick items off the shelf and update the database. They let me build this even though I'd never shipped any software beofre because my friend knew I was smart and hardworking– and I was pretty cheap compared to other options. That project was critical to my later transition into product management.

The thing about consulting is that it forces you to:

1. Talk to people to figure out what they value
2. Actually deliver work that provides that value (or at least learn that you failed)
3. Build contacts that can help you find more work
4. Figure out how much value you are (or aren't) delivering, so you know what you're worth

While the tech ecosystem was growing fast, public companies and venture-backed startups were sucking up and hoarding all the talent when it came to software engineering, product management, design, and digital marketing/community. The rest of the world could never match the compensation being offered, so they had to do without.

I see this period of hardship as a forcing function driving those talents from the "center"of big tech/venture outwards to all the rest of the economy. It's going to be challenging, but if our tech skills are really valuable, then these other businesses should supercharged for having access to them.

The problem, though, is that those companies won't know it (having little experience with these skills), and they'll be going through hard times too. They're not just going to suddenly open up hiring budgets to bring on expensive new people--and that's where consulting comes in.

Each of us has the chance to forge a new path with these companies. We can offer our services (often for too little money at first), generate results, and thereby prove that they should be investing more in these skills. The ones who do it first / best might end up starting very profitable new businesses, creating great jobs for themselves, or even changing whole industries.

The problem is someone has to go first and take the risk. You're not going to earn what you used to, at least at first. But, if you're unemployed and can't find work--what have you got to lose?