I'm a designer who turned into a writer who turned into a startup CEO. My mission is to help creators earn a living. Subscribe for essays on building an audience and earning a living as a creator.
What to do as a creator in this recession
On Monday I watched the ticker on layoffs.fyi tip over 100,000 tech jobs laid off in 2022. That was before Meta, Salesforce, Cameo, and others announced another 20,000 employees laid off.
Patrick Campbell from ProfitWell wrote a thread detailing the aggregate numbers they are seeing from 28,000 company metrics. It's not good.
There's no doubt that we are headed for a major recession for the first time in 14 years.
So what do we do?
I'm going to take this from three sides: as a company founder, as a professional creator, and as someone who was just laid off.
As a founder
I've always been conservative. One of my life goals is to never have to layoff team members. That means when times are good I look foolish for not investing as aggressively and when times are tough I look smart for my prudence. The truth is I'm just deliberate and consistent no matter what the market is doing.
In a recent episode of the All In Podcast Chammath said:
"It’s much better to grow 20% and be profitable than it is to grow 100% and burn money"
That's the opposite of what venture investors have been saying for years. But if you aren't profitable these are the same people you need money from. They are now eyeing t-bills paying 4% and think your startup looks pretty risky.
If you aren't profitable it's time to get there. As much as layoffs hurt, if you need to do them, do them early.
Then work through your expenses and anything you don't need. Yesterday I found a vendor that was charging us between $3,000 and $7,000 per month for services we weren't using.
Though once you free up cash and cash flow I don't think you should just stockpile it. Mark Cuban talks about how the reason to save money is so you have money to spend when others don't have money.
Now is a great time to be hiring (at least compared to 9 months ago). At ConvertKit I plan to hire 18 new roles by the end of 2023. We have ambitious goals and it's time to invest to hit them. We've gradually saved a war chest exactly for times like this.
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10X Your Writing With QuillBot TodayAs a professional creator
As a professional creator the most important thing is to stay consistent. Consistency over a long time is what got you here and it's what will get you through whatever is coming. Send your newsletter every week, record that podcast, and keep pitching your products.
Next, watch your expenses. Many creators watched their income jump from something like $80,000/yr with a full-time job to more than 3x that as a creator. With an income jump like that it's easy to get lazy with your expenses. I stopped keeping a budget.
It's time to go back and make a budget to analyze where your money is going. I bet you can find at least $500/mo worth of things to cut.
If your business is dependent on a single big launch per year supporting payroll for a whole team, it's time to trim that back.
Grow your cash. Put it somewhere that earns a good return. Mine is split between Robinhood and Wealthfront where I am averaging 3.5% per year.
Keep dollar cost averaging. Once you feel comfortable with the amount of cash you have make sure you keep investing. Now when things are scary is when the prices are good. If you liked Shopify at $134 per share you should love it at $34. None of us will be able to time the bottom, so don't try.
As someone who just got laid off
If you got laid off, start a side hustle. Even if it's just you writing a newsletter to stay in touch with your old co-workers and sharing what you learn as you figure out what's next in your career.
As humans we love to follow anyone on a journey. You're starting on one right now. Even if you never continue as a creator the writing skills you polish will serve you for the rest of your career.
Start a ConvertKit account. It's free. Use our landing pages to make yourself a simple home page that can link to all of your work.
Pat Flynn launched what would become a massive online business empire after being laid off.
My final advice for everyone
It's going to take longer than you think. We launched an advertising business right at the start of a major recession, when we know brands are cutting back on spending. We know it will be hard to grow, but that's okay. I'd rather grow a business in lean times and have that in our DNA than launch when money is flowing and then be unable to weather tough times.
I just have to shift expectations that every growth chart won't always go up and to the right. Sometimes there will be down months. But if you look long-term we'll get the results.
It took 6 months to grow ConvertKit to $2,000 in monthly revenue, then it plateaued and dipped. It took another 18 months to grow past that!
The results you want will take longer than you think.
Work hard and stick with it.
—Nathan
Nathan Barry
I'm a designer who turned into a writer who turned into a startup CEO. My mission is to help creators earn a living. Subscribe for essays on building an audience and earning a living as a creator.
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