According to a new Clarify capital (opens in new tab) Research shows that nearly two-thirds (63%) of recently laid-off tech workers started their own businesses amid difficulties finding a new job, despite some reports late last year suggesting that tech workers were in high demand.
The study involved 1,000 participating tech workers who had been laid off during the pandemic. Nearly three-quarters (72%) of those who set up a business did so within 12 months.
Despite often competing with their old businesses, there are plenty of benefits, including increased pay and security.
Start your own technology company
Surprisingly, difficulty getting hired ranked 11th as a reason for laid-off workers to start their own businesses, with professional growth and more opportunities both playing a bigger role. Financially, the opportunity to earn more and dissatisfaction with previous pay rank second and ninth respectively.
Despite 91% saying their newly founded business competed with their previous employer, it turned out that 68% of them had acquired customers within eight months.
While the numbers sound promising, there are some challenges that come with being laid off and running a successful business. Choosing the right technology is the biggest concern, although the lingering effects of the pandemic remain almost as pressing.
Likewise, many provided funding, friends and family being a common source. Colleagues were often consulted, as were angel investors. Fewer startups turned to crowdfunding platforms like Kickstarter and Indiegogo.
The Clarify Capital summarizes: “Pursuing an entrepreneurial lifestyle can be quite satisfying, but finding success isn’t always easy…Nevertheless, many found success within their first year in business… [and] the majority also felt positive emotions when starting their new business”.