According to a new Clarify Capital (opens in new tab) study, almost two-thirds (63%) of recently laid-off tech workers have started their own companies amid re-employment difficulties, despite some reports late last year suggesting that tech workers were in high demand.
The research involved 1,000 participating tech workers who had been laid off during the pandemic and found that almost three-quarters (72%) of those who set up a business had done so within 12 months.
Despite oftentimes competing against their old companies, benefits are aplenty, including increased salary and security.
Starting your own tech company
Surprisingly, the difficulty in getting hired ranked 11th as a reason for redundant workers setting up their own company, with professional growth and greater opportunities both playing a more significant role. Financially, the opportunity to earn more and the dissatisfaction with previous pay ranked second and ninth respectively.
Despite 91% saying that their newly-formed company competed with their previous employer, it transpired that 68% of them had acquired customers within eight months.
While the figures sound promising, there are some challenges that come with being made redundant and running a successful company. Choosing the right technology is the biggest concern, though the ongoing effects of the pandemic remain almost as pressing.
Similarly concerning for many was funding, with friends and family being a common source. Coworkers 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 feel quite fulfilling, but finding success isn’t always easy… Nonetheless, many found success within their first year of business… [and] the majority also felt positive emotions when starting their new businesses”.