How to win your downturn
I've lived through two of 'em, so I have some sage advice
Presupposing the reaction of orange website commenters to what you’re about to read: no, this isn’t a bulleted list of ways to crush your downturn. It’s a personal story of how I lived through two downturns—one that was a disaster and one that set the course of a great life—written to entertain and instruct. There, you’ve been warned.
Six months after 9/11, I was 25 years old, and still didn’t know what I wanted to be when I grew up. I looked around the offices of my employer, a startup-ish consulting firm (meaning a consulting firm that had taken VC money to grow quickly), and knew I didn’t want to be in my mid-forties like Cliff having risen to the title of ‘architect’, but still beholden to bosses telling me I needed to work weekends and code for the project that they had underestimated.
I was taking random shots at figuring out my life. The year before I had been denied entrance to the PhD program at the MIT Media Lab, and in 2002 I was applying to business school, specifically Harvard, Stanford, and Wharton, because I had a an unrealistic confidence about my chances of admission, and I felt like I had reasonably good business intuition for someone with so little life experience. “Maybe business school is the right place for someone with good business instincts?” I thought.
I knew nothing about business or business school, but I had worked at two startups, and correctly predicted the demise of both. I realized the first, a startup called PrestoTech spun out of the MIT Media Lab, would fail when they pivoted to a product that would autofill e-commerce forms with an RFID tag, and I told it to the CEO’s face during a moment of bravery in one of the few meetings I ever had with him. His reasonable response was to tell me that it sounded like it was time for me to leave. I regretted my very direct feedback because, even though I was right, I had to book a ticket from Massachusetts back to Colorado Springs to live with my parents with my just-graduated tail between my legs.
The second failure takes us back to that moment 6 months after 9/11. I was pair programming on a ridiculous deadline with Kurt N in his dark cubicle on the 11th floor of a building in downtown Denver, and something popped into my head. We had recently lost a major client, and the economy was looking a little weird. I looked at Kurt and said, “Shit dude, I just realized that we either need to get a new $10 million dollar project, like today, or we’re going to have to lay off like 30 percent of the people here.” Two hours later, the CEO called an all hands and announced there would be layoffs.
One of the VPs who had gone to HBS had written a letter of recommendation for me, and I guess he felt like it was a pretty good one because, knowing I would be off to business school in the fall, he included me in the layoff.
So that was me, jobless in March 2002. I walked directly from my office to the unemployment building near the capitol in Denver with a feeling of confusion, joy, mania? I’m not sure what I was feeling, but it definitely wasn’t calm.
It was a pre-entrepreneur me that had been laid off. I didn’t have startup ideas. I didn’t feel qualified to run a company. In many ways, I still had the type of competitive persona that had been instilled in me through my schooling. Get straight As to get into a good college, after college get a badass higher degree from a prestigious university, then? Profit.
Unfortunately, any extra money I had from working at the consulting company, I had spent on building the appearance of success. I’d been going—regularly—to fancy bars and buying fancy clothes. There was nothing in the bank.
Oh, and applying to MBA programs isn’t free. So on a suddenly recalibrated budget, the prospect of applying to four or five MBA programs was a no go. I only applied to Harvard and was roundly rejected.
This meant I had all kinds of time, and no money. I didn’t even have my own computer. So basically, I decided to make the most of the little severance money I had, and assumed the next job would come along. The me of now wishes the me of then could read what I’m writing now.
I wish I would have read Poor Dad Rich Dad during my forced staycation, but I didn’t come across that book for several more years. Instead I read Tricks of the Windows Game Programming Gurus. Why did I read that? I liked video games, but I didn’t have any real drive to become a game programmer. Plus, without a computer, and having never done any Windows programming, all the stuff about MFCs and DLLs was pretty opaque.
I went fly fishing around Colorado until I could no longer make the lease payment on my 2001 Toyota Tacoma. This I don’t regret. I saw every corner of the state and learned to love it. For someone that didn’t understand life or what I wanted, I learned that part of who I am is to be found in the outdoors of Colorado. Good job, young Jon.
And, the rest of my time—so much time—I spent talking to neighbors on the stoop and drinking cheap beer. The sameness of every hot, downtown Denver summer day with a cheap beer buzz reduces months of unemployment into a singular, blurry memory. I wrote a story about forging a bus pass to catch a flight during those days in another newsletter if you’re interested.
It’s safe to say that I didn’t get the first downturn right, and I let myself get so broke and nervous about losing another job that I lost my sense of life’s potential—its endless options—for a few years.
In 2005 I took a vacation to Panama, and with salt still in my hair on the plane ride home, so mad about returning to work the next day, I remembered that life’s too short to toil endlessly on other people’s visions and two weeks of vacation a year.
I started reading books like Rich Dad Poor Dad, The 4 hour Work Week and many others. They ignited a healthy buzz in my head. By the time of the second downturn in 2008/9, I had already freed myself from full time employment and was working remotely as a contractor for a computer vision startup named Taaz while living in Uruguay with my wife. It was to be an adventurous, year-long honeymoon.
Everything was perfect. I was learning Spanish, loving spending time with my wife, limiting my work time to 30 hours per week, and surfing whenever the wind permitted. Then on November 18th, 2008, I got the following email from Kevin, my main contact and VP of Engineering at Taaz:
“Is there a reasonable way for me to call you on the shone?[sic]”
That phone call was brutal. I was 6000 miles from home, and my one and only client was letting me know they needed to cancel my contract.
I told my wife, and she said it was ok. It wasn’t really ok. Emotionally I was having very strong 2002 vibes. Would I be begging beers off my neighbors again? Reading library books in the park for 4 and 5 hours at a time?
No. I was determined to do better. I downloaded a CSV of all my contacts on LinkedIn and wrote them a letter that my company, Kelsus, was available to code for 30 hours a week, but that it would need to be remote work.
I called my close friends and said that now might be the time to start a product company because I suddenly had some time on my hands.
I learned Ruby on Rails because that was going to be the most obvious way to prototype our new product quickly. I read Getting Real by Jason Fried.
But then, after only a few weeks, Taaz unfired me and started giving me piecemeal gigs. Before I knew it, these piecemeal gigs were taking longer than the 30 hours I wanted to dedicate to work.
My email fishing expedition also paid off, and I found myself with two clients. Having two felt so much safer than just one despite the longer hours.
Then came May and I got an opportunity that would define the rest of my life up to now. Kevin-from-Taaz’s sister in law Roshan was planning to move to a small city in northern Argentina to be married. She was a civil engineer in San Diego, but her training wouldn’t be much use in Argentina, so Kevin had the idea that she could run a team of software developers in northern Argentina if we could find them.
They asked me to make two two-week trips to Resistencia, Argentina to hire and train developers for their team. I booked flights from Montevideo to Resistencia via Buenos Aires, and due to the timing of the trip being so close to a couple last hurrahs on our year abroad, I showed up in land-locked, flatland Resistencia with both a surfboard and skis in my luggage.
Ynty, Roshan’s fiancé, graciously helped me find a taxi that could accommodate my awkward luggage. On the way to my hotel, Ynty explained that he had already been living in Resistencia for a few weeks (Roshan wasn’t due to arrive for a few more weeks) and had been trying to line up interviews of computer science graduates from the local university.
In a windowless room on the fifth floor of a fancy casino hotel in the middle of a rain water stained town beset with poverty and economic inequity, I interviewed Fede, Raúl, and Tere (Tere went on to have her own amazing adventure separate from Kelsus). I had been learning Spanish for about a year, and used my fledgling vocabulary to ask them technical questions. I understood only about half of their responses, but they had an energy that felt right. They were willing to learn a proprietary Adobe programming language called flex and would start working immediately.
We sat in that room for two weeks making progress at learning flex and drinking mate. We ate every meal together and had fun. My wife joined me in Resistencia, and Fede’s parents took her on a trip to the countryside to visit a quiet, summer community called Paso de la Patria. This warm welcome was so much better than how we treated visiting foreign developers at my last job in the US.
Kelly told me she loved spending the day with Fede’s parents, and I realized that despite my additional years of tech experience, I had much to learn from my new friends in Argentina.
I left Resistencia, Argentina, and South America—returning to my home in Edwards, Colo. Roshan became great at managing the team, and all of us continued to work together for Taaz. Slack wasn’t a thing, so we communicated via Skype and Google Chat. My new friends surprised me by revealing they spoke English better than I could speak Spanish, and it was hilarious.
A year later, Taaz asked me to return to Resistencia and hire more people for the team. On that trip I met Jony who was already very close with Fede and Raúl but was still finishing his studies during my first trip. My memories of this second trip are obscured by jetlag and the sameness of that windowless hotel room that we rented again, but I know there was more mate, pizza at my second favorite pizza restaurant in the world (Los Campeones) and better friendships.
Then one more year after that, Taaz invited Fede and Raúl to San Diego for an extended on-site work trip. They also invited me for a week of that trip.
The trip started with 4 days of 12 hours of coding a day. Then, on the afternoon of the last day, Fede and Raúl said they’d like a surf lesson. They knew I had been surfing early every morning and wanted me to teach them. I was a little reluctant to duck out of the office because we had been working under a terrifying deadline, but I also couldn’t say no. I wanted to return some of the hospitality they had shown me in Resistencia.
We drove to La Jolla Shores and they rented giant soft top surfboards. We waded into the cool water and I pushed them into breezy shore break waves. They toppled and flailed like every first time surfer, and we laughed it off.
Stoked and cold, we drove up the coast after our surf to a restaurant on the beach in Cardiff by the Sea. Again a slight twinge of guilt. Not only had we quit work early, but we were definitely going to make this slightly too expensive restaurant a business expense.
I asked them how much Taaz was giving them per diem, and they said $15. What the actual fuck? I was furious. Taaz had plenty of money to give them a standard 45 or 50 dollar a day per diem but knew that because they were foreign, they wouldn’t argue. I told them they didn’t deserve to be treated that way, and I happily included the expense of their dinner on my invoice to the client.
Toward the end of the meal, Raúl put down his fork and said he had a question. I could tell his question wasn’t spontaneous. He asked if I would be interested in continuing to work with the two of them and Jony with my other clients. I didn’t hesitate. I said yes. We agreed on rates, and shook hands at the end of dinner.
That night I felt a little nervous. The “yes,” I had given had weight. I knew that I would be responsible for finding them work, and that if I failed to do it, it would feel like a personal failure and a betrayal.
From that day forward we were locked together. Their careers were in my hands, and my livelihood, Kelsus, was in theirs. Eventually Taaz had financial trouble and shuttered the office in Argentina. Roshan and a few others from that team joined us at Kelsus.
Oddly, when I think back to that second downturn, I sometimes feel like I should have started a business like AirBnB or Uber.
But I did start a business! I’m still running it. Jony, Fede an Raúl are the most trustworthy, intelligent, and committed partners I would ever meet. Today they are each talented leaders that inspire—and occasionally intimidate—tons of new developers at Kelsus.
The lesson for you? If you don’t know what you want, spend this downturn figuring it out. If you do, spend this downturn starting it.