Several folks have reached out to me recently. They have been diligently preparing for interviews with FAANG+ companies but wonder if they are better off to stay where they are due to the deteriorating macro economic condition.
Interesting enough, a couple weeks ago I had a chat with a friend who is a partner at a VC firm. She was telling me that it is time for employees to err on the side of caution and it is not time to take major career risks. Interesting take from a venture capitalist!
I agree with her sentiment, but I am also quite excited about opportunities ahead for the driven and ambitious professionals.
Let me explain.
Here are the current realities. Companies of all sizes are tightening the belts. They are slowing down hiring or implementing hiring freezes.
Some companies have also had layoffs. Others are raising their performance bars and will force some employees out.
Technically we are not in a recession yet. Once a recession starts, it could last 3 to 6 quarters.
To be safe, let’s plan that the current economic downturn will last until the end of 2023.
So far, my narrative has been depressing. But, behind every crisis, there is an opportunity.
Warren Buffet famously said be fearful when others are greedy and be greedy when others are fearful.
The readers of this newsletter are a driven and ambitious bunch. It is time for you to seize the opportunity.
A lot of public companies’ stock prices have been cut to half or more.
If you work for a privately held company, it is likely that your company’s valuation will come down. In fact, I have already heard that multiple unicorn startups’ latest 409A valuation is about half of their last valuation.
Hopefully your employer is repricing your equities to keep you motivated. If they are not adjusting your equity strike price, you should at least explore outside options.
Now, going back to my VC friend’s advice of running for cover.
I do agree with her that job candidates need to be careful and cautious. You do not want to join a company that will lay off a bunch of people soon.
Your goal is to join a company that will come out of the recession a lot stronger.
Google, Amazon, Microsoft, Netflix all have survived multiple economic downturns, getten a lot stronger during the process, and dominated afterwards.
Your goal is to identify such a company with the following characteristics:
- The stock is undervalued significantly, which gives you a lot of potential upsides.
- You believe in the company’s leadership and management. And that starts at the top. Is the CEO there for the long run? Is he/she a savvy operator? For example, I am still bullish on Meta because I think Mark Zukerberg is a once-in-a-generation entrepreneur.
- There are clear high growth drivers for the business to continue to grow and solidify its position in the market.
- The company has a healthy cash position to survive the next 24 months. Eighteen-month runway is not enough.
- You genuinely believe in the company’s mission and are aligned with its culture
- The company can be either publicly or privately held.
In conclusion, you should take a very cautious approach to navigate the current job market. However, there are some golden opportunities out there that could bring very meaningful career and financial upside to you if you pick the right opportunity.