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Layoffs may become good things for young entrepreneurs

  • Story Highlights
  • Jobless rate for people 30-34 has nearly doubled in the past 12 months
  • Experts predict explosion of entrepreneurship as result of recession
  • "Middle career" workers have experience, energy, skill set
By Laurie Segall
CNN
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(CNN) -- Jeff Mann had already escaped one round of layoffs, just barely.

Nathan Phillips teamed up to start an online personal speechwriting and media training business.

Jeff Mann has been researching online marketing and social media and how they pertain to the music industry.

Less than 24 hours after being told that he was being let go -- enough time to pack up his desk and send a farewell e-mail to colleagues -- he received news that his position in video promotion and strategic marketing had been saved.

But he wasn't so lucky in February. He and several colleagues were laid off as their employer, a major record label, adjusted to the economic challenges facing the country.

"It was a wide range of people, never strictly performance based, more bottom-line based," Mann said. "It was just something the company had to do."

Since then, Mann -- a classically trained pianist with a master's degree in music business from New York University -- has been seeking work.

Mann represents a demographic hit hard by the recession. The unemployment rate for people between the ages of 30 and 34 has nearly doubled in the past 12 months, from 5.1 percent in August 2008 to 9.1 percent last month. During the same period, the total U.S. unemployment rate went from 6.2 percent to 9.7 percent, a 26-year high.

Like many other laid-off professionals in their early 30s who paid their dues over the past decade, Mann finds himself out of work and overqualified for entry-level openings. To cope, Mann and others have been adapting their skill sets to a changing economy.

"My first inclination is to go back to a record label and get a job," he says. "My second inclination is to see how I can explore all these alternative models of working with artists and music." Video Watch as Mann discusses his unemployment situation »

Bo Fishback, vice president of entrepreneurship at the Kauffman Foundation, predicts an explosion of entrepreneurship among people in their 30s as a byproduct of the recession.

"There've been a lot of layoffs in this bracket of middle career. These people have enough experience in their industry; they've got relationships, and they know customers," he said. "It's created a circumstance where they could use all their energy and skill set and build it into something else."

In addition to looking for work, Mann has been researching online marketing and social media and how they pertain to the music industry. He also manages an artist on a freelance basis and consults for two food-based businesses about social media and Internet marketing.

"I feel this is maybe pushing me out there, saying, 'This is your opportunity,' " Mann said.

Nathan Phillips, 32, is another young professional adjusting to the economic environment. In 2007, he left his job as a head writer for a media company to explore opportunities in the freelance market.

Phillips began freelancing regularly, spreading his time between copywriting, developing interactive mobile projects for museums, and comedy and script writing.

"In mid-2008, when the recession started, the jobs really dried up," he said. As museum grants disappeared and budgets were cut, Phillips was left with little freelance work.

Using his creative background, Phillips teamed up with writer Victoria Wellman and started the Oratory Laboratory, a Web site offering personal speechwriting and media training. Providing everything from wedding speeches to break-up letters, Phillips says, he found a business that would survive the economic storm.

"The greatest thing about this business is that it's recession-proof," Phillips said. "It's a service people didn't realize they need, but once they hear about it, they're like, 'That's what I've been waiting on.' "

Phillips has offered his services to guests appearing on national television. "We're helping people from the way they write to the way they come across in an appropriate manner," he said.

As traditional jobs remain hard to come by, both Phillips and Mann have entered the realm of what Fishback calls necessity-based entrepreneurship.

"What's interesting is the idea that they're early enough in their career that they're particularly ambitious," Fishback said.

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"We know for sure that this group of people, when there are layoffs that are not necessarily a performance thing, these super-talented people are not going to settle with anything other than high-energy projects.

"At that point in their lives, a layoff can turn into a real blessing."

All About National EconomyUnemployment RateRecessions and Depressions

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