Our Take: Job-Search Bubble
Riding the subway home from a job-search networking party at which you met more jobless-services entrepreneurs than job-seekers, you skim a free local newspaper. One page is divided into two distinct advice columns, each about coping with a layoff. The next page reviews a career consultant's latest how-to book about bouncing back from being laid off.
You gaze across the aisle at an advertising panel featuring the New York State Lottery mascot - a nerdy midget named "Little Bit of Luck." "With 100,000 winners a day, I might be the only upside to downsizing," he cheerfully proclaims.
Arriving at your apartment building, your eye falls upon a green stack in the lobby. It's a pile of flyers from a Brooklyn vocational school, advertising, "Training...Job Placement Assistance...Free*."
Welcome to the new bubble: For-profit services for the unemployed.
Forget about traditional career services businesses - eFinancialCareers and other job boards, career coaches and outplacement, professional education and training, and so on. Those kinds of businesses long predate this recession. And rather than draw strength from rising unemployment, some are seeing their growth suffer.
Rather, the emerging job-search bubble I see revolves around new-fangled business models like blogging, social media, user communities and volunteer-produced content.
LaidOffCamp: A Woodstock For Jobless-Service Business
The outpouring of profit-oriented job-search aides is not just impossible to miss - it can sometimes feel impossible to get away from. "It never ceases to amaze me just how many people want my money," complains Norm Elrod on Jobless and Less. But "There's not that much of it," the job-seeking blogger points out. "Marketing to the unemployed and others hit hard by the down economy is everywhere. It's growing into quite a cottage industry - one to be wary of."
Elrod cites a recent San Francisco Chronicle report on something called the LaidOffCamp - a day-long festival created by a recently laid-off consultant to help prospective entrepreneurs build businesses that will cater to yet other newly laid-off people.
Although I'm usually quick on the uptake, that concept took some time to sink in. Once it did, it brought to mind the 405 Club - a New York group whose party I alluded to at the top of this column, and through which I met Elrod. Soon after writing this, I'll be at a party of another professional networking group. And let's not forget Wall Street Pink Slip Party, yet another for-profit venture that caters to the jobless.
Infomercials and 'Snake Oil'
These business incubators clearly do not constitute Multi-Level Marketing. Yet it feels a bit like that, in a karmic sort of way.
The San Francisco Chronicle story insightfully expores the tensions between helping layoff victims and profiting off them. "Forget the so-called recession-proof career. These are recession-centric careers," writes author Chris Colin. "Can a demographic of strapped people support an industry intended to serve them? For that matter, should they?"
Colin quotes a jobless legal secretary who bonded with many job-seekers at the LaidOffCamp but was uncomfortable with the service offerings. Some providers' pitches she equated with "an infomercial," while others she labeled "a little like snake oil." And when she finally met a career coach who impressed her, she couldn't afford the service.
Ticking Off the Challenges
It's too soon to judge whether networks of the jobless will prove a rewarding business niche, either for current or future entrants. The entrepreneurs I met are well aware the niche will inevitably stop growing and contract whenever the labor market starts to recover. If you're thinking about trying to monetize your own transition experience, here are a few additional caveats.
- Information is hard to sell at a price high enough to recoup one's costs. Especially the online variety, which is both the cheapest and easiest distribution medium, and the one that finance professionals (younger ones at least) are most comfortable generating.
- Hope to make it as a blogger? Be mindful you'll be competing against many former journalists, management consultants and macroeconomic strategists - people well-practiced at quickly assembling pertinent facts and expressing conclusions in language that appeals to broad audiences, often without an editor.
- Many recession-centric business models rely on early media exposure to kick-start their market penetration. Just as with personal branding efforts, media-dependent strategies place a premium on being first to market with a new idea. So if you're mulling a business similar to one you read about here or elsewhere, make sure you can succeed without the news coverage (= free high-impact adverstising) your predecessor enjoyed. If someone else is famous for it already, then you won't make the news.