Entrepreneurial students should not fear layoffs

Hayes Ferguson, Tribune News Service

Many of my students have a lifelong dream to work in Big Tech after graduation. Regardless of whether a student is a computer science or a marketing major, the allure of working for Google, Meta or Amazon — or any of the major tech companies — is deep-seated and fierce.  When massive tech layoffs started dominating the news — about half of Twitter’s 7,500-person workforce, followed by 11,000 at Meta and 10,000 at Amazon — I initially was concerned for my current students at Northwestern University, where I lead the Farley Center for Entrepreneurship and Innovation. I also questioned my decision to take a cohort of 20 Farley undergraduates to San Francisco this winter quarter. A key component to the program’s purpose, after all, is to expose students to the tech scene that, just last year, was thriving.

But students who once vied for jobs at household-name tech companies will be fine. Industry experts do not expect Big Tech layoffs to cause a tsunami of layoffs in other sectors, which means opportunities simply will be elsewhere: at financial institutions and theaters, in climate and health care tech, and myriad other areas in desperate need of innovation. Entrepreneurship will continue within existing companies of all types and sizes, through “intrapreneurship” and increasingly — and counterintuitively, given the relative lack of venture funding today — new companies. More of those companies might launch in cities such as Chicago, if San Francisco loses some of its luster.

Each academic year, about 1,000 Northwestern students take classes at Farley, an interdisciplinary center that unites students and faculty from various corners of campus, including from the engineering school, where we’re based, as well as the journalism school, business school and even music school.

Our goal is to arm Farley students with problem-solving skills that will serve them no matter what they do after graduation. Most of them choose the relative security of jobs in well-established companies over forging their own paths.

I remember one such student, a natural-born entrepreneur and son of immigrants who had struggled to pay for Northwestern. As much as he wanted to keep building his startup, which seemed promising, he feared his parents would be devastated if he passed up the six-figure job offer he received from a major tech company. He opted for the more secure route rather than risk financial insecurity.  What would have happened if there had not been such a tantalizing offer to pull him away from pursuing his own entrepreneurial dream? We may soon find out as more top students are forced to explore alternatives to Big Tech jobs.

In the midst of the pandemic, I wrote about how difficult times have historically yielded transformational innovations. In the late 1700s, for example, French military leader Napoleon Bonaparte needed a more efficient way to transport food to his troops. He established a contest challenging people to come up with solutions. A Parisian chef won the grand prize by boiling sealed jars of food. The invention led to Mason jars, tin cans and numerous other products that are widespread two centuries later.

Graduating college students often turn to graduate school during difficult times. My colleagues at Northwestern’s Kellogg School of Management are appealing to laid-off tech workers, as well: The school recently offered to waive test score requirements for those who apply for a Master of Business Administration program.

But I’m already hearing Farley students and recent alumni suggest that Plan B for them might not be taking on debt to earn an MBA but rather bootstrapping their own companies. One alumna of our program recently moved back to Evanston after stints on the West and East coasts. The appeal of the Chicago area to this young entrepreneur comes from lower housing costs, a supportive network of investors and mentors, and a tight-knit community of friends.

For those who want a more immediate monetary return on their college education, there will still be options. Legacy financial institutions have long been on the losing end when competing for star tech talent coming out of Northwestern and other top schools. If big banks continue to pay handsomely — and address other requirements from this generation, such as work-life balance and alignment of values — students who once would have headed to Amazon or Twitter may instead put their engineering skills to good use at Goldman Sachs or JPMorgan Chase & Co.