Unemployed? Why Not Start a Software Company?

R.S.D. asks: "I see all these Ask Slashdot articles about unemployment these days. Why don't a few of you guys get together and start a software company? Out there in the world, there is still a lot of software that needs to be written, and people are still pumping lots of money into software (and biotech). In fact, the software sector is still described as the enduring leader in raising venture capital, though apparently in Silicon Valley more money is going out of the maturing software industry and into things that are still high-tech like biopharm and nano. Is anyone else trying this? If so, how's it going? If not, why not?" This is easier suggested, than implemented. For those who have gone this route, what suggestions would you give to those who may follow?

"Every time I see a group of 5-10 self-described 'great but unlucky' IT workers looking for a job, and how their previous company had to lay them off because their former employer had this 'stupid idea' it was to move all the jobs to Elbonia, I have to ask myself -- why don't these guys get together and start a software company. If you don't make these 'mistakes' of outsourcing development to Elbonia, couldn't you compete pretty well?

Best of all if you ever did need to grow, in this job market, you can get highly educated and experience software engineers even more inexpensively than China or India -- I've heard some internships are unpayed these days.:-)

Yes, I am taking my own advice, and trying this, even though I was not unemployed."

Comments

Re:Worthless ideas

[ScottSpeaks!]

The rules vary from state to state, but the ones I'm aware of (such as Michigan) do not prohibit you from starting a business while collecting unemployment benefits. Looking for a job may be your "full-time job", but "moonlighting" is allowed... even encouraged.

The first catch is that you must continue seeking a "real" job to collect benefits from the state. If they ask, you need to produce the names of places you've applied, interviewed, etc. You need to have "get a job" as Plan A.

The second catch is that if you make money from some other source, they'll reduce your benefits according to a formula, and if that income reaches a certain level, you can't collect at all. For example, there were a few weeks during my months on the dole that consulting gigs exceeded those limits, so I simply didn't collect for those weeks. I was working on Plan B there.

The two aren't mutually incompatible. In fact, in just about any region where unemployment is bad (e.g. the United States) you'll see "feel good" articles in the paper about people who used this strategy and a year after getting laid off, are now eking out a living with their own business instead of eking out a living with lousy McEconomy job. (Me, I ended up doing the latter.)