The recession might end up producing more indie hackers

For all the problems they create, recessions can produce positive byproducts. Case in point: I think we're seeing the ideal conditions right now for a wave of new indie hackers to enter the market.

First, consider the latest US unemployment numbers:

These jobless claims are so massive that if even a tiny fraction of the newly unemployed choose to start their own businesses, we'll see a surge of new founders.

I'm not alone in thinking this. Here's a prediction @tylertringas (founder of Earnest Capital) made on Twitter this week:

The cool thing about the IH community is we can see this happening in real time.

@Kevcon80 discussed his very real expectation of being laid off this week, along with his contingency plan in entrepreneurship:

I’m now more motivated than ever to start making some money on the side. It’s a nice slap in the face to remember that I’m not in control of my financial fate right now.

Kevin's in great company. Some of the most inspiring indie hackers we've interviewed have bounced back from layoffs to bootstrap successful businesses, like Ketan Anjaria of HireClub ($25k/mo), Kean Graham of MonetizeMore ($1M/mo), and others.

Here's John Doherty of Credo ($32k/mo) on starting his company:

I had… been laid off by the company I was working for in San Francisco. I had approximately three months of financial runway plus my wife's salary, but I needed to pretty quickly generate revenue. Fortunately I had long wanted to see what this company could become, and being laid off gave me the opportunity.

Granted, we can't know that first-time entrepreneurs will opt to bootstrap their businesses rather than seeking cash from investors. But we can be more certain than normal. These are also trying times for VCs, and the adjustments they're making lessen the appeal of fundraising for new companies.

Founders are reporting that it's not just more difficult to close funding rounds, but also less lucrative since VCs are offering lower equity.

So it's no surprise that even Paul Graham, the co-founder of Y Combinator, is advising founders to deprioritize fundraising:

This shift towards sustainability doesn't only apply to new businesses. The economic winds favor a similar change in priorities for high-growth startups that have already raised money.

Indie.vc founder Bryce Roberts suggested this week that the profitability-focused companies in his portfolio are thriving relative to the growth-focused startups he's talking to.

I also found a pretty telling blog post in which the VC firm Sequoia Capital advised their startups on how to weather the recession.

Here's my quick summary of the post: trim expenses, reduce headcount, manage growth without a huge marketing budget, and try to chart a course to financial independence.

In other words, follow the indie hacker playbook.