How a Laid-Off Shopify Employee Started Her Own Business

• Stella Alexandrova was among the 1,000 workers laid off in July by Shopify, an e-commerce giant. 
• She saw the opportunity to start a business through the five-months of severance and layoff. 
• Paul Asel, venture capitalist and venture capitalist says that a recession can be a good time for a company to be started. 

Stella Alexandrova, a Canada growth lead at Shopify, had been working for three years. She received an email from Shopify in July informing she that she was being laid off. 

Alexandrova stated in an interview that she was shocked. Alexandrova said, “I was so shocked because I couldn’t have seen this coming.” 

She didn’t expect to lose her job despite layoffs at other tech companies.

Alexandrova was among the 1,000 people who were fired by the e-commerce company this summer. Shopify’s CEO Tobi Lütke explained the cuts in a memo, saying he had wrongly predicted that the pandemic-fueled demand for e-commerce would continue. 

“Ultimately, placing this bet was my call to make and I got this wrong,” Lütke wrote. “Now we need to adjust. “We have to say farewell to some of you today, and I am deeply sorry.”

Tech companies have been cutting thousands of positions this year to save money and prepare for the next recession. Meta, Twitter, and Amazon announced this month plans to layoff 11,000 employees. 

Alexandrova saw her layoff to be a chance to start her own business.

“I can’t control the layoff — it is what happened and the business had to do those cuts,” she said. “I can’t control what will happen, but I can manage my reactions.” 

It’s unlikely that she will be the only one. Entrepreneurship is known to boom during recessions, with some of the most successful tech firms emerging out of recessions — such as Airbnb, Uber, and Microsoft. 

Paul Asel of NGP Capital, a venture capitalist, stated that it is sensible to secure a high-paying position at a stable business “when salaries are high and hiring is hot.” However, in a downturn the “opportunity cost” of leaving your job to start a new company is much lower. 

He said that this allows potential entrepreneurs to start their own ventures.

You can get severance pay on the runway

Alexandrova is an avid traveler and was in the process of planning a trip. She realized that DIY sites had exploded, so she spent hours looking through various websites to help her organize it. 

Shopify provided five months of severance to her after she was laid off. This effectively “paid me to be in a position to start my business,” she explained. 

“This means that for five months, I won’t have worry about how my rent will be paid. It gave me the comfort of knowing that I didn’t have to worry about my bills. 

Alexandrova, who was laid off a week earlier, launched Mave, her travel app that helps people plan their trips in just minutes. The post was shared on LinkedIn by Alexandrova, who then went viral. Alexandrova felt the risks of starting her own business despite all the support.

Asel stated that it is a great time to launch your own business because “capital requirements are down” and businesses can expand at a slower pace.

Asel stated that “one of the most common mistakes made by entrepreneurs is to try to grow their businesses too quickly, or too early.” Entrepreneurs have more time in a downturn to create products that satisfy customer needs. This increases the chance of success. 

Asel stated that although it may feel harder to start a business during a recession because it is harder to raise capital, the “long-term probability of success” is higher.

“It’s more painful at the beginning, but that pain can turn into success at an higher rate for those people who can get over those first few hurdles,” he stated. 

Alexandrova now has 11 employees. She also says that Mave’s waitlist has risen to 16,000 people. She hopes to raise funds for the startup over time.