Is the Bubble About to Burst? How Leaders and Individuals Can Brace for Economic Change

By Coco Brown

I was VP of professional services at Taos in 2000 when the dot-com boom hit its peak. Our CEO at the time, Bill Dwyer, gave the executive team high-end champagne and caviar as a year-end gift. As we toasted to an incredible year, Bill said, “These are the good old days.” As we celebrated, Bill could sense what was about to come—while we were peaking, the market was crashing.

The dot-com bust had already arrived, but no one quite saw it yet. Within 18 months, Taos went from a high of $100 million in revenue to about $10 million. Throughout the following year, we laid off 700 people. I stepped into the role of president and COO, working hard to keep us from bankruptcy. Beyond simply surviving, we wanted to come back more resilient than ever for when another downturn inevitably hit.

If there’s one thing we know—and that history has proven—things do not just go up forever. They crash. Or, if we’re lucky, they correct.

Our efforts proved worthwhile: when Taos then experienced another time of bust (the Great Recession of 2008), we were ready, and we were able to hold onto most of our team, with revenues dropping just a little before growing yet again.

This wasn’t luck, it was learning. We learned a lot from the prior recession—about how to build resilience into our model and how to cut back sensibly and carefully to enable a quick spring forward when times improve.

Is today's economic bubble bursting?

When things change in the economy, they can change fast. I see signs of those changes happening today. In the last few years, we’ve gone from a short-lived downturn in the earliest months of Covid to the Great Resignation to what I can only describe as a shake-up of both.

So, here we are: The market is unpredictable. Layoffs are happening. Yet many companies still struggle to hire.

The Great Resignation has many similar patterns to the ones I witnessed and experienced in the dot-com boom. I remember losing employees to $1 million stock grants (which eventually became wallpaper); I remember companies being afraid to fire employees for fear of backlash; I remember the outrageous bonuses, the generous relocation packages, the end-to-end concierge services. That was the boom.

From tech boom to bust—staying in control as a leader

You have to be a certain age—at least 43 today—to have had a meaningful experience and memory of the crash that followed the dot-com boom. No one wants to go through another dot-com boom to bust. No one wants to fall even harder if today's tech bubble bursts.

But that’s not how humans tend to operate. Our memories of the past are short-lived, and our draw to exuberance is strong. As I think about the unpredictable situation in which we find ourselves, here are my personal guideposts as a leader:

Keep salary expectations reasonable. We’re at the mercy of the market, just like everyone else. We always have been. So we spend within our means. We don’t hire people with salary expectations we cannot afford and cannot sustain, or put our business out of balance. Leaders are no exception. We don’t pay our top leaders significantly more than our rank-and-file employees.

Spend thoughtfully. As a pre-Series A startup, I can’t imagine any other way. We carefully choose where to spend our money and we don’t do it frivolously. We don’t have that luxury.

Keep your team close. I keep my team informed, empowering them to make decisions with the same guideposts and values I use myself. I value loyal, earnest team members, and shuffle and share resources as necessary to ensure all needs are met across the company (versus having any one area overly staffed or overly resourced).

Make use of your network. Hearing what is working—or not working—at other companies in times like these is beyond insightful; it can change the course of your business. I’ve learned to make that phone call, send that email, and reach out to other C-suite leaders to see what they are doing. Whether it’s keeping communication lines open with their employees, reassessing benefits, or slowing hiring, it’s great to come together to get a sense of the approaches across industries.

Remember that you're in control. We all know change is inevitable, it’s the one constant. I’ve been talking about what I do as a leader, but one of the biggest lessons I try to impart through times of boom and bust to every individual is that we are each responsible for our own destinies. Things happen to individuals outside their control, yes, but how you prepare for down times as well as good, how you make yourself recession-proof, and how you adjust as markets adjust is totally within your control.

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5 ways to prepare for a bubble to burst

1. Own your brand

Whether you have followed the more modern trend of changing companies every few years, or you have been with the same company for 10, 20 or more, you need to take the time to assess, reflect, and evolve your brand story.

Your brand story is not a set of industry buzz phrases like “digital transformation expert” or “change agent.” It’s the unique story that shows who you are, what you are capable of, and that illustrates for others where you can take them. Your “Branded Career Portfolio” is your one-page bio, your resume, and very importantly, your aligned LinkedIn profile. Behind that is your internalization of how your brand translates, in good times and bad, to a variety of opportunities. Check out my summary on my LinkedIn profile to see how I position my brand.

2. Cultivate a meaningful and varied ecosystem around you

Investing in your network is an investment that no down economy can ever take from you. Good relationships will last through the decades. And it’s your loose connections, more than your closest connections, who will help you advance your career. So, get curious, and always be building your network with genuine intention and reciprocity in mind.

3. Choose jobs that serve your soul and your bigger picture

Title and name brand are definitely not everything. Sometimes a step down, a step sideways, or a total transition is what is best in the long-term to build a sustainable career that will allow you to become as big as you can be. Don’t think strictly in terms of straight lines and ladders. Think in terms of where you want to be 10 years from now, how you want to be living, who you want to be, and what you want to give to the world.

4. Resist pushing for everything you can get

The job you take should not be driven solely by the money and perks. And, just because you can push for more when it’s an employee-driven market, that doesn’t mean you should. As a woman, I’m deeply aware that women are not paid equally to our male counterparts. I’m not saying don’t advocate for yourself and demand the salary the role deserves. I’m saying resist pushing into extremes of exuberance.

Learn to read the signs. When my husband and I were leaning into real estate investing in the early 2000s, it wasn’t long before everyone we talked to was doing the same. That’s a signal that it’s not sustainable. If everyone around you is bragging about something that feels outrageous, it probably is.

5. Be or offer the solution; don’t show up to a job; rise to a challenge

It’s not true that in bad times “the last in is the first out.” You are not safe simply because you have been there the longest, or because you perform your role diligently. You are safe when you are invaluable, when you see bigger challenges and seek to find solutions. It’s not enough to be a problem identifier. You need to be a problem solver.

My most valuable teammates often end up redesigning their own jobs (sometimes multiple times). They evolve with the business and—as a result—the business evolves, too.

Stability and success require thinking longterm

My nearly 17 years at Taos proved the inevitability of change, including the ups and downs of the economy. At the end of the day, my best advice to myself for preparing for an economic downturn or bursting tech bubble is to always look ahead and hold a long view.

This is at the core of sustainability: sustainable business, sustainable careers, and sustainable lives require a long view.

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