Thinking about opening a new company during a recession may sound risky because the outlook seems uncertain and the economic implications are unknown. But it turns out, in many ways, creating a startup in an economic downturn can potentially work to your advantage. There’s not only plenty of fresh and unexpected challenges to tackle, but you’re up against even less rivals.
Yes, several businessmen who saw opportunities and took chances in tough economic conditions have ended up making some of today’s most instantly-recognizable brand names.
Below are only a handful of big names that were formed during recessions.
1. Netflix
Year founded: 1997
Legend has it that creator Reed Hastings was inspired to launch an online rental of DVDs via mail service after Blockbuster paid a $40 late fee for failing to return his copy of Appollo 13 on time. The fledgling corporation nearly crumbled in an unfortunate twist of events many years later when Blockbuster made the tragic mistake of trying to buy it out during the dot-com bubble crash of the early 2000’s.
However, Netflix has weathered the hurricane by harnessing its revolutionary spirit to create the online on-demand entertainment service we know today, leaving it forever in the dust as its brick and mortar rival. Today, due to the current higher-than-ever demand for home-based entertainment, Netflix is worth almost $34 billion, and has quickly grown to the most valuable subscription-based online entertainment service.
2. Microsoft
Year founded: 1975
Two nerdy college dropouts, Bill Gates and Paul Allen, were hard at work in the mid-1970s, when the US was steeped in stagflation, creating the idea of user-friendly computer software for home and office computers.
By 1975, they formally founded their company in Albuquerque under the name Microsoft, which, by the end of the following year, saw total revenues of $16,000 (about $400,000 in today’s money). Microsoft formed a relationship in the early 1980s to package their products with software giant IBM (founded during “The Long Depression” from 1873-1896).
In a bad economy Microsoft beat the odds and still to this day remains one of the world’s most valuable companies.
3. Airbnb
Year founded: 2008
The multibillion dollar company was born in August 2008, when tech pioneers Joe Gebbia and Brian Chesky launched a basic web website in their apartment in high-rent San Francisco to rent out an air mattress. As the Great Depression struck in the same year, the demand for living quarters of short-term, small investment immediately grew exponentially. By March 2009, the site had more than 10,000 users and 2,500 listings, and large-name investments soon began flying in. The rest, that’s history. Airbnb is now the most trusted online lodging marketplace in America.
4. Warby Parker
Year founded: 2010
During the Great Recession Warby Parker was created by four friends who concentrated on the idea that fashion-forward frames were simply not affordable for the average adult. The groundbreaking home try-on system and competitive price points from the brand effectively challenged the once-monopolized eyewear prescription market. Today, due to its recession-proof pledge to budget-minded clients, the business is worth $1.7 billion.
5. Trader Joe’s
Year founded: 1958
The well known grocery store had a modest beginning as a conventional los angeles.-based convenience store chain called Pronto Markets, founded in the late 1950s stagnant economy. It wasn’t until 1967 that creator Joe Colombe, influenced by a recent trip to the tropics, rebranded his “Trader Joe’s” shop and transformed it into the arsty tiki-themed foodie love-fest that we know and love today. The company now runs nearly 300 stores across the US and relies on them for high quality affordable groceries.
If you’re like many others who need an inspiration boost right now, look at the many strong who creative businesses that have not only survived in the hardest days of all odds, but are continuing to flourishing to this day.
Opinions expressed by AsianBlurb contributors are their own.
