Updated: Jun 25
It may seem irresponsible to start a business during a recession or even worse, a depression. History has shown that it can actually work for you. The reasons vary, but the fact is there is less competition during tough times and there are many new unforeseen opportunities that arise from changing needs and desires.
Here are some household names that got their start during an economic downturn.
Netflix – was founded in 1997 by Reed Hastings as a DVD rent by mail business. It all started when he was charged a $40 late fee for not returning a DVD to a local Blockbuster retail store. It gave Reed Hastings an idea to launch Netflix to become what is now a $32billion dollar business. Being an innovator from the beginning, he shifted to streaming video which Blockbuster failed to embrace. Blockbuster passed on an opportunity to purchase Netflix during the 2000 dot-com bubble burst. Blockbuster now resides only in history books for making a fatal mistake.
Airbnb – was founded in 2008 during the “Great Recession”. It all started when a couple of tech entrepreneurs Gebbia and Chesky launched an online platform to rent out a bed in their San Francisco apartment. When the Great Recession hit that same year, there became a demand for short-term rentals because of high rent alternatives. Within 1 year, the site had over 10,000 users and 2,500 listings. A great story for history.
Microsoft – founded in 1975 while the US was in the middle of “stagflation, Bill Gates and Paul Allen started work on user-friendly software for home and office computers. In the first year, they had $16,000 in revenue ($400,000 in today’s dollars). In the early 1980s, Microsoft partnered with IBM to bundle its Windows operating system on every desktop computer it sold. As a side note, IBM was founded during the “Long Depression of 1873-1896. Microsoft overcame the odds during a bad economy and has remained one of the most successful companies in the world.
Revlon – was founded in 1932 as a cosmetic company. Its first two products were a red nail polish “Cherries in the Snow” and a lipstick to match became an immediate success. By the end of WW II, it had become the number two cosmetics company in the US. Today, the company is worth $ 3 billion. The phenomenal success of the company coined the term “The Lipstick Effect” which has proved how the beauty industry remains recession-proof.
Disney – was founded in 1929 at the peak of The Great Depression by Walt and Roy Disney. From their garage, they created Mickey Mouse, the first animation to hit the Big Screen in theaters and the first to add synchronized sound. During the dark days of the time, people responded greatly to the whistling cartoon mouse steering a ship down the river. Later, they found additional success by creating the first animated feature film, Snow White and The Seven Dwarves in 1937. Today, Disney is a $130billion company with theme parks around the world. The Depression Success Story is one of the most famous ever created.
The common link with these and other stories like them is that most people need a little inspiration to start something. Staying in it for the long run by being innovative and resilient can create an eternal legacy.
Have you got a story to be told and have a burning desire to create a startup? Do you have a good idea?
Wondering what successful entrepreneurs are like and how they think? I have worked with thousands of entrepreneurs over the last 4 decades and documented a few of my favorite traits in an eBook. Get it for free, Traits of Successful Entrepreneurs.
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