5 successful companies that started in a recession
It is more common and easier to start a business when the economy is doing well versus when it is not. But no sector exists without exceptions. And the business world certainly doesn’t. There have been and there are always certain people who find opportunities in the times of recession and optimize them to create a billion-dollar business. Here are some of them.
Year launched: 1975 (during the global recession 1974-75)
Founders: Bill Gates & Paul Allen
Revenue: USD 125.8 billion (2019)
Problem: The need for a programming language for the popular microcomputer Altair 8800 by MITS.
Solution: “Micro-Soft” i.e. micro-computer software, a working interpreter for Altair 8800 in BASIC language.
Company Growth: In 1973, an oil crisis coupled with a stock market crash led to a 16-month recession where the GDP took its worst hit in nearly 20 years. The interpreter worked and MITS agreed to distribute it. Allen moved and Gates left Harvard and devoted themselves to their company. By the end of 1976, the company crossed a turnover of $16,005. Their first international office opened in 1978 in Japan. The company then started creating Operating Systems, the initial ones being based on BASIC since it was a popular programming language at that time. But it boomed with the development of MS-DOS which was also licensed by Microsoft and also used in IBM Personal Computers.
Year launched: 2009 (during the Great Recession 2008-09)
Founders: Brian Acton & Jan Koum (former employees at Yahoo!)
Revenue: USD 15 million (in the first half of 2014, later acquired by Facebook)
Problem: To create a messaging app that would show statuses next to people’s names.
Company Growth: Even though the initial versions kept crashing and one of the founders wanted to give up and look for a new job, he stayed, and then WhatsApp 2.0 led to the increase in a number of users to 250,000 n 2009 itself. Then there was no looking back. WhatsApp was one of the top 20 apps at Apple’s US app store in 2011. It introduced voice messaging in 2013 and also acquired over 400 million users by the end of 2013 and then Facebook acquired WhatsApp at USD 19 billion (its largest acquisition to date).
Year launched: 1929 (during the Great Depression 1929-33)
Founders: Walt Disney and Roy Disney
Revenue: USD 69.57 billion (2019)
Problem: The Great Depression
Solution: To create something that spread smiles during tough times.
Company Growth: Mickey Mouse was born in 1928 followed by the incorporation of Walt Disney Productions Limited in 1929. Other characters of Disney gang like Donald Duck, Goofy, Pluto, etc. were also created gradually. Disney spread smiles not only through series and animated movies but it also started comic series with New York Mirror and started streaming in color by 1932. “Snow White & the Seven Dwarfs” premiered by the end of 1937, the first feature-length animated movie. But this didn’t mean the company only saw success in its endeavors. There were a lot of package films in the 1940s that performed poorly at the box office and there was a shortage of team and operating capital due to World War II. Disney never gave up on Disney. Disney began its television journey in 1950 and also formed its distribution arm, Buena Vista Distribution by 1953. Disney has faced a series of rising with successful family movies and falls with the death of the founding members. Disney’s story is truly inspiring. It always has and hopefully will continue to strive and overcome every challenge that it faces. (Source: https://en.wikipedia.org/wiki/The_Walt_Disney_Company#Corporate_history)
FedEx (Federal Express)
Year launched: 1971 (Right after the Recession of 1969-70)
Founders: Fredrick W. Smith
Revenue: USD 65.5 billion (2019)
Problem: The shippers at that time relied on passenger routes for logistic transfers, but it was not suitable for urgent shipments like medicine, computer parts, and electronics.
Solution: A system specifically designed for time-sensitive shipments for delivery within one to two days.
Company Growth: The greatest challenge was that it was an entirely new industry and the recession had just got over. The company officially began operations in 1973 but didn’t show any profits until 1975. It established and became a leader in the air-cargo shipping industry. Federal Express was well-established by the 1980s and earned a revenue of DSD 1 billion in 1983. It started International shipping in 1984 and adopted the name FedEx in 1994.
Year launched: 2008 (at the beginning of The Great Recession)
Founders: Brian Chesky & Joe Gebbia
Revenue: USD 2.6 billion (2017)
Problem: The founders had to pay for their housing.
Solution: They rented a part of their apartment to help with their costs.
Company Growth: The founders wanted to change the way people thought about traveling and so they started AirBed & Breakfast. Airbedandbreakfast.com offered short-term living quarters, breakfast, and a business networking opportunity for those who were unable to book a hotel in a saturated market. By March 2009, the site had 10,000 users and 2,500 listings, and the company name was shortened to Airbnb.com.
These are 5 companies, each from different industries that started during different eras, yet with their determination, they were successful in their business. Opportunities need to be identified. Even little problems can become big businesses, and the recession won’t affect success. So, what are you still waiting for?