If you look at history, you will find several startups that were founded during a recession. With the economy deteriorating, the global recession is indeed a difficult time for all businesses, however, it does provide entrepreneurs with opportunities as well. As famously said, necessity is the mother of innovation; scarcity drives entrepreneurship. Here are the 10 most famous startups that were launched during or right after a recession.
In the early 1970s, the USA experienced a long-lasting economic depression. The GDP took a serious hit and got its worst position for several years after. However, Bill Gates and his friend Paul Allen saw this recession as an opportunity and got to work. They soon came with the idea of easy home and office computing, which led to the birth of Microsoft. This also shows that even a global recession should not stop you from working on an idea. Instead, you should make use of technology at your disposal and constantly innovate. This is what Bill Gates did, and you can see the results. Today, Bill Gates is one of the richest people in the world, and Microsoft is one of the most successful companies in the world.
Apple is also one of the most successful companies in the world. It was launched in 1975. However, Apple that exists today was brought around after the dot-com bubble in 2001. The financial crisis caused setbacks to a myriad of businesses, however, Apple remained steadfast and continued to innovate. The team worked harder and came up with new products.
Despite difficult times due to the recession, Steve Jobs came up with the iconic iPod and started building it. It became a hit immediately after its launch in October 2001. It also paved the way for the iPad and iPhone and helped establish Apple as the leading consumer electronics brand then and now.
Airbnb revolutionized the travel industry after its launch in August 2008. Co-founders Brian Chesky and Joe Gebbia decided to rent out air mattresses to conference participants because all nearby hotels were all booked. This was when the idea of Airbnb came to them.
Despite existing during a troubling time, the company obtained 10,000 users and 2,500 listings in less than a year. In 2019, the company was worth $31 billion.
Groupon was founded during the 2008 recession. The company was originally called The Point. This was a business idea based on online collective action and fundraising. After the company failed, founder and CEO Andrew Mason pivoted and launched Groupon. Andrew took the original idea and applied it to local deals.
Groupon was launched in November 2008. It achieved more than $100 million in sales in 2 years. Not only did Andrew bounce back after the initial failure, but he also overcame hard economic times during the recession. Groupon showed brands and companies a unique way to introduce their products. The company went on to become a unicorn startup,
Read: Interview with Andrew Mason
Whatsapp is one of the prime examples of startups founded during a recession. Former Yahoo! employees, Brian Acton and Jan Koum founded the instant messaging app. They wanted to create an app that could be used to send messages instantly, and which would show people’s statuses next to their names. They hired a Russian developer from the internet and went on to launch the app in 2009. It soon became the world’s most popular messaging platform.
Mailchimp was originally launched in 2001. It had an entirely different business model back then. It initially served only big clients with yearly retainers. However, the global economic recession in 2008 caused the company to rethink its business. The company changed its business model, and added a freemium plan in 2009. As a result, Mailchimp saw a staggering increase in its userbase.
Flickr co-founder Stewart Butterfield created Slack in 2009. It has become one of the most popular work messaging and sharing apps, especially during the current pandemic crisis. Slack was founded during The Great Recession is well. Stewart thought it was a great time to build a platform for business communication. The company is worth more than $20 billion today.
Travis Kalanick and Garrett Camp founded rideshare giant Uber in 2009. The company revolutionized the global taxi industry and secured 2 thirds of the market share by 2019.
Originally called Ubercab, the company has expanded to several countries. It has also added on multiple platforms like food delivery service and uber bike. In 2019 the company went public. It currently has a valuation of more than $40 billion.
Instagram is perhaps one of the most popular unicorn startups. After the 2008 financial crisis, Instagram was born. Proof that a recession can lead to invention.
Kevin Systrom and Mike Krieger co-founded Instagram. Originally called Burbn, the application was launched in October 2010. It attracted 25000 users on the first day. In 3 months, the photo-sharing app hit 1 million users. Currently, Instagram has more than 1 billion monthly active users and is arguably the most popular social network worldwide.
Ben Silberman developed Pinterest in 2009 and launched it in 2010. Pinterest literally became the scrapbook of the internet, allowing users to upload pictures and other various media content using collections called pinboards. Pinterest IPO’d to a valuation of $10B and is one of the most successful startups to come out of a recession.
These were 10 most famous startups founded during a recession. Do you still think a recession is an excuse to not work on your idea and dream? The global economic crisis is indeed a challenging time. However, it may also be a perfect time to focus, identify, innovate, and create. Share your thoughts in the comments section below.
Also read: What to invest in during a recession