The prolongation of bear market for investments paints a harsh picture of the future, as the specter of an economic slowdown and a probable recession looms large over businesses.
Despite the uncertain future, many of the world’s greatest companies were built during recessionary times. While some experts are advocating caution and retreating, others are of the opinion that economic downturns can present the most opportune moments for growing a business.
Undeterred by the recession, many startups have seen tremendous success and growth, a fact which is encouraging for entrepreneurs and the general economy alike. Their success can be attributed to both the economic climate and the way that the founders have adapted to it.
Even The Great Depression of the 1930s was a difficult time for businesses of all sizes. Despite the economic downturn, some companies founded during the great depression, like American Airlines, HBO, and Microsoft, are the beacon of technological and entrepreneurial success today.
Many of the other major businesses’ success stories started with uncertainty or a low point in the economy. It simply means they were able to take control of the situation and realize their visions, even in the time of adversity.
The success of recession-born startups is a testament to the creativity, drive, and ambition of entrepreneurs, which further represents that even in times of economic strife, there is still potential for success and growth.
It is vital to understand that having the right technology and resources can help entrepreneurs mitigate the risks that are originated from an economic downturn. A digital innovation partner, through careful planning and innovative strategies, can help the startups survive or even thrive while emerging as the famous recession-proof businesses. (Read here how to make your business recession-proof)
The businesses originating successfully at the times of a worldwide recession primarily tells us that even an economic downturn can help us tread the waters strongly if we have a strong enough business vision.
This article will reflect on a few unicorns that were bred at the time of the subprime crisis of 2008. These companies founded during the recession will help you understand how economic downturns, as well as market upheavals, give rise to new startup journeys where a battalion of entrepreneurial leaders will be created.
Before diving into the details of the unicorns that have successfully excelled even during a recession, let us first help you understand a few reasons why you shouldn’t hesitate in building your own product during an economic downturn.
4 Reasons why a recession is a right time to start your business:
Beginning a business during a recession can be a challenging endeavor. Nonetheless, in hindsight, it may prove to be the most beneficial decision one could make as an entrepreneur. With the right strategies and dedication, a business can survive and thrive in a recession. Therefore, taking risks associated with starting a business in a downturn is essential, as the potential rewards may be worthwhile.
Less competition
During an economic downturn, businesses’ investments seem to decrease, and the market starts to fold. This is the perfect moment to strike with an exceptional product that resonates with your brand’s vision.
Since the competitors will be pulling back, you will have an open field to gain market share without spending vast amounts on marketing and advertising. The weakened competition will help you set a foothold in the market while paving the way for you to learn and avoid the mistakes made by your competitors.
Capturing customer attention
Recession makes it easy to capture the attention of your target customers, as major businesses will shut their doors, and customers will look for alternatives. Your new startup can now offer them the value they seem to find in this closing economy. Your business strategy during this time should be to act as a purveyor of information that allows your target customers to make better financial decisions.
Better rates
When the economy is weak, prices tend to decrease, prompting businesses to remain competitive by offering better deals. This can be advantageous to a startup like yours, as you can acquire necessary items for lower prices. For example, vendors may be willing to negotiate on office rental space and furniture, resulting in more favorable terms for you.
Easy access to a talented pool of experts
A dedicated product development agency with a broad range portfolio in helping startups succeed is difficult to find when the industry is booming. During an economic downturn, the slow competition will help you hire an exceptional digital partner capable of working as per your custom business requirements, that too on a cost-effective budget. The financial gains offered by your partnership will be a win-win situation for all parties involved.
These are a few reasons why the recession is the right time to start your own business. Let us now take a look at a few unicorns of the world that originated during a recession.
7 successful startup companies founded during the recession of 2008:
This list of companies founded in the 2008 recession has been curated keeping in mind their entrepreneurial journey and how their unique and recession-proof business ideas defied investor expectations while emerging victorious and strong even during uncertain times.
WhatsApp is a multi-platform messaging and voice-over IP (VoIP) service owned by Facebook and is one of the most famous companies founded during the recession in 2009. The company successfully offered a free, simple, and reliable messaging service that could work on any smartphone or computer, regardless of the operating system.
During the subprime crisis of 2008-2009, WhatsApp was able to capitalize on the growing trend of people using their smartphones for communication. The company’s founders recognized that while people were cutting back on their expenses, they were still using their smartphones to stay connected with friends and family.
In 2014, Facebook acquired WhatsApp for $19 billion, making it one of the tech industry’s largest acquisitions. The acquisition allowed WhatsApp to continue growing and expanding its user base and helped increase the company’s visibility and reach.
One of the key takeaways from WhatsApp’s business model is the importance of understanding and addressing consumer needs which further helped it emerge as a business that survived recession. By providing a simple, reliable messaging service that was free to use, WhatsApp could appeal to a wide range of users, even during a recession.
Being one of the companies that started during a recession, WhatsApp’s success is a testament to the power of understanding its target audience, providing a valuable service, and being transparent about data collection practices. It also tells us that being acquired by a giant like Facebook or Google can help the startups founded in recession achieve their global reach.
[Bonus Read: How To Determine WhatsApp Development Costs: A Complete Guide]
Uber
Uber is another one of the successful companies founded right after the market crash of 2008. Travis Kalanick and Garrett Camp launched the transportation network business by the name Uber in 2009. The company achieved success by offering a ride-hailing service that connects riders with drivers through a mobile app.
During the subprime crisis of 2008-2009, many people were looking for ways to save money on transportation. Uber’s focus on providing a convenient and affordable alternative to traditional taxi and car rental services made it an attractive option for many consumers.
Additionally, by using a digital platform and mobile app, Uber was able to streamline the transportation experience, making it easy for riders to request and pay for rides and for drivers to find and accept fares.
[Also Read: How to Develop an Uber Clone App using Location Based Services?]
In addition to its focus on convenience and affordability, Uber also made sure to prioritize safety and customer service. The company has implemented several safety features, such as background checks for drivers and in-app emergency assistance, to ensure the safety of riders and drivers. Uber offers 24/7 customer support and a rating system that allows riders to rate their drivers and provide feedback.
Being one of the startups founded in the recession, Uber’s success can be attributed to its focus on convenience and affordability. This helped the transportation app to appeal to a wide range of consumers, even during a recession.
If you wish to learn more about the revolutionary transportation app, check out our blog post titled: How Uber Works: Breaking down the Uber Business and Revenue Model
Airbnb
Airbnb is an online marketplace for short-term lodging that was founded in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk. Being one of the companies that started during a recession, AirBnB succeeded by connecting travelers with people with extra space to rent out.
During the Great Recession of 2008-2009, many people sought ways to save money on travel expenses. Airbnb started during the recession and focused on providing a more affordable alternative to traditional hotels, making vacation rentals an attractive option for many consumers.
[Also Read: How Much Does Airbnb Like App Development costs?]
By using a digital platform and online marketplace, Airbnb was able to connect travelers with hosts and streamline the lodging experience, making it easy for travelers to find and book lodging and for hosts to rent out their space. In addition to its focus on affordability, Airbnb also made sure to prioritize safety and customer service.
Being a proud member of recession-era success stories, Airbnb’s raised $1 billion in investment funding from Silver Lake and Sixth Street Partners in April 2020. The success of the organization is a testament to the power of understanding its customers and leveraging technology.
For more information on the most preferred hospitality app, check out our blog post on Airbnb’s Business Model & Revenue Source.
Pinterest is another one of the famous companies founded during the recession. It is a popular social media platform where users can discover, save and share visual content such as images and videos. Founded in 2009 by Ben Silbermann, Paul Sciarra, and Evan Sharp, Pinterest became known for its innovative approach to content discovery and curation.
Amid the 2009 financial crisis, Pinterest found success by focusing on its core product offering and user engagement. The platform offered users an engaging and inspiring escape during a time of uncertainty and stress. By providing a platform where users could discover new ideas and interests, Pinterest stood out from other social media platforms and attracted a large, active user base.
From a business perspective, Pinterest’s success can be attributed to several key factors. First, the company’s focus on user-generated content fostered a sense of community and engagement among users. Second, Pinterest’s unique approach to advertising and monetization allowed it to generate significant revenue without compromising the user experience.
The company used targeted advertising, affiliate marketing, and sponsored content to generate revenue while providing valuable information to users. Finally, Pinterest’s commitment to protecting user privacy and data has helped it maintain trust and credibility with users.
If you too are looking to leverage from an app like Pinterest, check out our blog on How Much Does Pinterest Like App Development Cost?
Slack
Slack is one of the popular communication and collaboration startups founded during the recession that has transformed the way organizations communicate and work.
During the 2009 financial crisis, Slack found success by filling a gap in the market for an efficient and effective communication tool for remote teams. With many companies shifting towards remote work due to the economic downturn, Slack’s focus on making remote collaboration seamless and effortless resonated with businesses and professionals who were seeking a more efficient way to communicate and collaborate.
[Also Read: What are the Elements for Interactive Chat Bots Apps]
Known as one of the successful recession-born startups, the company’s focus on user experience and ease of use has allowed it to attract and keep a large user base. Secondly, Slack’s integration with other popular tools and services, such as Google Drive and Trello, has made it an indispensable tool for organizations. The company’s commitment to constantly improving its product and adding new features has helped it to remain relevant and competitive in a rapidly evolving market.
Slowly unfolding as a recession-proof business, Slack’s success can also be attributed to its strong focus on customer success. The company has a dedicated team of customer success managers who work closely with clients to ensure that they are getting the most value from the platform.
Venmo
Venmo is a mobile payment platform that emerged as one of the triumphant companies started during a recession. It has revolutionized the way individuals transfer money to each other.
In the 2009 financial crisis, Venmo paved the way to success by providing a simple and convenient solution to a common problem – transferring money to friends and family. With many individuals struggling financially during the recession, Venmo’s focus on making money transfers quick and hassle-free resonated with a large user base and made it come out as a recession-proof business.
[Bonsu Read: A Quick Guide to How to Build a P2P Payment App Like Venmo]
There are multiple factors that contributed to the success of this business that survived the recession. Firstly, the company’s focus on mobile and its integration with popular social media platforms, such as Facebook, has allowed it to attract and retain a large user base. Secondly, Venmo’s innovative approach to payments, including its use of social media-style feeds to display transactions, has made it a standout player in the crowded payments space.
Finally, Venmo’s success can also be attributed to its strong focus on security and privacy. Being one of the companies that started in recession, the company has robust security measures in place to protect user data and transactions, and it is transparent about its security practices, which has helped it build trust and credibility with its users.
Instagram is a popular recession-proof business that survived the economic downturn from 2007 to 2009. The photo and video-sharing platform has transformed the way individuals and businesses share and consume content online. Founded by Kevin Systrom and Mike Krieger in 2010, Instagram quickly gained popularity among users for its simple and intuitive interface, as well as its focus on visual content.
In the aftermath of the 2009 financial crisis, Instagram found success by providing a new and engaging platform for users to share and discover visual content. With many individuals and businesses looking for ways to connect with their audiences online, Instagram’s focus on beautiful, high-quality content and its ability to reach a large and diverse user base made it a valuable tool for marketers and businesses.
Being one of the recession-proof companies, Instagram’s focus on mobile and its integration with popular social media platforms, such as Facebook, has allowed it to attract and retain a large user base. Its use of algorithms to curate content and its innovative features, such as filters and stories, have further helped it to remain relevant and competitive in an ever-evolving market.
Instagram is one of the recession-proof tech companies whose success can also be attributed to its strong focus on community and collaboration. A splendid example of recession-born startups, the platform has a large and active user base, and its focus on connecting users through shared interests and passions has helped it to foster a sense of community and engagement among its users. Regarded as one of the tech companies founded during the great recession, Instagram has established itself as a leader in the social media and visual content-sharing space.
[You may also be interested in reading How much does it Cost to Develop App like Instagram]
The Final Note
Companies that started during recession had the strategic mindset of adapting to the shifting consumer needs and priorities and came out with flying colors during and after the recessionary period. Jumping to 2023, building a new business that survives a recession is possible if you have a vision that is capable of filling the gap created by an economic downturn.
Appinventiv is an innovative digital transformation services company that can help you put things into perspective while guiding you on the right path to emerge stronger and better during this economic downturn. Our digital product development services can prepare you for a long-term ascendancy, no matter what the latest economy throws your way.
Our developers are capable of integrating the latest technologies and use out-of-the-box engineering methods to give your businesses a scalable and reliable edge in these demanding times.
Get in touch with our team if you wish to embark on your entrepreneurial journey and emerge as a business that has survived the recession.
FAQs
Q. What are the companies that grew during the 2008 recession?
A. The companies that grew during the 2008 recession include the likes of Instagram, WhatsApp, Uber, Cloudera, Slack, and more. These organizations were able to fill in the gaps created due to an economic downturn and emerge successful in their vision despite all the exigent circumstances.
Q. Which industries were hit hardest by the 2008 recession?
A. The industries hit hardest by the 2008 recession include retail, restaurants, travel, hospitality, service providers, real estate, & manufacturing. Thus, it is vital to have a product that is capable of treading the waters and offers a unique view of the entire economic ecosystem.
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