Believe it or not, the fear around us today is real.
Globally, markets have responded to the novel coronavirus (COVID-19) with worrying volatility and traders have panic-sold out of fear. Capital is drying up. Many businesses have already gone under. Massive layoffs have already started across the globe and much more is likely to come.
Let there be no doubt: the global economy is heading into a possible recession that is likely to shake the world to its core. This fear may stop many would-be entrepreneurs out there as market instability is often the first and perfect excuse to shelve entrepreneurship dreams.
Before we discuss anything more, it is time to accept that starting a business is incredibly difficult and challenging times like the present pose even more obstacles between you and success. But isn’t that what entrepreneurship is all about? Identifying and creating opportunities in places others have written-off or overlooked? Leaning into the obstacles?
If your answers are in the affirmative, why should these difficult times ahead be any different? Truth be told, this is just the perfect opportunity to deliver real value to the world.
How can I be so sure telling you that? Well, recessions across the world have actually served as the perfect launchpad for some of the world’s most amazingly successful businesses if history proves to be any sort of reliable predictor.
Need a proof? Let us have a look at 13 massive companies that were born out of recessions:
- General Electric
Year Launched: 1892
2019 Revenue: $95.2 Billion
Thomas Edison and company launched General Electric just as the nation was leading into the panic of 1893, which was a period of approximately 16 months when business activity dropped nearly 40 percent across the nation.
Nevertheless, General Electric persisted and went on to become one of the original 12 companies listed on the Dow Jones Industrial Average in 1896.
- General Motors
Year Launched: 1908
2019 Revenue: $137.2 Billion
In 1904, General Motors Founder William Durant made his transition into the newly-created automobile industry though his business was still manufacturing horse-drawn carriages in the late 1800s with his purchase of the Buick Motor Company. However, it was not until early 1908 that Durant decided to launch General Motors as a holding company for acquiring even more automobile manufacturers.
This innovative strategy worked well for General Motors as it went on to become one of the largest corporations in the history of the world.
Year Launched: 1911
2019 Revenue: $77.1 Billion
The International Business Machines Corporation (IBM) was launched as the Computing-Tabulating-Recording Company (CTR) by Charles Flint in June of 1911. It started by selling business and commercial machines right in the middle of a panic that lasted for two years.
While industries everywhere were witnessing double-digit declines in activity, CTR actually thrived, changed its name to IBM, and went on to become the global leader in technology.
Year Launched: 1939
The recession of 1937-1938 would end up being one of the world’s worst recessions of the 20th Century though it is considered small compared to The Great Depression. With GDP decline reaching nearly 19 percent, Stanford graduates William Hewlett and David Packard decided to initiate a plan for Hewlett-Packard, their new electronics company. The business was incorporated on January 1, 1939 and the Stanford graduates went on to build one of the worldwide powerhouses in computers.
Year Launched: 1929
2019 Revenue: $69.6 Billion
Bothers Walt and Roy Disney introduced the world to Mickey Mouse in 1928 through their short-animated feature Steamboat Willie. In 1929, Walt and Roy incorporated Walt Disney Productions right as the Great Depression was knocking on the doors.
America needed a smile and Walt Disney Productions managed to give a lot of it to people. The duo worked on their first full-length animated feature (a little movie called Snow White and the Seven Dwarves) right after The Great Depression ended.
Year Launched: 1957
2019 Revenue: $5.0 Billion
Entrepreneur Jay Pritzker purchased the Hyatt House motel near Los Angeles International Airport two months into the recession of 1958. Pritzker pushed on despite travel and business activity slowing down and he went on to open additional hotels before the end of the decade. This collection went on to grow to approximately 900 properties and annual revenues exceeding US$5 billion dollars.
Year Launched: 1971
2019 Revenue: $65.5 Billion
FedEx Founder Fred Smith initially developed the concept of reliable, fast, and efficient door-to-door cargo delivery as part of a school project while at Yale. On the tail end of the recession of 1969-1970, Smith launched FedEx despite facing major challenges in his attempts to sell a new and unheard type of service to a business community that was reluctant to spend money on untested vendors. He went on to grow a business that delivered over 6 million packages a day in 2019.
- Trader Joe’s
Year Launched: 1958
2019 Revenue (Estimated): $13.3 Billion
Trader Joe’s was another business that found its roots during the recession of 1958. It originally started under the name Pronto Markets in Southern California. Joe Coulombe, its founder, made a return to the United States from a vacation in the Carribean and thought of exploring the opportunity to offer unique international food offerings in his stores. The concept stuck and his business grew rapidly before he sold it to German billionaire Theo Albrecht in 1979.
Year Launched: 1975
2019 Revenue: $125.8 Billion
Bill Gates and Paul Allen started their computer software business Microsoft amidst an oil crisis coupled with a stock market crash that led to a 16-month recession where Gross Domestic Product took its worst hit in nearly 20 years. The company was launched on April 4, 1975 just days after the recession was considered officially over. Within a period of one decade, Microsoft grew substantially and created 3 billionaires and 12,000 millionaires in the process after launching an IPO in 1986.
- Electronic Arts
Year Launched: 1982
2019 Revenue: $4.5 Billion
The 1981–1982 Recession that was promoted by the 1979 energy crisis brought some of the worst-ever unemployment rates seen in decades. However, the recessionary environment did not stop Trip Hawkins from leaving his job at Apple and starting a new software company called Electronic Arts that went on to become a prominent provider of games for the booming entertainment system and home computer market. It evolved into a giant with over US$5 billion in annual revenue and 10,000 employees.
Honorable Mentions: Google, Salesforce, and Facebook
Google, Salesforce, and Facebook didn’t technically start during recessions but they were launched just before economic meltdowns: Google (1998) and Salesforce (1999) right ahead of the dot-com bubble burst while Facebook (2004) was launched shortly before the Great Recession. These three companies managed to post a whopping US$72.77 billion in revenue in 2019 alone.