Success of Companies in Recession
The investment market provides a gloomy image of the future since firms must compete with the threat of an approaching recession and a slowdown in the economy.
Several of the most successful businesses in the world were founded during recessions, despite the uncertain future. While some experts support caution and drawback, others believe that economic downturns can give the best opportunities for corporate growth.
Many firms have found significant success against the recession, which is promising for both entrepreneurs and the whole economy. Their success can be traced to both the economic context and the founder’s ability to adapt to the change.
Even the 1930s Great Depression was difficult for businesses of all sizes. Despite the economic collapse, certain companies formed during the Recession, such as American Airlines, HBO, and Microsoft are today’s shining examples of technology and entrepreneurial success.
Many of the other large company’s success stories begin with uncertainty or a dip in the economy. It simply implies that they were able to regain control of the situation and accomplish their visions despite hardship.
The success of recession-born enterprises is evidence of the entrepreneur’s inventiveness, drive, and ambition, demonstrating that even in difficult economic circumstances, there is still opportunity for success and growth.
It is important to recognize that having the correct technology and resources can assist businesses in mitigating the risks associated with an economic downturn. A digital innovation partner can help companies survive or even thrive while emerging as well-known recession-proof enterprises through careful preparation and creative techniques.
Businesses that started effectively during a global recession largely demonstrate that even an economic decline can assist to navigate the industry successfully, given we have a strong enough business vision.
This blog will look at a few unicorns that were created during the 2008 crisis. These companies launched during the recession will help you understand how economic downturns and market disturbance give rise to fresh startup adventures that produce an army of entrepreneurial leaders.
Before we go into the specifics of the unicorns that have bloomed even during a recession, let us first explain why you should not be afraid to establish your product during an economic crisis.
4 reasons why a recession is an excellent time to start a business.
Starting a business in the middle of a recession can be a difficult task. Yet, in retrospect, it may turn out to be the best option an entrepreneur could make. A firm may survive and prosper in a recession with the appropriate tactics and dedication. As a result, taking the risks related to launching a business during a recession is critical, as the potential profits of a business can be large.
There is less competition.
Business investments appear to decline during an economic crisis, and the market begins to collapse. This is an excellent time to strike with an extraordinary product that aligns with the vision of your brand.
Because your competition will be retreating, you will have an open field to acquire market share without spending a fortune on marketing and advertising. The weak competition will assist you in establishing a market presence while also allowing you to learn from and avoid the mistakes made by your competitors.
Getting the attention of the customer
As major firms close their doors and people hunt for alternatives, the recession makes it easier to attract the attention of your target clients. Your new startup can now provide them with the value they appear to seek in this shrinking environment. During this period, your business approach should be to act as a provider of knowledge that enables your target clients to make smarter financial decisions.
Better prices
When the economy is slow, prices tend to fall, causing businesses to compete by giving better bargains. It can be useful to a startup because it allows them to obtain important things at a lesser cost. Vendors, for example, can be prepared to negotiate on office rental space and furniture, resulting in better terms for startups.
Simple access to skilled employees
While the business is booming, it can be tough to find a focused product development agency with a diverse portfolio of experience in assisting startups to succeed. During an economic slowdown, delayed competition will allow you to engage an amazing digital partner capable of working according to your unique business requirements, all while staying within your budget. Your partnership’s financial profit will be a win-win situation for all parties concerned.
These are just a few of the reasons why the recession is an excellent opportunity to start your own business. Let us now look at some of the world’s unicorns that emerged during a recession.
3 successful startup companies were created during the 2008 recession.
This list of firms formed during the 2008 crisis has been compiled with their entrepreneurial path in mind, as well as how their innovative and recession-proof business concepts opposed investor expectations while emerging victorious and strong even during difficult times.
In 2009, during the recession, Facebook launched WhatsApp, a multiplatform messaging and voice-over-IP (VoIP) service. The startup was successful in providing a free, simple, and dependable messaging service that could be accessed via any smartphone or computer, independent of the operating system.
During the crisis of 2008-2009, WhatsApp was able to take advantage of the growing tendency of individuals to communicate using their smartphones. While people were cutting back on spending, they were still using their smartphones to keep connected with friends and family, according to the company’s founders.
Facebook paid $19 billion for WhatsApp in 2014, making it one of the greatest purchases in the tech industry. WhatsApp was able to continue growing and expanding its consumer base as a result of the acquisition, as well as boosting the company’s visibility and reach.
One of the important takeaways from WhatsApp’s business model is the significance of identifying and meeting user requirements, which contributed to the company’s survival during the recession. WhatsApp could appeal to a wide range of consumers even during a recession by delivering a simple, dependable messaging service that was free to use.
WhatsApp’s success is a tribute to the strength of identifying its target demographic, delivering a meaningful service, and being honest about data collecting procedures, even though it was founded during a recession. It also indicates that being purchased by a giant company like Facebook or Google can assist firms created during a downturn in their worldwide reach.
Uber
Uber is another great company that was launched immediately following the 2008 market meltdown. In 2009, Travis Kalanick and Garrett Camp founded Uber, a transportation network company. The startup found success by providing a ride-hailing service that links users and drivers via a mobile app.
Many people were seeking ways to save money on transportation during the crisis of 2008-2009. Uber’s focus on delivering a convenient and economical alternative to established taxi and car rental services attracted many customers.
Furthermore, Uber was able to streamline the transportation experience by leveraging a digital platform and smartphone app, making it simple for riders to request and pay for rides and for drivers to find and accept fares.
In addition to focusing on convenience and price, Uber prioritized safety and customer service. To safeguard the safety of riders and drivers, the firm has developed many safety features, including background checks for drivers and in-app emergency support. Uber provides 24-hour customer service and a rating system that allows users to review and submit feedback on their drivers.
Uber’s success can be linked to its focus on convenience and affordability, despite being one of the startups that started during the recession. Even during a recession, this helped the transportation app appeal to a wide variety of consumers.
Airbnb
Airbnb is a short-term accommodation internet platform launched in 2008 by Brian Chesky, Joe Gebbia, and Nathan Blecharczyk. Airbnb was one of the companies that thrived during the recession by connecting passengers with people who had extra space to rent out.
During the Recession of 2008-2009, many people looked for ways to cut travel costs. Airbnb began during the recession to provide a less expensive alternative to traditional hotels, making holiday rentals an appealing option for many consumers.
Airbnb was able to link visitors with hosts and streamline the accommodation experience by employing a digital platform and online marketplace, making it easier for tourists to search and book lodging and hosts to rent out their space. In addition to focusing on pricing, Airbnb prioritized safety and customer service.
Airbnb raised $1 billion in venture backing from Silver Lake and Sixth Street Partners in April 2020, making it a proud member of the recession-era success tales. The organization’s performance demonstrates the value of understanding its clients and harnessing technology.
Conclusion
Businesses that began during the crisis had a strategic philosophy of adjusting to changing consumer needs and priorities, and they succeeded both during and after the recession. Building a new firm that survives a recession is achievable in 2023 if you have a vision capable of filling the void produced by an economic slump.
Photo By: PEXELS
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