Despite conventional wisdom, recessions and depressions create opportunities for new businesses and entrepreneurs.
Here are a number of well know companies that got started during economic hardship:
Procter & Gamble
Industry: Household products & cosmetics
Founded: The Panic of 1837
Procter & Gamble started with selling candles and grew as a multimillion dollar company. It is behind a number of household name products like Ariel, Head & Shoulders, Pantene, Tide and many more. P&G has a record of doing well through recessions and depressions, continuing to spend on advertising during tough times when others cut back. It has worked as they have created an empire dominating the beauty, healthcare and household care market.
Founded: The Long Depression, 1873-1896
IBM started out with punch card machines in the midst of a lingering depression. When the Great Depression hit, IBM hired new employees, continued growing operations and building inventory.
Initially christened as Tabulating Machine Company, it grew as International Business Machine becoming, at one time, the 4th largest technology company and the 2nd most valuable brand in the world.
Industry: Energy and consumer electronics
Founded: Panic of 1873
Famed American inventor Thomas Edison founded the company by aligning many of his interests under Edison General Electric. Later in 1892 it merged with Thomson-Housten Company and as a result General Electric was formed. It has come a long way and is excelling in infrastructure, media, finance, healthcare, information and entertainment and environmental technologies.
Founded: The Panic of 1907
General Motors started as a holding company of Buick. The founder William Durant saw the opportunity when everyone else was frozen in fear of the economic downturn. He proceeded to buy small car builders and eventually General Motors created history as the undisputed leader in automobile manufacturing from 1931 to 2008. Unfortunately the company lost it’s strong routes and became more focused on financial wizardry than making cars, which ultimately led to its downturn which was made famous when it was bailed out by the U.S government in 2008.
United Technologies Corporation
Founded: In 1929, amid the Great Depression
Founded as the United Aircraft and Transport Corporation, it was renamed to United Technologies Corporation in 1975. Its business units consists Carrier, Hamilton Sundstrand, Otis, Pratt & Whitney, Sikorsky Aircraft, UTC Fire & Security and UTC Power. It’s the largest conglomerate in the United States and a major military contractor.
Founded: The Oil Crisis of 1973
The idea for FedEx came from an assignment Frederick Smith wrote while an undergraduate at Yale about how the mail delivery companies of the day were inefficiently using the passenger air routes for package delivery. Originally called FDX Corp., it became FedEx Corp. in January 1998 with the acquisition of Caliber System Inc. It diversified from an express delivery service to FedEx Express, FedEx Ground, FedEx Freight, FedEx Office, FedEx Custom Critical, FedEx Trade Networks and FedEx Services.
Founded: Economic Recession 1957-58
Hyatt Hotels Corporation opened its first hotel’s doors at the Los Angeles International Airport during the Eisenhower recession (1957 to 1958). It came into limelight after opening the Hyatt Regency Atlanta, world’s first atrium hotel. Starting from buying the Hyatt House it grew into major Hotels chains around the world.
Founded: Economic Recession 1958
International House of Pancakes is another star from the Eisenhower recession. The first IHOP restaurant opened in 1958 in Toluca Lake, California. The chain has almost 1500 restaurants in all the 50 states of United States serving more than 700m pancakes every year.
Founded: Panic of 1975
Microsoft Corporation wasn’t always the jaw-dropping enterprise it is today. In 1975, amidst a period of long economic uncertainty, it was created by Harvard University dropout Bill Gates, the computer industry scenario was totally different. However, Microsoft set the ball rolling by licensing MS Dos to IBM.
Industry: Cable News
Founded: Panic of 1980
CNN might be a news giant now, but in recession-plagued 1980, it was a little-known station called The Cable Network News founded by Ted Turner. With its launch on 1st June, 1980, it has expanded to 42 bureaus around the world with more than 900 affiliates. CNN raised to fame after the coverage of the Gulf War.
Industry: Music Channel
Founded: Panic of 1981
MTV brought something new and different to the music scene when it debuted in the economic slump of 1981. MTV was established by Warner Amex Satellite Entertainment Company (WASEC) after extensive marketing research. The channel confirms the concept of cable niche programming and has become a symbol of youth culture. MTV has been around controversies for a long time but it has changed the way music is marketed.
Industry: Sports magazine
The first issue of Sports Illustrated magazine was launched on August 16, 1954, at the tail-end of a recession. For the first 12 years it didn’t made profit. Though the start for Sports Illustrated was not very smooth, it held its ground and today has more than 3million subscribers. Sports Illustrated is known for many innovations in the sports magazine world including the liberal use of color photographs.
Industry: Information Technology
Founded by Bill Hewlett and Dave Packard, Hewlett-Packard was inauspiciously born in a Palo Alto garage at the end of the Great Depression. Initial years were not very fruitful, but HP grew as a major brand in providing computer systems, peripherals, software, IT consulting & services. Their first product was an audio oscillator and one of their first customers was Walt Disney. Disney used the oscillator to test audio equipment in the 12 specially equipped theaters showing Fantasia in 1940
Online Businesses Successful Through Recessions
The bursting of the internet bubble damaged companies throughout the online industry as we entered the new millenium. However, many companies that were very young at the time powered through to continue success many years later. These include Google, Travelocity, PayPal, eBay, Amazon and Priceline. Even Skype which was founded in 2003 during the aftermath of the dot-com boom at a very difficult time for online start-ups, managed to grow rapidly.
Early in the economic plummet that started after stocks topped in 2007, many existing and relatively new players in the online industry continued to be successful. The online sector suffered a lot less than other industries partly because any malinvestment had been significantly reduced in the dot-com bubble aftermath. Investors in online companies have been more sensible as a result of the earlier troubles for internet companies.
While many online companies will no doubt struggle with a strife economy, there will still be plenty of opportunity in this still young and evolving industry. The shake-up provided by economic uncertainty will no doubt open new doors for the savvy entrepreneur.