Companies that started operations during a recession
So much has happened in the global economy in a few years. The year 2020 will be forever remembered due to the COVID-19 pandemic which put the global economy on hold. Many economies, especially developing ones, are faltering. The current war between Russia and Ukraine is also disrupting the global supply chain and hampering economic growth. IMF says feud sparked global inflation.
In addition, three major economic powers in the world – the United States, China and the main European economies are experiencing a glitch. The world is experiencing a global recession. By IMF and World Bank standards, this means that the average global citizen experienced a decline in real income in one year.
While periods of recession represent difficult times for a country and its citizens, they also create an avenue for increased innovation and technological advancements. Necessity is the mother of invention, and desperate times call for desperate measures. Many people are led to think of innovative ways to keep their heads above water. In fact, history has shown recessions to be a kind of launching pad for some of the greatest companies we have today. Here are a few companies that started operations during a time of global recession.
In 1973, an oil crisis with a stock market crash led to a 16-month recession that dealt US GDP its worst hit in nearly 20 years. The Organization of the Petroleum Exporting Countries had placed an embargo on countries that supported the Israeli army, including the United States. Consequently, oil prices skyrocketed and the stock market crashed. GDP fell by 3.4%and unemployment rose to 9 percent.
However, that didn’t stop Bill Gates and Paul Allen from conceiving the idea of an innovation that impacted the world – Microsoft. Microsoft was launched on April 4, 1975, and its creation offered a disruptive way to remove some of the highest limits for businesses to leverage technology at that time.
Microsoft has now grown into a multinational technology company that produces computer software, consumer electronics, personal computers, and related services.
Between 2007 and 2009, there was a sharp decline in economic activity in the United States, and the world called the Great Recession. The economic downturn began when the US housing market and large amounts of mortgage-backed securities (MBS) and derivatives lost significant value.
The Great Recession saw the creation of a business like Airbnb in 2007. Roommates Brian Chesky and Joe Gebbia decided to rent an air mattress in their living room in San Francisco. They created a website and purchased air mattresses, and decided to build a full-scale business around the concept. In 2009, they received funding from leading venture capital firms and grew exponentially.
The Airbnb online marketplace, originally called Airbedandbreakfast, defied investor expectations and revolutionized the travel accommodation industry by allowing people to convert their unused rooms into temporary guesthouses. What started in a bedroom in San Francisco has expanded globally.
Uber, the worldwide ridesharing company, is also a product of the Great Recession period of 2007-2009. Meanwhile, US GDP fell 4.3 percent, and unemployment reached 10%. Uber, founded by Travis Kalanick and Garrett Camp because they couldn’t find carpooling in Paris, France, launched in 2009 – the last year of the recession.
The ridesharing company now offers services including; carpooling, transport service, food delivery and micro-mobility system (bicycles and electric scooters). It has revolutionized the global taxi industry, and by 2021 it was operational in approximately 72 countries and 10,500 cities.
As of the fourth quarter of 2021, Uber had 118 million monthly active users worldwide and generated an average of 19 million rides per day. In the United States, in January 2022, Uber had a 71 percent market share for carpooling and a 27% market share for food delivery.
Hewlett Packard (HP)
Although not as huge as the Great Depression, the recession of 1937-1938 is one of the most significant recessions of the 20th century. This happened during the recovery years after the Great Depression, when the world was on the brink of World War II.
Meanwhile, two Stanford graduates, William Hewlett and David Packard created Hewlett-Packard, popularly called HP. The company, founded in a one-car garage, initially produced a range of electronic test and measurement equipment. Their first product was an audio oscillator purchased by one of their first customers, Walt Disney. The company officially opened on January 1, 1939 and would go on to build one of the world’s computing powerhouses. The company is labeled as the symbolic founder of Silicon Valley, a region that serves as a global center for high technology and innovation.
In 1929, the Great Depression, a severe global economic depression began after a fall in stock prices in the United States. The economic shock reverberated globally, affecting countries to varying degrees. The Great Depression was the most widespread depression of the 20th century and is used as an example of an intense global economic depression.
At the height of the Great Depression, brothers Walt and Roy Disney renamed their garage-based cartoon studio as Walt Disney Productions. The duo introduced the world to Mickey Mouse via their animated short Steamboat Willie at this time when Americans needed a smile more than ever. Disney survived the challenges of the times and became a name in home entertainment around the world.
From its humble beginnings as a cartoon studio in the 1920s to its preeminent name in the entertainment industry today, Disney proudly continues its legacy of creating world-class stories and experiences for every family in the world.