It might seem counterintuitive to start a new business when the economy is in the dumps. With consumer confidence plummeting, the unemployment rate rising, and the GDP falling at a rate reminiscent of the 1982 recession, there seems to be little hope of any good economic news on the horizon. But many historians and economists point out that such seemingly unfertile ground has often proven to be the right time to grow the seeds of entrepreneurship.
During a recession, smart CEOs and innovative entrepreneurs dig deep to find new market needs and fill these holes with creative opportunities. Some of our most storied brands today were born in recessions: tough times can make for great startups!
FedEx
Founded during the oil crisis of 1973, Federal Express founder Frederick W. Smith identified a pressing business need at the time: important documents had to reach their destinations within one or two days. On its first night in April, FedEx shipped 186 packages to 25 U.S. cities. While the oil embargo could have crushed the new company, Federal Express stayed alive and became profitable in July 1975, when oil prices finally leveled off.
Burger King
These flame broiled burgers are also another recession startup. The company began in 1954 when James McLamore and David Edgerton opened a Burger King in Miami. During another recession in 1957, the company introduced its signature sandwich, The Whopper. Today, Burger King operates more than 11,000 locations across the globe.
General Electric
Kicking off the Great Depression was the Panic of 1873, which began when investment firm Jay Cooke & Co. collapsed, causing the NYSE to shut down for days. The ensuing financial crisis lasted six years, but this didn’t stop inventor Thomas Edison from setting up his laboratory in Menlo Park, NJ where he produced the first light bulb in 1879. Although the economy remained poor until around 1896, Edison still forged ahead to form the Edison General Electric Company. In 1896, Edison’s GE landed a spot on the first-ever Dow Jones Industrial Average. Today, it is the only remaining company of the original twelve.
CNN
It might be a cable news giant now, but in recession-plagued 1980, it was a little known station called The Cable News Network, the brainchild of Ted Turner. Today, CNN is known for revolutionizing how people received the news. CNN premiered as the first 24-hour all-news channel.
Proctor & Gamble
Candle maker William Procter and soap maker James Gamble joined forces to start a small household-goods business in Cincinnati. Founded during the Panic of 1837, the brothers-in-law had at least six years of financial turmoil, bank failures and inflation ahead of them under the greatest economic decline since the birth of the country. P&G survived, scored lucrative contracts to supply necessities to the Union Army during the Civil War and with $83.5 billion in revenue in 2008, it has built a portfolio of some of the most recognizable brands in the U.S., including Tide, Pampers, Oral-B, Iams, Pantene, Duracell and Pringles.
This entry was posted on Monday, March 16th, 2009 at 12:45 PM and is filed under Entrepreneurship. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
