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April 27, 2020 | 3-minute read (602 words)
When the economy isn’t thriving, you might think twice about starting a business, but sometimes it can work out in a positive way. General Electric, IBM and FedEx are three of the most well-known businesses that were born out of recessions, and they have weathered multiple storms over the years.
If you’re an entrepreneur looking for inspiration during this period, consider the following five companies that launched during down economic periods.
In 2008, Kabbage officially launched, utilizing online data to create an automated lending platform to fill the small business funding gap. Since 2009, Kabbage has provided more than $8 billion to support small businesses. The company automates funding decisions based on a number of data factors, including business volume, time in business, transaction volume, social media activity and credit scores.
“I think it was a real advantage to us to start during an economic downturn,” said Kathryn Petralia, a co-founder of Kabbage, about the timing of the company’s debut. “It gave us the ability to handle adversity and deal with change and I think it allowed us to really focus on being nimble and flexible.”
Since March 2020, Kabbage began facilitating loans to US businesses through the PPP (Paycheck Protection Program), the US government’s COVID-19 initiative to help businesses survive the economic fallout. In addition, Kabbage created a service allowing small businesses to sell gift certificates so they can bring in money during the pandemic.
Walt Disney and his brother Roy launched their famous film Steamboat Willie in 1929. The debut of Mickey Mouse on the big screen came at the same time the Great Depression started, but that didn’t stop the company from flourishing. With nearly a century in business under its belt, the company has weathered multiple economic downturns and is currently valued at over $100 billion.
Founded in 2008, Delphix creates database software that helps companies leverage their data as a strategic asset. Delphix currently powers around 14,000 terabytes of data for companies, providing access to secure, personal data environments to fuel application development, analytics and AI while also minimizing data risk. The company currently has over 300 global customers, 350 employees and 10 offices across the globe.
“Scarcity of capital is like drought season in the Serengeti,” said Jed Yueh, CEO of Delphix, about launching during a recession. “As conditions improved, companies that survived benefited from having fewer competitors.”
Zeta formally launched in 2008 to offer data-powered marketing technology to help brands acquire, engage and retain customers. The 1,500+ person company has 26 offices on four continents, powering business growth for Fortune 1000 companies such as Samsung, Toyota and Sprint. According to The Wall Street Journal, as of March 2020, the company’s revenue totaled more than $400 million and the firm was profitable.
Founder David Steinberg stressed during a recent podcast that he has learned from previous entrepreneurial ventures to spend money carefully. “As an entrepreneur, you learn. There are always going to be highs. There are always going to be lows.”
Although we can’t yet say the long-term effects of launching during the coronavirus pandemic, one company is already being watched as a bellwether. The streaming platform Quibi officially launched on April 6, 2020, in the middle of the COVID-19 pandemic.
The company presents bite-sized stories for smartphones, from news to entertainment, all under 10 minutes in length. The company appears to be off to a good start, and CEO Meg Whitman said there were 1.7 million Quibi downloads in its first week after launch.
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