13 Massive Companies That Started During a Recession
The fear is real.
Markets are in record declines not seen in over 30 years. Massive layoffs have begun, with much more likely to come. Several businesses have already gone under. Capital is drying up.
Let there be no doubt: we’re heading into a long-awaited recession that will shake the world to its core. And for many would-be entrepreneurs out there, this market instability is the perfect excuse to shelve their dreams while they wait for things to blow over.
But is this the right move?
It’s no secret that starting a business is incredibly difficult. And yes, challenging times can create even more obstacles between you and success.
But isn’t that what entrepreneurship is all about? Leaning into the obstacles? Finding and creating opportunities in places others have overlooked or written-off?
Why should these difficult times ahead be any different? If anything, as others run away from the chaos, there will be more opportunity than ever to deliver real value to the world.
How can I be so sure? Well, if history proves to be any sort of reliable predictor, recessions have actually served as the launchpad for some of the world’s most incredible businesses.
Need proof that now is as good a time as ever to launch your business? Here’s a look at 13 massive companies born out of recessions:
Year Launched: 1892
2019 Revenue: $95.2 Billion
Though he officially got his start years earlier (and survived several smaller recessions during the 1880s), Thomas Edison and company launched General Electric right as the nation was heading into the Panic of 1893, a period of 16 months where business activity dropped nearly 40% across the nation. Nevertheless, the company persisted and went on to be one of the original 12 companies listed on the Dow Jones Industrial Average in 1896, where it remained for over a century.
Year Launched: 1908
2019 Revenue: $137.2 Billion
Though his business was still manufacturing horse-drawn carriages in the late 1800s, General Motors Founder William Durant made his transition into the newly-created automobile industry in 1904 with his purchase of the Buick Motor Company. However, it wasn’t until early 1908 — in the middle of the 30% business declines experienced during the 13-month Panic of 1907 — that Durant decided to launch GM as a holding company to acquire even more automobile manufacturers. This strategy would serve GM well, as it would go on to become one of the largest corporations in the history of the world.
Year Launched: 1911
2019 Revenue: $77.1 Billion
Launched as the Computing-Tabulating-Recording Company (CTR) by Charles Flint in June of 1911, IBM got its start selling commercial and business machines right in the middle of a long two-year panic. While industries everywhere saw double-digit declines in activity, CTR was able to not only survive but thrive, eventually changing its name to IBM, and becoming the leader in technology that would support the digital revolution, making billions along the way.
Year Launched: 1929
2019 Revenue: $69.6 Billion
In 1928, brothers Walt and Roy Disney introduced the world to Mickey Mouse via their short-animated feature Steamboat Willie. A year later in 1929, the duo incorporated Walt Disney Productions right as the nearly 4-year Great Depression was getting started. Troubling times be damned, the brothers knew that America needed a smile more than ever, and was able to navigate the challenges of the depression, growing their business to the point where they could begin work on their first full-length animated feature right after The Great Depression ended.
That feature? A little movie called Snow White and the Seven Dwarves.
Year Launched: 1939
2019 Revenue: $58.8 Billion
While considered small compared to The Great Depression, the recession of 1937–1938 would end up being one of the worst recessions of the 20th Century, with GDP decline reaching nearly 19%. Nevertheless, it was during this recession that recent Stanford graduates William Hewlett and David Packard decided to formulate a plan for their new electronics company, Hewlett-Packard. Still feeling the sting of the recession, the duo incorporated their business on January 1, 1939, and would go on to build one of the worldwide powerhouses in computers.
Year Launched: 1957
2019 Revenue: $5.0 Billion
Two months into the Recession of 1958, entrepreneur Jay Pritzker purchased the Hyatt House motel near Los Angeles International Airport. Even with business activity and travel slowing during the tough economic times, Pritzker pushed on, opening two additional hotels before the end of the decade. Eventually, this collection would grow to nearly 900 properties, and annual revenues exceeding $5 billion dollars!
Year Launched: 1958
2019 Revenue (Estimated): $13.3 Billion
Another business born during the Recession of 1958, Trader Joe’s got its start under the name Pronto Markets in Southern California. After founder Joe Coulombe returned to the U.S. from a vacation in the Caribbean, he sensed an opportunity to provide unique international food offerings in his stores to consumers that were becoming increasingly more global. The concept stuck, and Coulombe grew his businesses rapidly until he sold it to German billionaire Theo Albrecht in 1979.
Year Launched: 1971
2019 Revenue: $65.5 Billion
Having developed the concept of fast, efficient, reliable door-to-door cargo delivery as part of a school project while at Yale, FedEx Founder Fred Smith eventually launched the business right on the tail end of the Recession of 1969–1970. Though this recession was relatively short-lived and mild, Smith faced major challenges trying to sell a new, unheard of type of service to a business community that was more hesitant than usual to spend money on untested vendors. Yet he was able to overcome the challenge and would go on to pioneer industry and grow a business that in 2019 delivered over 6 million packages a day.
Year Launched: 1975
2019 Revenue: $125.8 Billion
In 1973, an oil crisis coupled with a stock market crash led to a 16-month recession where the GDP took its worst hit in nearly 20 years. However, this decline did not stop Bill Gates and Paul Allen from developing their new computer software business Microsoft, which launched on April 4, 1975, literally just days after the recession was considered officially over. Within a decade, the company grew substantially and launched an IPO in 1986 that created 3 billionaires and 12,000 millionaires in the process.
Year Launched: 1982
2019 Revenue: $4.5 Billion
Prompted by the 1979 energy crisis, the 1981–1982 Recession brought some of the worst unemployment rates seen in decades. However, this didn’t stop Trip Hawkins from leaving his secure job at Apple to start a new software company called Electronic Arts. The company would quickly grow to become a leading provider of games for the booming home computer and entertainment system market, evolving into a giant with 10,000 employees and over $5 billion in annual revenue.
Honorable Mentions: Salesforce, Google, and Facebook
Though technically not started during recessions, these three giants were all launched right before major economic meltdowns: Google (1998) and Salesforce (1999) right before the dot-com bubble burst, and Facebook (2004) shortly before the Great Recession. Having weathered the storms, these three companies posted a combined $72.77 billion in revenue in 2019 alone.
This list is a short look at what is still possible when you decide to act in less than favorable conditions. While the coming market might not be ideal for everyone, if you have an idea you believe is ready for the world, don’t assume you have to shelve it until things rebound. In fact, this might be the perfect time to act.
Whenever you find yourself on the side of the majority, it is time to pause and reflect. — Mark Twain
Sure, it’s going to be hard. Entrepreneurs need to make better decisions, operate lean and act swiftly — much more so than if they were in the middle of a booming market. But as these iconic brands have shown us, there should be nothing that stops you from chasing your dreams.
Businesses are born every single day in every country on earth. Don’t let anyone or anything scare you out of building yours.
While you’re here, if you want to follow along with my latest journey, a community built to support the exploding non alcoholic wine, non alcoholic beer, and non alcoholic drinks and cocktails market, feel free to visit us at YOURS.