How to Tell If Your Startup Idea Is Recession-Proof
If past recessions are a guide, there is a culling of startups that happens when the capital markets seize and economic instability becomes the norm. Many high-flying companies have collapsed as a result of a “flight to quality” in downturns including 2001, 2008 and now — 2020.
At the same time, many startups that come to dominate the world are born from the embers of crisis. Google, AirBnB, Spotify, Credit Karma, Evernote — just to name a few. The basic premise is that the sudden reordering of the economy catches incumbents off guard and exposes weaknesses in existing supply chains and distribution models that can be exploited by startups. Basically, the economy finally catches up to the vision of prescient entrepreneurs, suddenly making their businesses very relevant.
In the current cycle, the same thing is holding true. Obviously, the social distancing “new normal” is enervating companies and categories that otherwise were growing more slowly or not at all. Home meal kits, on-demand food delivery, video conferencing and streaming services are among those that are up up up since COVID burst on the scene. Who knows what other great entrepreneurs and ideas are lying in wait, ready to capitalize on the reshaped world?
Now let’s say you’re an aspiring entrepreneur, and you feel like this is your moment to…
