Sunday, January 25, 2009

14 Businesses That Started in a Recession; and Why A Recession Is Good Time To Start Business

Including FedEx, Microsoft, CNN, Wikipedia, HP, etc. Pre-existing companies can also make incredible gains in years where the economy is down, like Google, PayPal and Salesforce.com Inc.
From 2000 to 2001 each of these companies thrived, leading PayPal to go public in 2002, followed by Google and Salesforce.com in 2004.

Five reasons why a recession is actually a great time to nurture and incubate a small company.

8 Comments:

At 1/25/2009 10:17 AM, Blogger Bruce Hall said...

This is another one of those "not obvious, but true" bits of wisdom. My two youngest sons have a website development firm that also provides business startups with marketing and funding contacts. They have several ventures in the works and at least half of them show significant promise. They are willing to take an equity position in some of them if the market niche seems unique and the business owner is underfunded. The owner, in return, will get a first-class website [often e-commerce], a business plan, contacts to capital investors, and in-person consulting and participation in the development/funding meetings.

It's an unusual approach, but seems to be a win-win for them and their customers.

 
At 1/25/2009 1:53 PM, Anonymous poor boomer said...

Um, did you read the part about capital constraints? How you gonna start a business without capital, Mr Capitalist?


"A recession is generally a difficult time for companies that are trying to raise venture capital because VCs are less likely to fund companies when the economy is suffering. For this reason, a recession is not an ideal time to start a company that requires a lot of start-up capital to get off the ground."

 
At 1/25/2009 2:02 PM, Blogger misterjosh said...

poor boomer:
ergo, it's a good time to start a business that does NOT require a lot of start-up capital. Presumably such ventures exist.

 
At 1/25/2009 2:08 PM, Blogger @sethstorm said...

That doesn't help those who are looking for work.

 
At 1/25/2009 5:58 PM, Blogger PeakTrader said...

I agree with poor boomer, it remains difficult for most people to get credit, particularly at a good interest rate. Also, it seems, wealthy people lost a larger proportion of their wealth compared to other recessions. Throughout the 2000s, there was a shift of real wealth from savers, including foreigners, to borrowers, including lower income Americans. However, the U.S. economy is most diversified.

When Bush became president in 2001, almost everyone, including myself, underestimated his abilities. People now forget. However, Bush's political abilities crushed the Democratic leadership in both the House and Senate.

Also, Bush proved adept at turning the worst stock market crash in history, i.e. the tech bubble, into a mild recession, and then began a period of prosperity unmatched by history.

In the 2000s, U.S. living standards rose at a steeper rate, U.S. firms became substantially more efficient, and the U.S. government was able to borrow almost for free. What's amazing is these huge improvements took place after a spectacular structural bull market, from 1982-00. So, Bush's economic achievements took place during a severe structural bear market.

Bush made some mistakes in 2008. However, he was working in uncharted waters. It was amazing he avoided major mistakes until he allowed Lehman to fail in September 2008, which began to freeze the credit market, and turned a potential soft-landing into a severe recession.

 
At 1/26/2009 4:54 AM, Blogger OBloodyHell said...

> That doesn't help those who are looking for work.

Oh, yes, seth, by all means, tell us more of your genius intellectual prowess in making such statements.

By the way, have you investigated how many jobs are created each year by companies with 1-10 employees?

We are in the presence of sheer genius. Truly.

/sarcasm off

 
At 1/26/2009 4:08 PM, Blogger 1 said...

"Um, did you read the part about capital constraints? How you gonna start a business without capital, Mr Capitalist?"...

Become a male prostitute?

 
At 1/27/2009 2:30 AM, Blogger @sethstorm said...


By the way, have you investigated how many jobs are created each year by companies with 1-10 employees?

Worked for one of those, had a bitter aftertaste after it folded.

That's not counting some of their requirements being out of line compared to what is actually around.

 

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