Did you know The Top Companies That Started During a Recession (infographic)
Nobody needs telling that the Covid-19 pandemic has had a big impact on businesses all around the world. With lockdown restrictions and social distancing causing people to change their habits and stores, restaurants, gyms and entertainment venues having to close, re-open and close again, these are tough times.
Governments have had to spend public money to support businesses, but many have closed, especially in the retail world, causing mass unemployment and worldwide recessions. Things seem bleak, but out there are new businesses that are ploughing on regardless and could go on to change the world.
It might defy logic that a recession is a good time to start a business, when people have less money to spend and other businesses are being more cautious, but history has shown that it’s very possible to make it work and some of the biggest brands around today were ‘recession babies’.
BusinessFinancing has researched data from SEC filings, Fortune magazine, and the National Bureau of Economic Research to find the top companies that were launched during recessions and went on to be hugely successful.
The 1930s
When you think about the 1929-1933 Great Depression, you think of a global financial catastrophe with long-term implications, but did you know that American Airlines was founded in the midst of it? In 1931, more than 80 smaller airlines came together to form an iconic brand that today flies to more than 50 countries around the world, having weathered several more recessions. But how will it rebound from the impact on the travel industry of Covid-19?
While not as severe as The Great Depression, the pre-World War II recession saw a decline of 18.2% in America’s GDP. However, several household names started up during this time, including Caesars Entertainment and the Federal National Mortgage Association (aka, Fannie Mae), which was set up after the impact of the Depression on America’s mortgage debt and the foreclosures that saw nearly 25% of people losing their homes.
The 1940s
The post-war recession saw GDP go down by 12.7%, but again these difficult times inspired iconic businesses to get started. U-Haul was founded in Washington by a married couple from their family’s gas station and by 1955 it had more than 10,000 trailers out on the roads.
Meanwhile, Harold Matson and Elliot Handler combined their names to form Mattel, selling picture frames before moving on to the more lucrative toy market two years later with the Uke-A-Doodle.
A few years later another recession saw more household names start out, including Pottery Barn and Dick’s Sporting Goods, which began life as a fishing tackle store in Binghamtown, New York after Richard Stack borrowed $300 from his grandmother’s cookie jar.
The 1950s
In 1953, a 2.6% decline in GDP still saw the likes of Burger King take the jump into the business world in Jacksonville, Florida (originally known as Insta-Burger King). Five years later another recession saw the arrival of Hyatt, Trader Joe’s and even VISA, which was launched by the Bank of America in Fresno, California as the BankAmericard.
The 1960s and 1970s
The 1960s saw minor recessions that were both short-lived and only minor dips, but even these can have a big impact on businesses, but 1960 and 1961 alone saw the arrival of brands like Famous Footwear, Domino’s and Claire’s, while Gap and Sysco were both started in the downturn of 1969. That lasted into 1970, when Freddie Mac (the Federal Home Loan Mortgage Corporation) was started.
Meanwhile, the mid-70s recession saw a 3.2% decline but also the early days of brands as big as HBO, Foot Locker and Microsoft, along with UnitedHealth Group, which is currently the seventh-largest publicly-traded company in the world.
The 1980s and 1990s
Some iconic – and acronym-heavy – brands emerged from the recessions in the early 1980s, including WWE (known at first as WWF of course), AMC, MTV and EA, all of whom have gone on to play a huge role in popular culture right up to the present day.
Adobe also began in 1982 from inauspicious circumstances in founder John Warnock’s garage, but still managed to become the first Silicon Valley firm to be profitable in its first year after Steve Jobs bought into the company.
The 21st Century
Moving closer to the present day, the slight downturn in the early 21st Century saw brands like Just Eat and MailChamp, while Slack, Airbnb, Groupon and Uber all emerged from the Great Recession of 2007-2009, which was clearly no impediment to the next generation of tech pioneers.
All of these – and many more – companies have proved that hard times don’t necessarily mean that businesses can’t get started and thrive. Which companies have been founded during this pandemic do you think we’ll be talking about in ten years as the biggest ‘recession babies’ of our time?
