Launching a Company During an Economic Crisis
During the times of uncertainties, it’s easy to believe that all plans must be paused.
Although it’s true that the former businesses will need to reassess how they operate and likely deal with drawbacks, the same can’t be said about the aspiring entrepreneurs and startups.
The story of Alex von Tobel, who launched LearnVest which is a company that strives to help financial planning for individuals, is one of the prime examples.
In 2008 when the economy was at it’s low, she knew that this was one of the scariest times to start a business. But she insisted that “this is the right time” and “in life, you need to bet on yourself again and again” while carrying on her plan.
Seven years later, this decision led her to great success when “the Northwestern Mutual acquired LearnVest for $375 million.” She is convinced that “zigging while others zag is the way to go” and these moments of crisis “are a wonderful time to build a business.”
Launching a company during an economic crisis can be advantageous in many ways.
People want innovation (Forbes)
During the time of economic crisis, people are looking for ways to solutions. Startups can use this opportunity with their innovative ideas.
People want to save money (Forbes)
Startups have few expenses which may allow them to “undercut their competitors.” Clients are “watching their wallets and looking for cheaper alternatives,” so it’s the “perfect time to make a sales pitch and win them over.”
Fewer Competitors (Forbes)
In the times of a strong economy, “every man and his dog wants to startup.” But during these times, “there are fewer people trying to startup in a downturn because there’s less funding.” The “keen bootstrappers who want to control ownership” of the company will have it easier with the fewer competition.
In fact, you’d be surprised to learn that these businesses launched during a recession:
Trader Joe’s (1958)
Sports Illustrated (1954)
General Electric (1876)
These businesses not only survived “against all odds in the toughest of times but are absolutely thriving” even to this day. (Looka)
It’s important to consider that the minority businesses that utilize this time to be thriving instead of pausing, will have a significant advantage to the majority in the industry.
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