Recession a great time to Start-Up!
The coronavirus epidemic leads to large job losses and has an effect on the GDP of almost every country. But history has proved whenever there is a recession it emerged with some great innovations.
The entire world is in lockdown states due to the covid19 epidemic and the world is entering a global recession. GDP of most of the countries is affected and many countries are expected to have negative GDP in the JAN-APR quarter.
Several companies are either having layoffs or paying below 50% to 70% of salaries to their employees. Recently UBER laid off nearly 3,700 employees or about 14 percent of its workforce via multiple Zoom calls and each call lasted less than three minutes. OYO and AirBnB also fired thousands of their employees.
Motivation:
A shaky economy is the scariest condition for any entrepreneurs but history demonstrates time and again that many highly successful companies have proved recession is one of the best opportunities to start with.
A study released in 2009 revealed that about 50 percent of fortune 500 companies were started during a recession.
During or after the great recession of 2008 many startups were founded and now they are tech giants.
Some of these companies are:
- Airbnb — founded in 2008, in mid of recession
- Uber — founded in March 2009
- WhatsApp — founded in 2009
- Instagram — founded in 2010
- Zendesk — founded in 2008
and many more.
Downside and Upside of Recession?
For entrepreneurs, there is a downside of a recession that is the presence of less money in the market and make it difficult to expand.
When the economies lose down the rate of unemployment increases but there is a hidden benefit in rising unemployment. A large number of highly skilled working at large companies are now laid off. The most famous example of this is Steve Jobs who was fired from Apple and later founded NEXT. Due to high unemployment now founders of a startup have the larger potential of candidates to choose from.
A slow economy is an opportunity to look on the horizon and spot coming trends. In mid-1970, US was suffering from the recession and Bill Gates founded Microsoft and started selling personal operating system software to the newly born computer industry and the rest is history.
There has been a large number of recessions in the world for the last 100 years. Often after a recession, a new trend is born or some newly started market increases rapidly. Every recession is emerging more prosperous and with innovative ideas.
What are some of the new trends that are born?
- Artificial Intelligence: During the coronavirus epidemic, many hospitals have been installed with robots to prevent human contact. Many companies are working with less number of staffs and they might think of automating their work. There is a large possibility that there can be a spike in data science jobs during or after coronavirus as more and more companies would like to automate their systems.
- E-commerce and online deliveries: Coronavirus will be with us for a few years until a vaccine is developed. People will avoid gathering in public places including malls and choose to order their essentials being at home. There has been a spike in the number of orders placed in e-commerce companies including Amazon, Flipkart, netmeds, swiggy, etc.
- Online Education and Video Streaming: Schools and Colleges are closed since lockdown and students are involved in online education. Some companies offering video calls and group call facilities have seen massive growth in their online users. These companies are google duo, google meet, zoom, etc. Some video streaming platforms like Hotstar, amazon prime video, Netflix and gaming platforms like pubg, fortnite have seen massive growth in their user base.
Warren Buffet said, “Be fearful when others are greedy and be greedy when others are fearful”.
Thank You for reading
Please give 👏🏻 Claps if you like the blog
