What do General Motors, Burger King, CNN, Uber and Airbnb all have in common?
They were all founded during economic downturns.
GM launched in 1908, when the US economy was in turmoil after “the Panic of 1907” financial crisis. Meanwhile, Burger King flipped its first patty in 1953, when the US was again in recession, and CNN started its news broadcasts in 1980, when US inflation hit almost 15%.
Both Uber and Airbnb set up business during the global financial crisis of 2007-09.
These examples show that many of the best, and longest-lasting, companies are set up during downturns, according to Dane Strangler, a fellow at the Bipartisan Policy Centre, in Washington DC. He says that the difficult economic backdrop makes them both tougher and more nimble for years to come.
“There’s this trial by fire idea,” he says. “If you get started in a recession, you really have to scrape and scrimp to make that company successful.
“You are trying to make it when you can’t get financing, and trying to get customers when there isn’t any demand.”
We are certainly in a downturn again now, as a result of coronavirus and the subsequent lockdowns around the world.
The World Bank predicts that the global economy will shrink by 5.2% in 2020, its worst performance since 1946 and the aftermath of World War Two.