At times like this it can be hard to look beyond the horizon. There is no doubt that the Covid-19 pandemic is and will continue to have devastating effects on the economy, on people’s livelihoods and on their health. These things happen, and it’s important to remain positive where possible and look ahead to the future. But before we do, we’ll look back to the past for just a brief moment to acknowledge what did emerge out of the very tough climate of the GFC.
The GFC was sparked by the collapse of a number of financial institutions with flow-on effects reaching all parts of the global economy and plunging many of the world’s markets into recession. Australia was one of the lucky few to avoid a technical recession, but nonetheless we felt the full impact of the crisis on our economy and livelihoods.
Yet, despite the far-reaching impacts of the crisis, entrepreneurs and innovators remembered that when there are so many things we can’t do, we should never forget what creativity can do. Below are some of those success stories that emerged from the 2008/09 GFC.
Uber - Founded in 2009 after founders Travis Kalanick and Garrett Camp weren’t able to find a taxi on a cold night in Paris. This highlights the point that when consumers have a need, and businesses can solve it, an opportunity exists. Uber has since become a mainstay on most phones, it’s even used as a verb these days, and is valued at over $45 billion.
Slack - This work messaging platform was founded in 2009 by co-founder of Flickr, Stewart Butterfield. We ourselves use Slack to communicate at Equitise, and the application is perfectly positioned to grow even more during the current crisis, given the vast majority of companies working at home. It’s now valued at over $15 billion.
WhatsApp - Founded in 2009 by Jan Koum and Brian Acton, this messaging application changed the way people communicated over the phone. It found particular success in countries with limited cellular capabilities, given its ability to operate on Wi-Fi. The application was purchased by Facebook in 2014 for $19 billion.
The potential success of startups founded in times of recession is not just limited to the GFC. Looking further back you’ll find even more companies rising out of the ashes. One example is General Electric (founded in 1892) which persisted through The Panic of 1893 to become one of the original 12 companies listed on the Dow Jones Industrial Average, where it has since remained. Or how about Disney (founded in 1929), a company that went head-first into The Great Depression, now a household name covering everything from superheroes to jedi knights.
We've already seen great examples of companies pivoting in just the last few weeks from our local restaurants who now do takeaway (including cocktails!) to anything from gyms to wine clubs taking their offerings online. Now whilst not all businesses can pivot as quickly or as well (our local massage place is offering conference calls to teach us self-massage), what we have seen has been truly amazing. There's even a HIV self-testing startup who has already pivoted to help testing for covid-19.
Smart Company wrote a great article on how global entrepreneurship will shift into overdrive as those who are wired to solve complex global problems lean right in to deliver solutions that create positive change. The article also outlined that:
''Future-focused investors will back those opportunities, as they always have, and the base of people rallying behind these worthwhile projects will expand to include everyday investors via equity crowdfunding. This will be particularly helpful for B2C companies, allowing them to raise capital and engage their consumers simultaneously.''
Crowd-sourced funding is one way to support these exciting businesses from the ground up, and to potentially share in any success they might encounter. It’s also a great way to diversify your portfolio and protect against crises such as this, you can read more about this here. So keep a look out as to what comes on the platform in the coming months.
The human spirit and drive for innovation and progress is resilient. We’re sure that in a decade or so we’ll all be looking back at the world-changing startups founded during the Covid-19 crisis. Until then, stay safe, look after those around you, and be kind.
Socially distant hugs, Equitise