- Some major companies got their starts during recessions over the past century.
- Bill Gates founded Microsoft in 1975, the same year as the oil embargo recession.
- Many of today’s best-known companies were founded during the Great Recession in 2009, including Uber and Airbnb.
- Visit Business Insider’s homepage for more stories.
With the coronavirus pandemic dealing serious blows to the US economy, many economists think a recession is a foregone conclusion.
Yet some of today’s biggest, best-known companies, such as Hewlett-Packard, Microsoft, and Trader Joe’s, got their starts during past US recessions.
Here are 14 companies that started during recessions before ultimately becoming household names.
General Motors was founded in 1908 during an economic recession.
A financial panic in 1907 led to a national recession that didn’t ease until 1910, according to Smithsonian Magazine. The panic was caused by the 1906 San Francisco earthquake and a failed speculation that caused the bankruptcy of two brokerage firms.
General Motors was founded by William Durant and Charles Stewart Mott in September 1908. The two already owned the car brand Buick. General Motors bought other car brands like the Oldsmobile and Cadillac, and it added the Chevrolet brand to its lineup in 1918.
Today, General Motors is valued at almost $US32 billion with 164,000 full-time employees.
Hewlett-Packard got its start during the recession of 1937 to 1938.
The recession in the late 1930s occurred during the recovery of the Great Depression, while the world was on the precipice of World War II, according to Federal Reserve History. Gross domestic product (GDP) dropped 10% and unemployment was at around 20%, making it the third worst economic downturn in the 20th century.
According to the Silicon Valley Historical Association, it was during the recession that William Hewlett and David Packard formed the genesis of Hewlett-Packard. The company officially opened on January 1, 1939, and in the internet age, it is mainly known for its computer products.
The first Burger King restaurant opened amid the post-Korean War recession in the 1950s.
According to CNBC, the recession between 1953 and 1954 was caused by a shift in government spending. The United States’ GDP dropped by 2.2% and unemployment grew to 6%.
As previously reported by Business Insider, the first Burger King restaurant opened in 1953 in Jacksonville, Florida. Founded by Keith Kramer and Matthew Burns, it was initially called Insta-Burger King. In 1954, the company was taken over by David Edgerton and James McLamore and expanded to new locations.
According to the company’s website, 11 million people visit their restaurants each year.
During the 1957 to 1958 recession, the first Hyatt hotel opened …
The recession lasted eight months, according to CNBC. GDP fell by 3.7% and unemployment reached 7.4%.
According to Hyatt’s website, in 1957, entrepreneur Jay Pritzker bought the Hyatt House, a motel near the Los Angeles International Airport. With his brother, Pritzker grew the business into a national management and hotel ownership company. They owned a separate sister company, Hyatt International, in 1968. Both companies, along with the other hospitality assets the Pritzker family owned, were consolidated into one called the Hyatt Hotels Corporation in 2004.
Today, Hyatt Hotels Corporation is valued at $US5.6 billion. As of 2019, it had 913 hotels.
… as did the first Trader Joe’s store.
According to the company’s website, Joe Coulombe opened his first convenience store in 1958 under the name Pronto Market in California. After a decade, Coulombe expanded the concept and introduced the first Trader Joe’s grocery store in 1967, which had a nautical theme and workers who wore bright, tropical-patterned shirts.
Microsoft was founded during the oil embargo recession of 1973 to 1975.
According to CNBC, the Organisation of the Petroleum Exporting Countries put an embargo on countries that supported Israel’s military, including the US. Oil prices skyrocketed, and the stock market crashed in 1973. The GDP declined by 3.4% and unemployment rose to 9%.
In April 1975, Bill Gates and Paul Allen launched their computer software company, Microsoft. By 1987, 31-year-old Gates became the world’s youngest billionaire, according to History Channel.
CNN went live for the first time during the early 1980s recession.
According to CNBC, the Federal Reserve raised interest rates in an attempt to stop rising inflation rates, which reached 22% in 1980. This caused the economy to slow, and the GDP to drop over 2%. Unemployment rates reached 7.8%.
On June 1, 1980, Ted Turner introduced audiences to the idea of a 24-hour news channel with The Cable News Network or CNN.
According to Deadline, CNN’s prime time lineup averaged around 1 million viewers in 2019.
The video game company Electronic Arts emerged from the energy crisis recession in 1981 to 1982.
The US was recovering from the 1980 recession when the Federal Reserve imposed stricter money limitations in an effort to reduce increasing inflation rates, according to CNBC. The GDP dropped 3% and unemployment increased to 10.8%. The recession was worsened by a global energy crisis caused when a new Iranian regime decreased its oil output.
According to Britannica, Trip Hawkins left his job at Apple to launch the video game software company Electronic Arts in 1982. The company would become one of the leading figures in the computer and home console gaming industry, releasing popular series like “Madden NFL” and “The Sims.”
EA is currently valued at around $US33 billion and has 9,700 full-time employees.
The marketing platform Mailchimp formed during the dot-com recession in 2001.
- Kimberly White/Getty Images
According to CNBC, an over-inflated Nasdaq, the 9/11 terrorist attacks, and corporate scandals like Enron caused a stock market crash. The GDP dropped by 0.6% and unemployment reached 5.5%. Nasdaq lost 75% of its value and didn’t return to its peak until 2015.
According to the company’s website, Mailchimp was founded in 2001 by Ben Chestnut and Dan Kurzius. The service was designed for small business clients as an alternative to expensive email software sold in the early 2000s.
According to Forbes, Mailchimp was valued at $US4.2 billion in 2018.
The Great Recession in 2007 to 2009 saw the creation of several startups like Uber …
According to CNBC, the GDP fell 4.3% and unemployment reached 10%. The recession lasted for 18 months. The housing market crashed, and a banking crisis occurred that caused financial institutions like Fannie Mae and Freddie Mac to collapse. As previously reported by Business Insider, the effects of the recession are still felt today.
According to the company’s website, the ride-sharing company Uber launched in March 2009. The company was founded by Travis Kalanick and Garrett Camp, who developed the idea for the app when they couldn’t find a ride in Paris, France.
In June 2018, the company reported their app had been used for 10 billion trips.
… and the popular vacation rental marketplace Airbnb.
- Toshifumi Kitamura/AFP via Getty Images
As previously reported by Business Insider, the genesis of Airbnb formed in 2007 when roommates Joe Gebbia and Brian Chesky decided to rent out their loft. They created a website and bought air mattresses. Including their former roommate Nathan Blecharczyk, they decided to form a business around the concept.
Initially, they struggled and scraped by, but in 2019, the company was worth $US31 billion.
The mobile payment company Square also came out of the Great Recession …
- Fairfax Media/Getty Media
As previously reported by Business Insider, Square was founded in 2009 by CEO Jack Dorsey (who also co-founded and is the CEO of Twitter) and Jim McKelvey. The company started with a plastic card reader that could be inserted into the port of a phone and allowed merchants to accept credit card payments. The company has expanded into other ventures including the Cash App to transfer money.
The company is currently valued at $US26 billion and has 3,835 full-time employees.
… as was Groupon.
According to the company’s website, Groupon was created in 2008 out of The Point, a tipping-point-based collective action website. The Point was started a year prior by Andrew Mason as a way to bring people together to accomplish a goal. Groupon advertised local businesses, offering limited time deals. Since then, they have expanded to cities across the country.
Today, Groupon is valued at $US547 million and has 6,345 full-time employees.
Venmo also got its start in 2009 towards the end of the Great Recession.
According to CNBC, the genesis of Venmo formed at a funk concert in 2009. Founders Andrew Kortina and Iqram Magdon-Ismail discussed how easy it would be to send money via your phone. In 2012, Venmo was bought by online payments company Braintree for roughly $US26 million, which in turn was purchased by PayPal for $US800 million.
- Read more:
- This chart shows every recession the US has gone through since 1960, and how they compare to the economic meltdowns of other countries
- IMF says ‘Great Lockdown’ global recession will be worst economic meltdown since Great Depression
- The 25 best companies to work for, based on employee satisfaction
- 13 famous companies that started out as side hustles
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