Disney, WhatsApp and Mailchimp. What do they have in common?
From side hustles to fast-scaling freemium services, many of the world’s biggest brands have fired up in or around a recession. Starting a business is grueling at the best of times, so surely the hardship that comes with recession – layoffs, scant capital, declining markets and general uncertainty – only increases the challenge?
Maybe. But a recession forces entrepreneurs to be lean. You need to launch your vision with fewer resources, and keep building, testing and refining, whilst delivering. It’s the lean business models that are thriving, not surviving, in 2020.
From tiny tech startups to a mouse-shaped family venture – plus the surging markets in 2020 (there are a few) – these brands show that recessions can breed exceptional businesses.
Mailchimp (launched 2009, 2019 est. revenue 700 million USD)
The DNA for this marketing giant lies in The Rocket Science group, founded in 2001 and right in the eye of the dot.com crash. Back then, it dealt with big client retainers and was a far cry from the brilliantly simple email marketing brand we know today.
Fast-forward to 2009, and the world was taking baby steps from the 2007-2008 Global Financial Crisis (GFC). The time for annual retainers and lifelong clients was gone, and as luck would have it, founders Ben Chestnut and Dan Kurzius had been working on the perfect antidote.
They added Mailchimp as a groundbreaking freemium service in 2009, and within a year customer numbers had gone from 85,000 to 450,000.
Disney (launched 1929, 2020 est. revenue 65.388 billion USD)
They’d made a soft launch with Steamboat Willie, but things got serious for brothers Walt and Roy Disney in 1929, when they incorporated Walt Disney Productions right at the start of the Great Depression. What the world needed now was a smile, and they had plenty of ideas.
The Disney brand has weathered many storms since then – internal and external slumps included – but the original core values of fun and magical escapism, so badly needed during the Great Depression, have remained intact.
It’s bookended perfectly with the launch of Disney Plus in 2019, just ahead of COVID-19. Families around the world suddenly needed stay-at-home escapism, and who was there? Mickey Mouse and co (plus a tonne of acquired favourites, from Han Solo to Bart Simpson).
WhatsApp (launched 2009, 2020 est. revenue 4-5 billion USD)
In 2009, Jan Koum was at the tail end of the Global Financial Crisis and unemployed. His back story makes for harsh reading – zero silver spoons – and the grit he’d relied on through his career so far left him well-heeled for a global recession.
On 24 February that year, he incorporated WhatsApp Inc (there was no app as yet), and was working out the product. Nothing like the slick app we all have on our phone now (surely?), WhatsApp proved tricky to get right. It crashed, it mutated and Koum very nearly shelved his idea. But cofounder Brian Acton convinced him to stick at it, and the rest is history.
WhatsApp started as a simple idea, showing users their contacts’ status – can’t talk right now, I’m at the gym – with the famous double blue tick in place right from the beginning. The world was in the mood for streamlining, and WhatsApp was all about it.
Not that my messages right now are looking that streamlined.
Who’s winning, in 2020?
The obvious runaway success stories of 2020 are the Zooms, the Skypes, the Teams. But on a more micro level, figures from website building service Web Eden show independent food and drink delivery services, personal trainers and cleaners as the top three startup sectors across the year.
What is it about these business types that suit the recession we’re in today? For sure, it has something to do with spotting a widespread need, and delivering. We needed the joy of good times over food and drink. We needed release in the form of exercise. And we needed our homes to be places we wanted to be in, when we weren’t really allowed out. Food delivery, PTs and cleaners all knew this, and cornered their markets.
Recession startups have one thing in common; adversity. It’s a curious fact of entrepreneurship that we tend to thrive on it, and build our best work.