Winning Big in a Recession

Economies are in record declines not seen in decades. Massive layoffs have begun, with much more likely to come. Several businesses have already gone under. Spending has become cautious. Capital is drying up. No country or industry is spared.

While many companies are out there worrying and fretting over the economy and the extremely volatile yet unpredictable market swings, you don’t necessarily have to be swept off by the panic. Like we always say at Thinking School, nothing is absolutely new. The pandemic may be new, but the fallout and opportunities are not exactly new. We can learn lessons from the past economic recessions, financial meltdowns and the great depression. 

We have taken a look at 15 companies that started or thrived while other companies were losing their heads in a recession. These lessons have been distilled into principles that any company or small business can apply to survive, and even thrive in this most difficult time. Companies like Disney, Microsoft, Apple, AirBnB, Mailchimp, Netflix, Burger King, Hyatt, Trader Joe’s, Electronic Arts, Whatsapp, Credit Karma, Uber, recently, Zoom, and Amazon all started or boomed during tough economic times. So, what can we learn from these giants?

1.  Cheap is good: 

In a recession, people become less choosy or elitist in their taste. They become more open to cheaper alternatives that offer the same or similar solutions. As consumers begin to look for the bargain, you can become their answer by providing good stuff at reduced price. AirBnB, Hyatt, Burger King

2.  Entertainment:  

This sounds counter-intuitive, but when people are losing their jobs and the economy is crashing, they tend to look for entertainment. They want to smile, and for a while, forget their sorrows. Disney, Netflix, Alectronic Arts

3.  Connection:

We all want to feel a sense of belonging. This is probably the most basic instinct of man (right after survival). This feeling is heightened in times of distress. Ever heard of the saying “misery loves company?” Zoom, Whatsapp, 

4.  Transfer cost: 

As the purse grows leaner, customers begin to look for bargains. Sometimes the bargain is not in the form of reduced price, it may be in reduced associated costs. If they can remove the cost of commuting to the store, the cost of support service, maintenance cost, etc, they will jump on it. These are things that would ordinarily not look like much previously, but with a recession, every kobo matters. Amazon, Uber

This series continues next week; watch this space.