Entrepreneur
Key Takeaways
- Startups can succeed in economic downturns by solving urgent problems, as past successes like Airbnb and Uber demonstrate.
- Internal issues, rather than economic conditions, are often the true challenges facing startups in tough economies.
- Launching during a recession can provide unique advantages, such as less market clutter and cheaper advertising, potentially leading to a longer product lifespan.
“I’ll launch when the timing is better.”
“It’s just not the right economy for something new.”
“What if no one’s spending money right now?”
If you’ve ever thought this — or heard it from others — you’re not alone. In times of economic uncertainty, hesitation feels logical. It’s wise to be cautious, and besides, you want to give your startup the best possible chance of success. Waiting just makes sense.
Except that all of that is — excuse my language — total hooey.
If you’re building something people truly need, the timing doesn’t have to be perfect. Great startups don’t take off because the economy is booming — they take off because they solve real problems. And yes, that can happen even in a downturn. Here’s why.
Related: Market Volatility Isn’t Your Enemy — It’s Your Greatest Opportunity. Here Are 6 Proven Ways to Profit From the Chaos.
When being small is a plus
I get it — launching in a time of economic turmoil seems like an obviously bad idea. But here’s the thing: When founders say they’re holding off because “no one’s spending right now,” they’re thinking like established companies, not startups.
The reality is that in the earliest stages, you’re not trying to win over the whole market. You’re just trying to find a few people — your first 10, 50, maybe 100 users — who have a specific, urgent problem and are actively looking for a solution.
In that context, macroeconomic trends don’t matter nearly as much as you might think. Recessions don’t eliminate pain points. In fact, they often magnify them. If your product solves something real, there will always be someone willing to pay for it. Plenty of now-household names started during downturns: Airbnb during the 2008 crash, Uber in 2009 and WhatsApp the same year. These companies didn’t succeed despite the recession — they succeeded because they solved pressing problems, and the downturn made people more open to new, cost-effective solutions.
Unless you’re selling something extremely niche to an industry in freefall, the ups and downs of the economy won’t make or break your startup. Your footprint is too small for the broader market to meaningfully affect you — and that’s a good thing.
Most startup struggles are internal, not external
I’m going to lay out an uncomfortable truth: If your startup fails in a downturn, odds are the economy wasn’t the real problem. More often, the root cause is internal — a lack of product–market fit, poor execution, burning resources on the wrong priorities or giving up too early.
The data backs this up, with research showing that products launched during recessions outperform on several measures. A 2023 study found that consumer products launched during a recession survive 14% longer on average than comparable products launched during more prosperous times. This is for a few reasons: the marketplace is less cluttered, making it easier to get noticed. Advertising is often cheaper. Also, releasing a product in a recession creates the impression of corporate health, boosting customer confidence.
“I thought discretionary-product launches would be more likely to fail, because nonessential purchases tend to decline in tough economies,” M. Berk Talay, the lead author of the study, told Harvard Business Review. “But the effects are consistent across products and categories. A recession might be the ideal time to launch your product no matter what it is.”
The bottom line? Perfect conditions don’t exist. The real risk isn’t launching in a bad economy; it’s letting fear stall your momentum while someone else solves the problem you sought to tackle.
Related: Why Adaptive Leadership Is the Key to Success During Market Volatility and Times of Uncertainty
How to launch in any economy
Once you accept that the economy isn’t an adequate reason to wait, the next step is figuring out how to move forward anyway. The good news that while the economic backdrop may be different, the fundamentals of launching a startup are the same.
The first step is to get clear on who your product appeals to, and really understand their needs. In a downturn, that often means focusing on customers who have an urgent problem — one that’s painful enough that they’re actively seeking a solution. Zoom is a great example: while it wasn’t launched during the pandemic, its laser focus on making virtual meetings seamless met an urgent, non-negotiable need when in-person work shut down. If your product can save people time, cut costs or remove a major headache, it has a fighting chance no matter the market conditions.
From there, resist the urge to go big out of the gate. Start small with a minimum viable product (MVP) that delivers immediate value, and test it with a small group of early adopters. Their feedback will not only shape the product, it will also help refine how and where you market it to reach similar customers. Lean times demand discipline, so be ruthless about where you spend your time and money. Focus on the activities that reliably bring in users and skip the ones that “might” pay off months from now.
As a bootstrapped founder, this is advice I would (and have) given to anyone starting out in any market: understand the value you’re bringing, build lean and listen to your customers. The economy will rise and fall regardless of what you do, but the habits you develop in a downturn — discipline, focus and adaptability — will serve you long after conditions improve. If you can prove your idea works when times are tough, you’ll be ready to scale when the tide inevitably turns.
Key Takeaways
- Startups can succeed in economic downturns by solving urgent problems, as past successes like Airbnb and Uber demonstrate.
- Internal issues, rather than economic conditions, are often the true challenges facing startups in tough economies.
- Launching during a recession can provide unique advantages, such as less market clutter and cheaper advertising, potentially leading to a longer product lifespan.
“I’ll launch when the timing is better.”
“It’s just not the right economy for something new.”
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