From the Great Depression to the 2008 financial crisis, history is full of inspiring stories of businesses succeeding during times of extreme difficulty.
As the next economic downturn continues to unfold, we take a close look at the iconic companies that propelled their businesses forward against all the odds, and what we can learn from them.
How Disney survived the Great Depression
In 1932, at the height of the Great Depression, an exhausted man arrived at Walt Disney’s office. The man, an advertising executive from Missouri named Kay Kaymen, had just travelled halfway across America after receiving a potential offer to promote Mickey Mouse.
Kamen had a compelling pitch. After laying out his plans for merchandising Mickey, he then laid out his entire life savings on the table: “if you hire me, all this money is yours. I guarantee you this much plus 50 per cent of everything I do over that amount,” Kamen said. Walt and his brother Roy quickly accepted and within two years, Kamen had brought in $35 million in merchandise sales.
As the depression had taken hold, Disney was struggling to finance a follow-up to Steamboat Willie, Mickey Mouse’s historic debut. But while rivals cut back on marketing, Kamen turned Disney merchandise into a hugely lucrative division, something unheard of at the time.
The revenue from Mickey Mouse watches, caps, playing cards and more ultimately funded features like Snow White and the Seven Dwarfs, making Disney the giant it is today.
Business lesson: While it’s tempting to cut costs as much as possible in difficult times, if it’s feasible, sometimes spending money in the right places can really pay off.
The unlikely story of the UK’s largest bike manufacturer
Fast-forward forty years and 1970s Britain was in the throes of soaring unemployment and enormous inflation – certainly no place to launch a new business. But an uncompromising engineer in London had other ideas.
Andrew Ritchie was working on a new type of folding bike, named after the grand Roman Catholic church he could see out his window – the Brompton Oratory. He took his first prototype to established bicycle manufacturers like Raleigh, but they weren’t convinced the idea was scalable. So Ritchie decided to make the bikes himself in his kitchen at home.
Brompton bikes eventually built a loyal following, which later skyrocketed with more aggressive marketing tactics. “I’m not a model businessman. My strength is my eye for detail and an obsession with getting things right,” Ritchie says. Either way, Ritchie’s dogged determination and commitment to design laid the groundwork for Brompton’s future success.
Business lesson: Don’t compromise. Stubbornness is no bad thing, especially if it’s rooted in a desire to make the best product possible.
How two university dropouts changed the history of computing
While an eccentric Englishman was building bikes in his flat, two programming-obsessed friends were pursuing a unique idea in Boston, Massachusetts. Though times remained tough, with the country wracked by another historic downturn, Bill Gates and Paul Allen had ambitious plans to put computers in every home and office.
After Gates and Allen had dropped out of university to work as programmers they read about the Altair 8800, a new and inexpensive ‘microcomputer’. They immediately called MITS, the company that made it, offering to convert BASIC, a computer programming language used in larger computers, into something that would work for a personal computer.
After they demonstrated their program, MITS agreed to distribute and market the product under the name Altair BASIC. Shortly afterward, Gates and Allen founded Microsoft, combining ‘microcomputer’ with ‘software’.
Gates and Allen had some rare opportunities, growing up around computers long before they were widely available at a school that encouraged their unusual interests. But they took major gambles too, during an incredibly difficult time to do business, which ultimately paid off.
Business lesson: To win big, you have to take big risks – even during times of economic uncertainty.
The Great Recession and the emergence of gig work
New technology somehow always seems to emerge during periods of economic decline. In fact, the financial crisis of 2007–2008 created the conditions for tech to totally transform how we work. While AirBnB was still called ‘AirBed & Breakfast’ and Uber hadn’t even launched, a website called RunMyErrand was kickstarting the gig economy.
Leah Busque, the company’s founder, hit on the idea while she was waiting for a taxi. Busque and her husband were planning to go out for a meal, but had forgotten to feed their dog, so Busque did a quick search to see if she could pay someone to pick up dog food while they were eating out. When she couldn’t find anything, she registered the domain name RunMyErrand.com.
This platform became TaskRabbit, which introduced a new way to get odd jobs done and helped many people work with newfound flexibility. Of course, there are still plenty of problems with temporary work, which grew partly because so many people were desperate for alternative income. But with one in 10 adults now engaged in gig work, it’s here to stay.
Business lesson: If you feel an unmet consumer need so strongly you have to fix it, others will definitely feel it too.
How MailChimp reached more customers by giving away its product
Another tech explosion to come out of the economic decline of the late 2000s was MailChimp, which saw its user base grow by close to 500% in one year after making its product free. It’s gone from strength to strength since, posting $700m revenue in 2019.
MailChimp, an email marketing tool, had already built a loveable brand during the early 2000s. They were profitable, had a fair amount of customers and importantly, sat on reams of useful data about how existing users responded to their pricing.
So MailChimp’s decision to give away an entry-level version of its product wasn’t connected to the economy at the time. It was a calculated move to reach more users, informed by the years of customer data it had already built up.
But the company was founded to help businesses access easy-to-use email software. And when it had the resources to do so, MailChimp empowered thousands of small companies to reach their own customers, at a time when they needed it most.
Business lesson: Exponential growth rarely happens overnight – it requires careful planning, the data to make decisions and an already established brand.