it gets a tough year for entrepreneurs. Funds are tight, top leaders are harder to lure away from secure corporate jobs, and discretionary spending and marketing have come to a standstill. Economic crises are no fun for anyone, but when you’re trying to build a global business from scratch, headwinds are like a hurricane.
However, if we look further, there is good reason to be optimistic. Historically, the most exciting and generation-shaping startups have been those built during challenging times. Think of Facebook, launched in 2004, in the shadow of the dotcom bust. Google also raised capital during this period and managed to grow through the broader economic downturn. Fintech companies like Square and Stripe were founded in the wake of the 2008 subprime lending crisis, which dented confidence in mainstream finance.
Why is this possible? First, different economic cycles attract different types of entrepreneurs. When money is hot, investors meet a lot of “momentary” founders: people who are riding the waves and who could easily find another job if things don’t go well. But the entrepreneurs who built companies after the recession were a different group. They often have a meaningful vision that they will realize, no matter what, and they tend to pursue it relentlessly. With fewer job openings, they – and their employees – are naturally more committed to the company’s success. This kind of dedication screens out those who can execute non-stop, and it creates companies that are more willing to take advantage of opportunities as economic conditions improve.
The second benefit of starting a business during a recession is the lack of competition. In bull markets, there can be dozens of other businesses trying to outdo you in almost every area. But during a recession, fewer people will try to cut back on the action. This leaves open space for motivated entrepreneurs to take first-mover advantage and dominate the market.
Finally, companies that were founded after the collapse also found it easier to find the talent they needed. As the business cycle goes up, attracting and retaining the right people to help you grow is often a founder’s biggest headache. Talented workers are flooded with opportunities and tend to switch jobs between companies more often. But with fewer well-capitalized companies competing for talent, you may have a better chance of hiring the right executive.
These reasons show why in 2023 we can expect the launch of the most transformative companies of the next decade. The kind of business that blooms will be a direct response to many of the crises that have affected us over the past few years: Covid, the war in Ukraine, record temperatures and wildfires caused by climate change.
For example, due to the pandemic and the pressure on healthcare systems worldwide, companies that are seizing opportunities in the healthcare and pharmaceutical sectors are likely to see an increase in get a raise. These will include AI-powered health technologies to tackle systemic problems of national health care systems and the use of mRNA vaccines to tackle other diseases such as malaria and diabetes. Street.
Another big trend concerns climate and the environment. Many entrepreneurs today are preparing to tackle environmental issues and direct secondary consequences, targeting sectors such as energy, transportation, manufacturing and finance, among others. other area. Escalating geopolitical tensions, from China to Ukraine, also raise questions about security, autonomy and stability. This new geopolitical environment will create opportunities for new companies in strategic sectors such as defense, hardware, cybersecurity, energy and food.
In 2023, businesses that address the enormous challenges facing society may not start out looking like the world’s dominant companies. They will have to be agile, resourceful and neat. But you can be sure that, in a decade, they will be the names on everyone’s lips.
