The Federal Government of Nigeria announced their intention to register 250,000 businesses for free. The question I am certain most Nigerians asked was “Is the recession really a good time to start a business?”
This question may have been asked many times over and over again; but at a time when the same government is blaming the Coronavirus pandemic for the recession, it doesn’t seem like those questioning the timing will have a change of mind any time soon.
If you take a close look at some of the biggest companies today, many were started during the financial crisis; including WhatsApp, Uber, Square, Slack and Airbnb.
Startups have some advantages during a recession compared to larger corporations. This is because they are lean and agile by nature; and are better poised to navigate a rapidly changing economy; and as unemployment rises, startups have access to more quality talent during a recession.
Finally, when the recession ends, these startups become attractive to investors; because they have bootstrapped and proven themselves during lean times; they have achieved product-market fit during a recession; and are set up to take fuller advantage of growth opportunities as soon as the economy starts to rebound.
According to Business Insider, the idea of Airbnb was conceived in 2007 when roommates Joe Gebbia and Brian Chesky decided to rent out air mattresses. The multibillion-dollar business was then born in August 2008; with a launch of a simple online platform to rent out an air mattress. The recession was the game changer for Airbnb. When the Great Recession hit later that same year, suddenly the need for short-term, low-commitment living quarters exploded exponentially.
According to Investopedia, Uber’s story originated in Paris when the two friends, Travis Kalanick and Garrett Camp attended LeWeb, a yearly tech conference in December 2008.
And in March 2009, Uber was founded as UberCab, a taxi service. The services were tested in New York with only three cars in 2010, and then formally launched in San Fransisco in May. In 2011, the company changed its name from UberCab to Uber after objections from San Francisco taxi operators.
These are just a few examples of businesses that were conceived during a recession; survived the recession and are doing great in world economies today.
You may ask how this relates to the Nigerian economy; particularly on the heels of reports that the Nigerian recession may last up to 2022. The World Bank, in a report titled “Rising to the Challenge: Nigeria’s COVID response” noted that the “average Nigerian could see a reversal of decades of economic growth and the country could enter its deepest recession since the 1980s”.
The recession is truly upon us and the projections of the future remain projections. However, what history has shown us is that there are events that seem to repeat themselves. Just as Airbnb was born due to the high cost of rent during a recession and has stood the test of time, your idea could also do the same.
According to a co-founder and CEO of Airbnb, Brian Chesky;
A number of people have said that Airbnb is the worst idea that ever worked. Or at least I can say, everyone at the time seemed to say it was the worst idea ever, and it worked. So maybe that’s the nice connection.
Airbnb went from airbeds and shared spaces to a wide array of properties including entire homes, private rooms, apartments, manors, castles, and private islands.
Back in Nigeria, experts have commented on the possibilities of creating successful businesses during a recession.
Ruth Olurounbi, Founder and Columnist, the chatroom, Tribune Newspaper was quoted as saying; “the recession presents an opportunity for entrepreneurs to develop the big-picture strategy and find ways to make their businesses survive the test of time. After all, being an entrepreneur is about giving everything you have when the going gets tough and never giving up. Like the saying goes, if you truly love what you’re doing and you believe in it, you won’t give up on it”.
So many individuals are of the opinion that the recession is the worst time to start a business. However, Oghenefego Ofili-Creative Director, Teo-Inspiro Intl Ltd, a multimedia production company, thinks otherwise;
“I do not agree this is the worst time to start a business in Nigeria. It is actually the best time. If you can identify what people need in times of recession, and can provide quality and standard in Nigeria, I believe people will patronize you. The best time to set up that business is now.”Oghenefego Ofili
In times of recession, there are massive opportunities; a point established by Sir Richard Branson, founder of Virgin Atlantic;
“In times of recession, there are massive opportunities and fortunes to be made, so for new up and coming entrepreneurs, this is the time to go and start a business”Richard Branson
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