For many people, starting a company in the midst of a global economic crisis is the last thing on their lockdown to-do list. But it might not be such a crazy idea.
According to entrepreneurs and start-up investors CNBC spoke with, now might even be the best time to start thinking about setting up a new venture from home.
The coronavirus pandemic is in many ways serving as a “catalyst to creation,” Index Ventures Partner Jan Hammer told CNBC. He thinks history may be on the side of entrepreneurs building their businesses at a time of adversity.
“If history gives us a good precedent, out of the last crisis — which was the great financial crisis of 2008 to 2010 — a cohort of extremely resilient businesses have emerged,” Hammer said in an interview.
“These were ideas born in, you could argue, difficult times,” Hammer added. “And in a way, the trends that had driven the growth of these businesses were unrelated to the macroeconomic cycle.”
There are plenty of businesses which were founded during or around the time of economic crises.
General Motors, IBM and HP are some of the biggest names that were born out of downturns, such as the panic of 1907 and the Great Depression. Meanwhile, many tech start-ups, such as Groupon, Uber and Pinterest, were established during or shortly after the Great Recession.
Building new ventures
Lara Vandenberg launched Publicist, an online marketplace for businesses to find freelancers in PR and communications, on Tuesday. Usually New York-based, Vandenberg temporarily moved back to her native Australia as the coronavirus hit the U.S., but pressed on regardless of the time difference.
Around 35% of the U.S. workforce — or 57 million people — are freelance, according to a report by jobs website Upwork, and the pandemic has accelerated a move to project-based work, Vandenberg said.
Publicist is about to close a funding round after bootstrapping the beta site, though isn’t disclosing how much it has raised. It will charge hirers 20% commission per project.
“Although we are launching a company at this really volatile point in this macro economy, the future of work is an area people are really excited about,” Vandenberg told CNBC. “And in parallel, it’s just an exciting problem to solve.”