New businesses are the secret ingredient to economic growth, catalysing innovation and disrupting industries. Globally, startups create nearly $3 trillion in value (more than France’s GDP) and attract billions in venture capital funding. And it’s not just about the money. Startups are also responsible for driving technological advances that make our lives easier, safer, and more productive.
However, as economists and CEOs predict an impending recession, the “fire hose of money” aimed at startups, as one investor put it, is drying up. As VC funding slows and consumers rein in spending, startups and new businesses are feeling the pressure — but that doesn’t mean winter is coming for the tech industry.
In fact, tough economic times can be a differentiator for savvy startups. Some of today’s most prominent technology platforms were launched after the 2008-2009 recession, which forced innovators and entrepreneurs to take risks and adapt their business models.
If you’re reading this comment during the workday, it may have come to you through Slack – a company founded in 2009. WhatsApp and Instagram were also founded at the height of the 2008 recession.
You might think these companies survived, of course – they’re huge! But it’s not just the big household names that have thrived in a recession. In 2008, Goal Zero founder Robert Workman launched his company’s first product, a portable solar power generator. Since then, the company has deployed its products around the world, bringing light and power to villages in Africa, South Asia and the Caribbean, as well as to areas in the United States living without electricity after natural disasters.
For many founders, success can also mean acquisition. In 2008, serial entrepreneur Carmichael Roberts co-founded MC10, a manufacturer of flexible electronic sensors. A little over a decade later, the company sold its digital biomarkers business to medtech giant Medidata, expanding the use of wearable sensors for clinical research.
So to those who are pessimistic about the future of our industry, I say: you are wrong. Tech founders are used to tackling seemingly impossible challenges. Our industry is designed to hack its way out of problems.
The reality is that even in a boom cycle, about 75% of startups won’t repay investors’ capital. Building and scaling a new business is a huge challenge. Those who are successful all have one thing in common: the ability and willingness to embrace change and transform their business. Startup founders have a “ninja mentality” that allows a company to navigate a volatile market environment, understand what its customers want, and seize opportunities at lightning speed.
After CES, the world’s most influential technology event, went purely virtual in 2021, skeptics questioned our decision to proceed with an in-person event. And while some companies chose not to join us in Las Vegas, exhibitors – particularly startups and small businesses – overwhelmingly identified the CES platform as critical to their business.
It’s natural for startups to be cautious, especially when the going gets tough. But being overly cautious can result in you missing out on opportunities to grow your business and advance life-changing technologies. Don’t use a bad economy as an excuse to retire. Instead, embrace change and learn to pivot quickly.
Gary Shapiro is President and CEO of the Consumer Technology Association (CTA), the US trade association representing more than 1,500 consumer technology companies and a New York Times bestselling author. He is the author of the book Ninja Future: Secrets of Success in the New World of Innovation. His views are his own.
The opinions expressed in Fortune.com comments are solely the views of their authors and do not reflect the opinions and beliefs of wealth.
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