Like every other country, Pakistan has been hit hard by the global recession, seeing a massive downturn and a rapid depreciation of the rupee. The situation is only exacerbated by the country’s political instability. The entrepreneurial ecosystem has been hit particularly hard, with funding nosediving by a devastating 94% from last year.
With businesses rolling back operations and mass layoffs, things may seem incredibly dismal but there is hope yet. According to a study conducted by TouchdownVentures in 2020, 24% of the companies on the Fortune 500 in 2019 were founded during a period of recession. As counterintuitive as it may seem, this might be the best time to launch your dream startup.
Here’s why:
New Problems to Solve
As the economy shifts, a new host of problems and pain points emerge. From workers looking for more tailored work opportunities to businesses increasingly investing in financial planning, new startups can identify and work to fill in unique market gaps.
This is evident through disruptive unicorn and decacorn companies such as Uber, Slack and Airbnb, founded in the midst of some of the worst recessions in history.
Easier Customer Acquisition
Downturns usually mark a prominent change in consumer trends, with people cutting out luxuries and looking for more convenient and cost-alternative products and services. This means consumers are more willing to give small businesses a chance, often forgoing brand loyalty to bigger firms.
Launching your startup in a recession puts you in a unique landscape, where your business faces comparatively less competition from companies that otherwise monopolize the market.
A Replenished Talent Pipeline
ResumeBuilder surveyed a sample of a 1000 business leaders and found 1 in 3 companies anticipating laying off 30% or more of their workforce with 70% likely to implement a hiring freeze in 2023. In times like these, job security is a luxury a few of us can afford.
