20 Amazing Companies Founded During The Financial Crisis

Jan 22 2014, 9:16am CST | by

20 Amazing Companies Founded During The Financial Crisis

20 Amazing Companies That Were Founded During The Financial Crisis

Of the 100 companies listed on our annual America’s Most Promising List, around a third were forged in the doom and gloom years of the global financial crisis. How did these companies achieve extraordinary growth when others were in freefall? Here some of the CEOs tell us how they turned starting out in a bleak economy to their advantage.

“Scarcity of capital is like draught season in the Serengeti,” says Jed Yueh, CEO of Delphix, which develops database software that helps reducing processing time and storage requirements. The company has raised $45.5 million from Greylock Partners, Lightspeed Venture Partners and others. “As conditions improved, companies that survived benefitted from having fewer competitors. Or in our case, it’s one of the reasons we still don’t have any direct competitors,” he says.

It was a time when guests were buckling their belts, paying closer attention to their budgets and seeking more value from restaurant options. This was how the fast casual movement was born,” says Scott Crane, founder of Smashburger, our No. 6 ranked company which did $228 million in revenue last year.

“Real estate was more affordable during this time, so we were able to take advantage of better economics and key locations we would not have been able to access to prior to the recession given the newness of our brand and lack of a national/regional presence,” he says.

A key advantage was that everything was cheaper in 2007 and 2008.  “We were able to acquire smaller companies for very favorable multiples since there was less competition bidding for these businesses.  Moreover, their limited access to capital stunted their growth allowing us to gain leverage very quickly once they were part of XL Marketing,” said David A. Steinberg, CEO of Zeta Interactive, which was previously XL Marketing.

“As businesses were shutting down and liquidating, we took advantage and purchased all of our office furniture and equipment at dirt cheap prices,” said David Allerby, CEO of 24Hr HomeCare, a rapidly expanding in-home elderly care business.

It also forced companies to do more with less. “Not having access to capital forced us to say no to many of the ideas we thought were great at the time. Likewise, our attention to detail and focus on measurable results have enabled us to grow and maintain a competitive advantage in the marketplace,” said Doron Reuveni, founder and CEO of uTest, our No. 7 ranked company which tests for bugs in clients’ software using a pool of 100,000 part-time testers across the globe. The company will rebrand as Applause this year.

Brian Williams, the CEO of OneSource Virtual, our No. 24 ranked company, which helps companies outsource backroom jobs like accounting agreed that not having access to venture capital injected a sense of discipline early on. “In 2008 access to money for a startup was very limited. This forced the OneSource Virtual executive team to be disciplined with every dollar we spent, as well as disciplined with every decision we made,” he says.

“Not having access to capital forced us to say no to many of the ideas we thought were great at the time. Likewise, our attention to detail and focus on measurable results have enabled us to grow and maintain a competitive advantage in the marketplace,” he added.

“Raising too much capital too soon can impair a company’s operating efficiency as hard decisions about capital allocation are not made.  We’ve been fastidious about how we deploy our capital from Day 1 and have always focused on building a strong core,” said, Omar Tawakol CEO of BlueKai, our No.13 ranked company which reported revenue of $64 million for 2013.

“We succeeded because we bet the farm on a high growth market, specifically Apple's new iPhone and App Store,” says Jeff Smith, CEO of Smule which we ranked No. 29. Smule reported revenue of $21 million last year. The company makes music creation apps for mobile phones and tablets.

“At the same time we were launching Smule in ’08, I recall my stock broker telling me to sell all of my Apple stock because it was a luxury brand and as a result they would be the first to get hit by the great recession.  Good thing I didn’t listen to him,” he adds.

Source: Forbes Business

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Young Europeans less informed about 'legal highs': Survey
Brussels, Aug 22 (IANS) Young Europeans are less informed about "legal highs" and the effects of drugs compared to a few years ago, a survey said.
 
 
Two US Ebola patients released from hospital
Washington, Aug 22 (IANS) Two US aid workers who contracted the Ebola virus while treating patients in west Africa have been discharged from the Emory University Hospital in Atlanta, the hospital said Thursday.
 
 
US doctor with Ebola to be released from hospital
Washington, Aug 21 (IANS) An American doctor who contracted the Ebola virus disease while treating patients in West Africa will be discharged from a US hospital Thursday, the aid group he worked for said.
 
 
Bengal, Singapore to work on study paper on business: Mamata
Singapore, Aug 21 (IANS) The West Bengal government, in association with the National University of Singapore, will create a study paper with focus parameters to facilitate entrepreneurs, Chief Minister Mamata Banerjee said Thursday.
 
 
 

Latest from the Network

Red carpets make Ariana Grande 'anxious'
Los Angeles, Aug 22 (IANS) Singer Ariana Grande, who is due to attend the MTV Video Music Awards (VMAs) Sunday, gets nervous before such events. She says she is "working on" becoming the "best on the red carpet". "I'm...
Read more on Celebrity Balla
 
Hurley wants to keep son away from 'The Royals'
Los Angeles, Aug 22 (IANS) Actress Elizabeth Hurley says her new TV show "The Royals" is too racy for her 12-year-old son Damian to watch. The 49-year-old portrays British monarch Queen Helena in "The Royals" and...
Read more on Celebrity Balla
 
Adele to perform on 'The X Factor'?
London, Aug 22 (IANS) If all goes as "The X Factor" bosses are planning, award winning songstress Adele could be a major attraction of the live shows of the British version of the music reality show later this year. "...
Read more on Celebrity Balla
 
Syrian army kills 140 IS fighters
Damascus, Aug 22 (IANS) At least 140 fighters of the Islamic State (IS) were killed Thursday in an ambush by the Syrian army near an airbase in al-Raqqa province, a media report said. The Syrian army ambushed the...
Read more on Politics Balla
 
Daniel Radcliffe is learning Japanese
Daniel Radcliffe is learning Japanese. The 25-year-old actor has been taking lessons in order to speak the East Asian language fluently but he admits he is struggling with it at the moment. He said: ''I just started...
Read more on Celebrity Balla
 
Karrueche Tran not 'ready' for baby?
Karrueche Tran reportedly doesn't feel ''ready'' to have children with Chris Brown. The 25-year-old singer sparked rumors earlier this week he and his on/off girlfriend were trying for a baby, but friends of the 26-year...
Read more on Celebrity Balla
 
Wilmer Valderrama sends Demi Lovato romantic birthday message
Wilmer Valderrama sent Demi Lovato a romantic birthday message on Instagram yesterday (08.20.14). The 34-year-old actor, who likes to keep his relationship private, took to the social networking site in a rare show of...
Read more on Celebrity Balla
 
Taylor Swift and John Mayer ignored each other at restaurant
Taylor Swift and John Mayer reportedly ignored one another as they dined separately at the same restaurant last night (08.20.14). The former couple - who dated five years ago - allegedly avoided eye contact as they...
Read more on Celebrity Balla
 
Defeated Indonesian presidential candidate accepts court ruling
Jakarta, Aug 22 (IANS) Former general Prabowo Subianto accepted the final ruling of the Constitutional Court that has summarily rejected all his allegations that challenged the result of Indonesia's presidential race,...
Read more on Politics Balla
 
Local polls announced in Taiwan
Taipei, Aug 22 (IANS) Electoral authorities in Taiwan Thursday announced the island's local polls in which over 10,000 public officials will be elected Nov 29. The island, for the first time, will be concurrently...
Read more on Politics Balla