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

Finnish scientists identify new type of black hole
Helsinki, Oct 31 (IANS) Finnish researchers have discovered a new type of low-mass black hole, which is a bright celestial body that emits X-ray, the University of Turku has said.
 
 
Union Carbide ex-chief Warren Anderson is dead
Washington, Oct 31 (IANS) Warren Anderson, former chief executive officer of the Union Carbide Corporation, is dead, a media report said Friday. He was 92.
 
 
Himalayan Viagra fuels gold rush for local Tibetans
Washington, Oct 31 (IANS) Overwhelmed by people trying to find the prized medicinal fungus known as Himalayan Viagra, two isolated Tibetan communities have managed to implement a successful system for the sustainable harvest of the precious natural resource, suggests research.
 
 
Oceans were always there on Earth: Scientists
Washington, Oct 31 (IANS) Debunking previous theories that water came late to Earth well after the planet had formed, researchers have significantly moved back the clock for the first evidence of water on Earth and in the inner solar system.
 
 
 

Latest from the Network

Orson Welles last film to be released
Orson Welles' final movie will finally be released next year. The acclaimed filmmaker had worked on 'The Other Side of the Wind' - which chronicles a temperamental film director battling with the Hollywood establishment...
Read more on Movie Balla
 
Game of Thrones stars get pay rise
'Games of Thrones' cast members will be paid $300,000 an episode. Five of the shows biggest stars - Peter Dinklage, Kit Harington, Lena Headey, Emilia Clarke and Nikolaj Coster-Waldau - have landed bumper payrises after...
Read more on Celebrity Balla
 
Mike Tyson: I was abused
Mike Tyson claims he was sexually abused as a child. The 48-year-old retired boxer was ''snatched'' off the street when he was seven by an ''old man'', who he never saw again after the shocking one-time incident....
Read more on Celebrity Balla
 
Amanda Bynes released from psychiatric facility
Amanda Bynes has been released from a psychiatric treatment facility. The 'Easy A' actress was spotted walking around Sunset Strip, West Hollywood, last night (30.10.14), 19 days after she was admitted to the hospital...
Read more on Celebrity Balla
 
Lindsay Lohan sued for 60m
Lindsay Lohan is being sued for over $60 million. A website developer has filed a case against the 'Mean Girls' actress and her brother Michael in which he accused them of stealing one of his ideas. According to Fima...
Read more on Celebrity Balla
 
Russell Brand to give money away
Russell Brand plans to give away his future earnings. The 39-year-old star insists he ''doesn't need'' to make money for himself anymore so wants to use his fortune to help those in need. He told Vanity Fair magazine...
Read more on Celebrity Balla
 
Koji Uerhara Signs 2-Year, $18M Deal With Boston Red Sox
Ace Japanese closer Koji Uehara signed a two-year deal with the Boston Red Sox on Oct. 30.According to MLB.com's Ian Browne, Uehara's deal is worth $18 million:"Perhaps it was fitting that the Red Sox announced a two-...
Read more on Sport Balla
 
Finnish scientists identify new type of black hole
Helsinki, Oct 31 (IANS) Finnish researchers have discovered a new type of low-mass black hole, which is a bright celestial body that emits X-ray, the University of Turku has said. Researchers at the Finnish university...
Read more on Business Balla
 
Union Carbide ex-chief Warren Anderson is dead
Washington, Oct 31 (IANS) Warren Anderson, former chief executive officer of the Union Carbide Corporation, is dead, a media report said Friday. He was 92. His death revived memories of the 1984 Bhopal gas tragedy. He...
Read more on Business Balla
 
Himalayan Viagra fuels gold rush for local Tibetans
Washington, Oct 31 (IANS) Overwhelmed by people trying to find the prized medicinal fungus known as Himalayan Viagra, two isolated Tibetan communities have managed to implement a successful system for the sustainable...
Read more on Business Balla