Ask HN: What is a good tech business model to start during a recession? | Hacker News Reader

Ask HN: What is a good tech business model to start during a recession?

3 pointsnumakerg5 comments

In the WeWTF article that's currently on the front page, Scott Galloway mentions that the firms he started during recessions were more successful for these reasons:

1. an easier time finding talent

2. easier to control costs

3. getting immediate feedback because clients/customer held their purse strings closed

What type of business model do think would be more successful under in an economic downturn?

For example, I think services where users altruistically pay to support creators whose media is largely free to consume (e.g. Patreon, Twitch) wouldn't yield as much revenue because people have less disposable income. I can't really think of a model that would do well under these conditions. Of course I could look up Scott's past work, but that would be cheating.

Ideally, you want to start the business just before the bottom of the business cycle and have a large market share during the next boom. Many companies started in 2007-2008 managed to hire great people at the beginning and are bringing in huge revenue today.

Many products can be sold as cost savers during the trough, and rake in huge profits during the boom. Cloud computing is an example -- people start using it to avoid buying servers but during boom times they over-provision.

>What type of business model do think would be more successful under in an economic downturn?

The type that was successful during the good times. A good business that solves customer problems or provides value will survive in all kinds of economic conditions.

Scott is connected. His resources are endless. Unless you're rich or have incredibly rich friends or investors it isn't going to happen.

Historically people go to the movies during recessions... but I wouldn't count on that this next time around

Something that helps a company do more with less. It's probably less about model and more about product.

Dollar stores. Buy Dollar Tree (ticker: DLTR) or invest in Wish.

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