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The crisis is the best time to start a business

Scott Galloway at the DLD conference 2016 in Munich

Scott Galloway at the DLD conference 2016 in Munich

obias Hase / picture alliance via Getty Images

Tech expert Scott Galloway explains in an interview with NewsABC.net why recessions are the best time to start.

He founded nine companies himself – the most successful of them after crises, as he says.

In Germany, experts also expect an increase in start-ups as a result of the Corona crisis. The reason are so-called emergency foundations.

Scott Galloway is notorious for his precise predictions about the future of the tech industry. The New York marketing professor has seen many developments come before all others in the past, including Amazon’s takeover of Whole Foods and the descent of Wework. Ever since his bestseller “The Four: The Secret DNA of Amazon, Apple, Facebook and Google” he has been one of the most distinguished experts in Silicon Valley.

In an interview with Sara Silverstein, editor at NewsABC.net USA, Galloway explains the consequences of the corona crisis and how the exceptional situation could disrupt certain industries.

“Deepening a recession is a great time”

According to Galloway, the crisis offers a great opportunity for start-ups. “In about six to 12 months, there won’t have been a better time to start a small business in the past decade,” said Galloway. “Starting a company in the depths of a recession is a great time.”

He spoke on his own
Experience. If he looks back at his nine foundations, he is
decisive factor for success and failure has mostly been the timing, being
his projects were more successful right after the financial crisis.

“Good people are not that expensive, real estate is cheaper. Your resources, your raw materials, all the things you need to start a new business are much cheaper, ”said Galloway. In addition, crises would always act as a catalyst for innovations. Companies are much more willing to try new things afterwards.

KfW anticipates a start-up surge as a result of the Corona crisis

In fact, the number of start-ups usually increases after severe recessions. After the financial crisis of 2007/2008, the number of company founders in Germany, for example, increased by ten percent, as data from the KfW start-up monitor show.

According to experts, this is mainly due to so-called emergency start-ups. The worse the chances on the job market, the more people become self-employed. KfW Bank therefore expects the number of start-ups to rise as a result of the Corona crisis in 2020, as it was in the financial crisis.

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