The Crisis and the New Entrant
Who speeds up when all else stalls?
During the Great Depression, Revlon introduced the world’s first pigment-based red nail polish, Cherries in the Snow. It was a small luxury in a time of financial hardship and provided an affordable indulgence when larger luxuries were out of reach. This product helped Revlon evolve from a drugstore supplier to a global cosmetics brand.
Downturns have often sparked innovation. While established players consolidate, new entrants emerge. They spot gaps, respond to shifting consumer behaviours, and move quickly. These are not anomalies. They are patterns.
Companies Born from Crisis
In 1929, the stock market crash led to the Great Depression. While many businesses folded, Walt Disney doubled down on storytelling and innovation. Steamboat Willie introduced synchronised sound to animation and provided audiences much-needed escapism. As the company struggled financially, Disney diversified into merchandising, creating a new revenue stream that kept the business afloat.
During the mid-1970s, an oil crisis, stagflation, and rising unemployment created a difficult economic climate. During this time, Microsoft was founded by Bill Gates and Paul Allen. Their first major product, Altair BASIC, catered to the niche but growing personal computing market. By 1980, Microsoft’s partnership with IBM solidified its position in the industry and shifted the focus from hardware to software.
Founded in 2006, Xero, a cloud-based accounting software company from New Zealand, scaled rapidly during the 2008 financial crisis. Small businesses, hit hard by the downturn, needed cost-effective ways to manage finances remotely. Xero provided a flexible, scalable solution that capitalised on the shift to digital financial management, enabling global expansion.
In 2008, the global financial crisis saw mass layoffs and reduced disposable incomes. Airbnb was born out of necessity when its founders, struggling to afford rent, rented out air mattresses in their San Francisco apartment during a design conference. The concept resonated during the recession by offering a cheaper alternative to hotels and enabling homeowners to generate extra income. The company grew rapidly, driven by the sharing economy trend and shifting travel preferences.
The Pattern Holds
Every crisis reshapes industries. As markets tighten and the cost of business and living rises, consumer priorities shift. Some industries decline, others evolve, and new opportunities emerge.
The difference now? New entrants will come from everywhere.
Access to knowledge, funding, and global networks is broader than ever. Innovation is not limited to Silicon Valley, New York, or London. It’s happening in Nairobi, São Paulo, Jakarta, and beyond.
At the same time, agency is accelerating - entrepreneurs and businesses can do more with less.
The recent DeepSeek example illustrates this shift. DeepSeek, a Chinese AI startup, has demonstrated how innovation and resource efficiency can challenge industry leaders. Despite limited funding and constraints on high-end GPUs due to export restrictions, DeepSeek developed an AI model that rivals or surpasses leading US counterparts at a fraction of the cost. Success stems from leveraging smarter global strategies, optimising resources, and moving fast in large markets.
For businesses around the world, cloud computing has reduced the cost of infrastructure, AI tools are automating complex processes, and global platforms enable instant market access.
Across Africa, startups are scaling with mobile-first solutions; in parts of Asia, small manufacturers are increasingly leveraging 3D printing to bypass traditional supply chains; and digital entrepreneurs globally are scaling their businesses without physical expansion, using e-commerce, AI, and digital platforms.
What’s Next?
While resources, budget, and time are tight for many entrepreneurs, business leaders, and companies of all sizes, opportunities exist. A quick scan of global trends can reveal new possibilities.
Questions to get started:
Where are the new needs? Consumer priorities shift in crisis. What products or services will become essential? Who is moving fast? Emerging players are often more agile than incumbents. Who is testing new models? What can you learn from past crises? The companies that won before weren’t necessarily the biggest, but they identified a need and moved.
The adage “Never let a good crisis go to waste,” often attributed to Winston Churchill, has held true for decades. The next generation of market-shaping businesses is being built around the world.
When we see the bigger picture, we can play a bigger game.
Crisis doesn’t mean stagnation. Around the world, who is innovating in your field? Could you collaborate or carve out space to create?
Fantastic piece, Sophie. Love how you highlight the pattern of crisis-born innovation. History keeps proving it true. Do you think the next wave of crisis-driven startups will look different from past cycles? Would love to hear your thoughts. What are you betting on right now?