I was the guest author of this week’s Startup Digest Tampa Bay newsletter, which was sent out on Monday. I was free to write about any topic that I thought subscribers to the newsletter might find interesting or useful, and I chose to write about reasons startup founders and members have to be optimistic even though we’re in a global pandemic and corresponding economic crisis.

I’d like to thank Techstars Tampa Bay, Startup Digest Tampa Bay curator Murewa Olubela, and Startup Digest Tampa Bay curator manager Alex Abell for inviting me to write for the newsletter!

Here’s “director’s cut” of my guest editorial, which has some additional information and ideas…

Reasons for startups to be optimistic

Rather than bore you with a long preamble, I’ll give your week a good start by getting straight to my point: The global pandemic comes with a global business crisis, and crises are where startups shine. Here are three reasons — each with a litany of sub-reasons — why startup founders and team members should be at least a little optimistic about the current situation.

1. Sometimes you don’t know that you’re living in a golden age

The first reason to be optimistic is that recessions have been known to hide golden ages. As far as the last recession is concerned, Thomas Friedman has a theory: That 2007 was “one of the single greatest technological inflection points since Gutenberg…and we all completely missed it.”

He made his point very compelling by listing what happened then in What the hell happened in 2007?, the second chapter of his 2016 book, Thank You for Being Late. I’ve compiled his list in the table below, expanded the scope to cover the years 2006 through 2008, and threw in some additional notes.

Looking at that time through the lens of the leaps in technology shown below, it seems like a golden age:

How did most of us miss all this? Friedman says that it’s because our collective attention was directed toward the credit crunch of 2008, which he calls “the deepest recession since the crash of 1929.”

Back then, everybody compared the financial collapse of that time to the stock market crash of ’29. Now that we’re in the middle of a pandemic, 2008 has become the new benchmark for economic catastrophe. As founders, entrepreneurs, and technologists, there’s a good chance that you’re already asking this question: Is there a chance that the current situation is also hiding a golden age for technology and startups?

In case you think that the golden age of 2006 – 2008 was just an outlier, here are a few examples from previous crises:

• Thomas Edison founded the company that would eventually become General Electric during an economic slump brought about by the Baring Crisis and “the world’s first bailout”, whose effects were felt worldwide, and it took an international consortium and a number of Rothschilds to prevent an economic catastrophe. In the 1960s, one of the few companies in the 1960s making computers and operating systems whose influence extends to this very day (GE, along with Bell Labs and MIT, made Multics, which would inspire the creation of Unix).
• The Tabulating Machine Company, which would evolve into IBM was born during The Panic of 1896, a sequel to the Panic of 1893. This was a time when the unemployment rate climbed as high at 15%. IBM is still a big player in mainframes, which are in the news again, thanks in part to the pandemic. 
• Apple and Microsoft came about in the mid-1970s, just after the 1973 – 1975 recession, the oil crisis of 1973, the Nixon shock, and the end of the gold standard and Bretton Woods, and the start of the U.S. dollar being a fiat currency (a term that you’re probably familiar with with you even just dabble in cryptocurrencies). You’re probably quite familiar with what these companies went on to do.

2. Startups that last get founded during downturns

Putting aside the chance that I might be a victim of survivorship bias, there are a number of reasons why a recession or economic downturn is the optimal time to create or join a startup:

• New situations create new needs: Just look at Zoom’s fortunes right now. What other needs has the “New Normal” created, in both the short and long term?
• Available brainpower: With an economic downturn comes increased unemployment, which means that the talent you need for your startup is more likely to be available (this pool of people includes myself). This brainpower can be key to a startup’s success.
• Available startups: If you’re not looking to be a founder and are looking for a place to work, you may find a number of founders looking to create their own company, often because they can’t find employment themselves.
• Recession pricing: The price of goods and services tends to drop during downturns, which is an advantage to a company that’s trying to operate “lean and mean.” There may also be some savings opportunities in other developments, including the drop in interest rates and other economic stimuli, as well as companies selling off assets that startups may find useful. You may even find it easier to get coverage, as the media will be looking for some “good news” stories to tell.
• Chaos: Your likely competition — large, established players — are probably in disarray or too focused on survival or reorganizing to take notice of you. A business that’s lean and nimble is better-positioned to navigate the changes that a downturn brings about, and better able to take advantage of the eventual turn-around.
• Pressure makes diamonds: There’s no comfort zone in a downturn! A company that starts during one has a culture of resilience and grit baked into its DNA, and the lessons that risk and non-terminal failure during difficult times teaches makes for a powerful team. The “war stories” that come about from shared challenges also make for a loyal team.

A downturn doesn’t guarantee success for a startup, but it’s a crucible that can strengthen one.

3. We’re in the middle of a number of natural experiments

The final item in this least of reasons to be optimistic is that we’re in a set of unprecedented natural experiments — that is, we’re witnessing “what if” scenarios that are no longer hypothetical. In these scenarios, there are object lessons, opportunities, and problems that the right startup idea could solve or ameliorate.

• Internet bandwidth: One of the major arguments that telcos have given us for bandwidth caps was that without this sort of control (they never mention the associated cash-grab), the internet would become so congested as to be unusable. With the pandemic, telcos have lifted bandwidth caps, and the internet still works, even with the additional usage from being home-bound as well as Tiger King.
• Remote work: In recent years, Yahoo! and IBM famously ended their remote work policies, which led other, smaller organizations to consider doing the same. With “safer at home” measures, we’re all global participants in a remote work experiment, and to the surprise of doubters, it seems to be working. Remote work is likely to be a fixture of office life even after this crisis, and this change will create a need for new and expanded services and technologies.
• Remote school: Just as working people are being subjected to a natural experiment, so are students and teachers, who are being thrown into the deep end with distance-learning tools and technologies. There are a number of challenges to overcome, such as  usability, adjusting teaching and learning styles, bringing it to students who can’t afford internet access or the right technology at home, to the disruption that this brings to students’ and teachers’ lives, and to the school curriculum in general.
• Unemployment: I’m in this category, as one of at least 10 million people in the U.S. who’ve suddenly found themselves without work. What happens when this many people are jobless, in a world with ubiquitous connectivity and computing? Remember, the smartphone as we know it was in the hands of a small number of people in 2008, while 4 out of 5 adults in the U.S. has a smartphone today. How can a startup help them get back to work?
• Additional online learning: You may have seen the advice in news stories or online: If you’ve been laid off, this is the perfect time to take an online course and “upskill.” With record numbers of people applying for unemployment assistance, we’re seeing a strong uptick in online course enrollments.
• Business and government systems under strain: While the internet seems to be handling the increase in use, other systems have been put under strain by the pandemic. The hospitality industry has largely been shut down. Supply chains are being stressed. Our pandemic response infrastructure was already gutted before the pandemic struck. Our governments are unprepared in all sorts of ways, from a piecemeal response to the pandemic, to aging, COBOL-powered systems unprepared (and in Florida’s case, unprepared by design) to process the massive influx of requests for unemployment assistance. This sounds like a job for a startup!
• Healthcare: The United States remains the only industrialized nation without universal healthcare. To my Canadian-raised mind, this is baffling; to many Americans, universal healthcare is an unaffordable luxury. The U.S. government’s ability to “magic up” trillions of dollars to stimulate the economy (or at least Ruth’s Chris Steak House) on incredibly short notice proves that if the political will existed, it could choose to bankroll universal healthcare. With 1 in 4 Americans expected to be unemployed and healthcare insurance generally being tied to employment, universal healthcare is no longer as “unthinkable” an idea as it once was.
• 3D printing’s first mass test: We’ve seen 3D printing useful in one-off situations (including a time when they needed a specific kind of wrench on the International Space Station), but with volunteers creating large numbers of face shields, masks, and even ventilator parts and adapters, this is 3D printing’s first at-scale test. The lessons from this effort have yet to be learned, and what we learn could launch printing into its next phase.
• Media and communications: This is the first worldwide crisis where publishers, from the largest media empire to individual vloggers, have become much relied-on sources of both information and misinformation. We’re not done seeing the full extent of their effects yet.
• Social systems put to the test: The disruption of normal life, including staying at home to social distancing, has resulted in widely different responses, from science-based to conspiracy theory-based. The major social media players have put in some measures to fight the spread of accidentally or deliberately incorrect information. I have no doubt that even nation-states are playing the misinformation game; after all, the saying is “never let a good crisis go to waste.”
• New political movements: The economic downturn of 2008 left a lot of people dislocated and in dire situations from which they still haven’t recovered, giving birth to a new populism, a willingness to follow brutish, xenophobic, and nationalistic leaders, and movements like Brexit and MAGA. What will this new situation — one brought about at least partially by the movements that arose after 2008 — bring?
• Emerging cultures of control: I’m going to end this list on a slightly darker note, in spite of my general optimism. We’re already seeing signs of an emerging hygiene culture and an awareness of the importance of hand-washing, which is good. Perhaps there are startup opportunities that might come about from people being more aware of the power of microorganisms and viruses (viruses are technically “not alive”, and exist in their own category). More worrisome are other cultures of control, namely those of surveillance and authoritarianism, which are also rearing their heads during this crisis. Let’s take care so that the things we create don’t turn the world into another Black Mirror episode.