A few weeks before Thanksgiving, my 6-year-old came home with a Labubu.
Not a boo-boo, which he often comes home with after a rough soccer match. But a Labubu, a small, strange-looking plush toy:
I’d never heard of them, so I went online to do some research.
I soon learned they’d become wildly popular — with kids, and also with investors. In fact, a limited-edition “Vans Old Skool” Labubu had sold for $10,585. Furthermore, a writer from Forbes said Labubus “might be good investments.”
I didn’t need any more data to draw my conclusion:
We were in a bubble — not just for plush toys, but likely for everything.
Grinding Higher
With stocks trading at record levels, it’s tough to know where to invest.
Sure, we keep having pullbacks — in crypto, in momentum stocks, in the Mag 7. But after the pullbacks, we keep pushing higher. And meanwhile, new types of “investments” with dubious value, like Labubus, reflect a speculative mindset.
If this is a melt-up, it’s not time to get out. Markets could keep grinding higher for months or years.
But eventually, the bubble will pop. So, where can we turn?
Timing Is Everything
When it comes to investing, timing is everything.
And sitting here at the end of 2025, timing seems to be awful.
Wars around the globe, record inflation, weakness in the labor market, a potential recession waiting in the wings — at first blush, things couldn’t look much worse.
So why does legendary investor Bill Gurley say times like this are a great time to invest in startups?
Let’s take a look.
An $8 Billion Fortune Made from Startups
Bill Gurley knows a thing or two about investing.
As a Partner at venture firm Benchmark, Gurley invested in startups including Uber, Grubhub, and OpenTable at their earliest stages. And his ability to pick the right investment at the right time led him to a net worth estimated at $8 billion.
So why does Gurley believe that eras like we’re in today — in the midst of war, inflation, and an impending recession — are a great time to launch a startup, and a great time to invest in startups?
Here are a few of his reasons.
Time to “Get in Touch”
Access to Talent — When there’s economic turmoil and layoffs, it’s easier for startups to hire. As Gurley says, “A huge thing is that your access to talent is way better.” And with somewhere between 141,159 and 207,000 tech workers having already been laid off this year, that access is growing.
Less Distractions — When it’s harder to raise funding, startups are forced to focus on their core business, instead of on distractions like watching every move their competitors make. As Gurley notes, “That whole mentality of your competitor raised $100 million, now you have to raise $100 million. All those things have evaporated — for the better, I’d say.”
A Shifting Environment Creates Opportunities — With no “legacy” operations to slow them down, startups can quickly adapt to a changing environment, and can reap the rewards. As Gurley said, “You have to play the game on the field. If everything has reset, it has reset. The sooner you get in touch with that, the better you’ll do.”
If anyone knows about this topic, it’s Bill Gurley. But still, I wanted to see proof…
I wanted to find evidence that great companies — and more importantly, valuable companies, where early investors made fortunes — had been started during terrible economic times.
Here’s what I found.
Thirteen Billion-Dollar Companies That Got Started in Awful Times
I quickly found dozens of examples of startups that launched during recessions… and made their early investors a fortune. Here are thirteen you’ve probably heard of.
- Disney — In 1929, Walt and Roy Disney launched Walt Disney Productions just as the Great Depression was starting. After navigating the challenges of a depression, the company (NYSE: DIS) just kept growing and growing. By 2024, its annual revenues reached $91 billion.
- Microsoft — Microsoft (Nasdaq: MSFT) was founded during the oil-embargo recession of 1975. Early investors got in at a valuation of just $20 million. Today the company is worth upwards of $4 trillion — so those early investors potentially banked profits of 200,000x their money.
- Electronic Arts — Electronic Arts (Nasdaq: EA) is the video-game company behind titles including The Sims, Madden NFL, and Battlefield. It was founded in 1982, during one of the worst downturns since the Great Depression. Today it’s worth about $50 billion (NASDAQ:EA).
- Airbnb — Airbnb (Nasdaq: ABNB) was founded during the Great Recession of 2007/2008. It got started because its founders needed money! Many investors turned the company down when it needed funding, but Sequoia Capital stepped up to the plate: in 2009, it bought 585 million shares in the tiny startup for roughly a penny each. When the company went public in 2020, those shares were worth $145 apiece.
- Uber — Uber (NYSE: UBER) is another company that got started during the Great Recession. In 2010, Mark Cuban reportedly turned down the chance to buy 5% of it for $200,000. Today, that small stake would be worth about $10 billion.
And as I discovered in my research, this list goes on and on:
Hyatt Hotels, Trader Joe’s, Slack, FedEx, WhatsApp, Square, Instagram, Pinterest…
Every one of those companies got started in terrible economic times, became extraordinarily successful — and delivered extraordinary returns to its earliest startup investors.
It’s a Great Time to Invest in Startups
So, is it the right time to invest in startups?
As you learned today, it can always be the right time — even when the timing seems terrible.
You just need to invest in the right startups, and invest in a portfolio of them. That’s how you’ll maximize your gains and minimize your losses.
One way to identify the right startups is to focus on a few key attributes, like I’ve been teaching you in my recent essays.
To learn about other ways to identify the right startups, stay tuned!
Happy Investing
Best Regards,
Founder
Crowdability.com
