As you are probably very well aware, the Dow Jones Industrial Average has been incredibly unstable since the beginning of March, causing concerns of a longer market downturn or recession. IT spend for 2020 is accordingly expected to drop. This certainly spells doom for startups across the board, as businesses cut back on spending and focus on stability through uncertain times.

Or does it?

Undeniably, a recession is bad for business, especially businesses that don’t have a secure customer base like startups. However, from the aftermath of the 2008 stock market plunge we can see that a down-trending market creates opportunity for a particular type of startup: those offering enterprise software.

Traditional enterprise platforms are often unwieldy — by necessity, due to the complexity and variety of interactions that they must handle for organizations of that size. On-boarding takes months, with intensive customization and training for staff, and then a close watch for months afterwards as new problems bubble to the surface after the platforms come online. The process requires incredible planning and coordination, resulting in countless meetings and man-hours consumed. Even once they are in place, adding or changing features can be similarly herculean, placing a high price on maintaining a competitive edge.

And a competitive edge is critical, especially in a slowing market. Companies may not want to invest in entirely new platforms as they lean down, but they need to remain innovative and advance their market position. So how do they wring the maximum value out of the systems that they already have in place?

Enter enterprise startups. Enterprise startups offer competitive technological solutions at a fraction of the cost and with much fewer strings. Their products can add new functionalities, more efficiency, and greater visibility to existing systems with faster implementation and lower time investment than the legacy providers, at a time when time and money are at their most precious. This has already played out once before in 2008, with Wall Street firms meeting with hordes of startups to augment their tech stacks.

While we can look at 2008 for perspective, there are at least two ways in which 2020 will offer its own unique opportunities. Firstly, the market instability was kicked off by the spread of the COVID-19 virus, which has led to closed borders, shuttered offices, and work-from-home orders across the globe. Many companies have the infrastructure already in place to transition to 100% remote arrangements, but many do not, or have half measures in place. These organizations will be searching for easily on-boardable solutions and discovering new shortcomings in their current capabilities in the coming months, creating an environment ripe for innovative entrepreneurs. Even after the health crisis passes, many companies may find advantage in the savings provided by remote work, sustaining the market for the required tools.

Secondly, while the stock market has been capturing the headlines, anyone working near operations knows that supply chains have taken a beating in 2020. Air freight costs are soaring, COVID-19 containment measures tanked ocean freight traffic weeks ago and are causing issues with vessel service, and demand is increasingly uncertain, placing resilience in the spotlight as a key attribute of the modern supply chain. With supply chains increasingly recognized as a key driver of competitive advantage, forward-thinking organizations will be hungry for new approaches that will give them the leg up. Increases in transport reliability, improvements to supplier networks, and enhancements to the quality of data collected from the supply chain are all things that enterprise startups can provide, with much greater agility than legacy platforms.

Uncertainty is a tricky thing to navigate, and so far, 2020 has ratcheted up the uncertainty with every passing day. But with the right approach, uncertainty can lead to just as much opportunity.