Eduardo Saverin on Why the Best Companies Come Out of Downturns

  • Facebook cofounder Eduardo Saverin says the best companies come out of times of economic downturn.
  • “Periods like these breed entrepreneurs that are grown up with capital constraints as part of their initial DNA,” he said during an event.
  • Saverin pointed to examples like Apple, Microsoft, Alibaba, Facebook, Uber, and Airbnb.

Facebook cofounder Eduardo Saverin believes that the best companies and entrepreneurs come out of periods of downturn and volatility.

“Periods like these breed entrepreneurs that are grown up with capital constraints as part of their initial DNA, where they understand that they need to build true mission-critical products — not products they claim are mission critical, but products that genuinely people need,” said Saverin.

Saverin — currently co-CEO of venture capital firm B Capital Group — made these comments on Friday at the 10th Milken Institute Asia Summit in Singapore.

He cited the examples of Apple, Microsoft, Alibaba, Facebook, Uber, and Airbnb, and said the best companies emerge from “not great” periods in the market.

In contrast to these periods, he added, “When I think of bull cycles, everyone is greedy, and really, we think we’re better investors than we are because everything’s just going up.”

To add context to Saverin’s perspective, tech giants Microsoft and Apple emerged in the 1970s amid stagflation —  a time marked by stagnant economic growth, high inflation, and a surge in unemployment.

Meanwhile, Airbnb and Uber emerged during the Great Recession of 2007-2009, which marked the longest economic downturn since World War II. During this time, the S&P 500 fell 57% from its peak in October 2007 to its lowest point in March 2009, per the Federal Reserve.

And Jack Ma, along with 17 others, founded Alibaba a year before the dot-com bubble burst in 2000.

In contrast, Facebook — now known as Meta — was founded in 2004, between the dot-com crash and the Great Recession.

The company was cofounded by Saverin, along with Mark Zuckerberg, Dustin Moskovitz, Chris Hughes, and Andrew McCollum. Zuckerberg diluting Saverin’s Facebook shares and booting him from the company in 2005 formed the central plot of the 2012 film, “The Social Network.”

In 2012, Insider published the email exchanges leading up to the event.

Since his departure from Facebook, Saverin cofounded B Capital Group in 2020. Saverin’s current net worth is estimated to be $17 billion by the Bloomberg Billionaires Index.

Saverin did not immediately respond to a request for comment from Insider.

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