[nostrademons]

The last downturn also saw some companies flourish that made stuff nobody would think of as "really wanting", though. HotOrNot, LiveJournal, FuckedCompany, Blogger, Del.icio.us.

I think the biggest predictor of success during a bust tends to be low costs. Recessions force honesty on business people: you are economically viable if you contribute more value (actual value, not predicted value) than you consume in resources. It's relatively easy for one guy working out of his home to produce more value than he consumes. If his product is at all useful, he's basically got it covered. It's relatively difficult for a startup with $20M of financing to produce more than it consumes, because his product has to be roughly 200 times more useful than the solo entrepreneur.