They have enough problems with angry shareholders, employees and customers. That doesn't leave much time or money for market analysis. The big projects with market research firms get put on hold, or the final reports are ignored. In other words, no one is scanning the horizon for new competitors like you. Your startup can run under the radar screen for a long time, growing in strength, hiring talent, perfecting prototypes and running alpha and beta tests . . . and only surfacing at the last, best moment.
Every startup makes mistakes, often disastrous ones.
The advantage of making those mistakes during a recession is that no one's watching. Right now, nobody's looking. As I said above, when bad times hit, companies tend to lay off good people with bad. And even those left behind, like the lab genius whose new project has just been cancelled or the killer sales guy whose region has been reorganized, are often frustrated and looking for new excitement. Take the best people you can get from anywhere you can, give them lots of stock and move fast.