The New World
As lockdowns lessen in the coming weeks, we’ll be opening the doors to World 2.0. The New World should look quite different, a difference that provides pockets of air that can be filled by new companies and founders.
Before we dig into the changes, a few principles might guide thinking:
- A recession is inevitable. We’re using every financial drug we have to keep the market afloat. At some point coffee just stops working, the tide will come in, and we’ll realize that with 30% unemployment we can’t sustain the same level of growth.
- A vaccine is in the indefinite future. We get coronaviruses all the time: it’s called the common cold. We don’t have vaccines for those. It’s hard. While our scientists work on creating the impossible, the purgatory in-between state will force lifestyle changes.
- Nature forced a giant experiment. Businesses just spent several weeks working fully remotely. In many areas this was a burden, but in others many realized it was just as good, if not better.
- If the World 2.0 alternative is equal, superior, and legal… behavior will permanently change.
If you play that forward, I think you end up with a few things:
- Handshakes die. This might happen within families, but I’d doubt you’ll do it with strangers.
- Movie theatres die and are reborn online. Can movie theatres, which were dying even before the virus, afford retrofit to spread out the seats with less density? Plus there are great online alternatives for this already.
- Concerts stop and are reborn online. Seems like it’ll be a very long time before we can do mass gatherings again. There aren’t great alternatives (yet!), so my bet is this happens illicitly a few times, new outbreaks emerge, and then regulators clamp down.
- The (temporary) end of cities. We might see a temporary exodus to the suburbs until there’s a vaccine. A few realtors have told me interest in SF apartments is down while suburban homes are up.
- Trust. Suddenly all humans are suspect of carrying biological weapons. How do you feel when you see a stranger on the street today? The virus increases trust between smaller groups, decreases it towards strangers.
- Corporate travel turns into Zoom. A few companies are realizing they can get deals done over Zoom. I’d imagine we see softness in spend here as managers look to trim any cost centers during a recession market.
- Reduced personal travel. More likely powered by a recession than fear.
- Digital corporate events. I’ve seen three cases of business that had various corporate events scheduled during the past few weeks. In all of them, managers have realized Zoom might be “good enough” and are scaling back spend in this area. This is especially true if the event is an attributable profit center (e.g. sales conference), and the test returned positive results.
- People form kibbutzes. As Wave 2 and 3 cause flare-ups in different regions, I’d imagine groups of people will commit to co-quarenting together, all establishing the same trust protocol. This happens organically with roommates and families, and I’d imagine it will just get extended broadly. Companies might even encourage co-workers to co-quarantine as a way of managing the return to work process.
- Open office plans become unpopular. Both because the density of an open office plan won’t be suitable for social distancing and people will have realized from their WFH experiment that there’s value in having a door you can close.
- Public transit is seen as dangerous. World 2.0 doesn’t like human density. And nothing is as dense as a rush-hour subway. Some cities need urban transit to thrive, and in those metros I think we’ll either see very rigid enforcement (Taiwan) or mass infection and subsequent herd immunity (NYC). Maybe this is a boon for Uber.
- Restaurants and digital restaurants. Taverns have been in human culture for thousands of years, so they’ll come back. Questions remain on how you’d profitably run this business with less density to suit new distancing requirements. Since the cook-at-home alternative isn’t as satisfying, this could be another area where we see new products and creativity.
- Schools return, with it supercharged online education. Parents will demand it, rightfully so. It’s quite possible college campuses are the safest way to resume life. You want to centralize all the youth together, away from the elderly, since they are mostly immune to the virus. New digital alternatives should emerge too. It’s extremely unlikely that attending school over Zoom is the best we can do.
- Live sports 2.0. Like restaurants, the alternative just isn’t as good. It’ll be very interesting to see how playing without physically present fans affects the biological performance of athletes.
This might be the most volatile time in human history. Never before has the entire world changed behavior overnight. This dynamism creates real opportunity for startups, as they’re able to adopt faster than incumbents.
For every behavior shift where the alternative isn’t as good, there’s a company to be built! People want concerts now but nature won’t allow it. What’s the digital alternative? Restaurants might struggle to stay in business with social distancing laws. What are the online restaurants? What’s the new Zoom, an enterprise Snapchat that helps leads close sales? As Nat Friedman says, “video conferencing is a horseless carriage”.
A silver lining in the otherwise devastating story of COVID-19 is that it woke us up from our Great Nap. World 1.0 was calcifying, and nature just shattered the glass. We now have to rebuild anew.