I’ve been thinking a lot about what it all means. What are the outcomes? What are the outcomes of those outcomes... and the outcomes of those outcomes? How do you prepare for the future when everything is simultaneously connected and in motion?
The economic headlines are grim. As companies and banks start reporting their quarterly earnings this week, we’ll start to see just how bad it is. But no doubt it’ll turn up the volume on the debate about “re-opening” the economy. The IMF is predicting the worst economic downturn since the great depression. Their figures estimate a 3% contraction globally vs. the .1% contraction we saw during the great recession. But is any of this information helpful? My anxiety was already purdy high, thank you very much.
Which is to say, instead of feeling deflated or freaked out about all of the momentary doom and gloom, I think we should all pay close attention to the larger themes at play and adapt accordingly. Humans are incredibly creative creatures. How you react right now, at this moment, will probably determine your long-term viability.
There’s not a ton of data out there right now to support anything more than the most obvious conclusions (yeah, airlines are going to suck wind). So a lot of this is just using logic, common sense, and a basic sense of how the economy functions. Some are from my own noggin and some are from economists, thinkers, authors, and well-researched journalists (noted herein). All of these could be wrong, but that’s the thing with times like these: you have to take your best guess and go with it. So make up your own mind and argue with me in the comments.
1) WFH is (finally) mainstream: I guess this is what it took. While the benefits of WFH to both employees and companies had already been proven beyond a reasonable doubt, the doubters were unreasonably stubborn on this one. Now that’s all changed. Big winners are people who sell both physical and digital tech that facilitates remote work and, well, grocers (the upside of homemade lunches – they’re usually healthier). Big losers are office landlords and building owners and brokers, restaurants and cafes that thrive on worker lunches, parking lot owners, office janitorial, and the like.
2) FOGO will eventually set in: The hysteria will subside, but we’ll be left with a nagging fear of going out (FOGO) until the vaccine comes out (this observation from author Mark Manson). Is that cocktail party really worth the risk? How much do you like your acquaintances... or your friends for that matter? People that’ll really be feeling this pain are working in the “get together” space (restaurants, conferences, event organizers, hotels, concerts, musicians, performers, theaters, etc.). Winners are providers of digital entertainment (see NBC’s launch today of Peacock – a really horrible name IMHO), hobby shops and suppliers, garden supplies, booksellers, cannabis sellers, Amazon, UPS, grocers, and really anyone who delivers things to your house. Side note: Hollywood can’t really shoot right now, so we’re all going to get really good at reading the subtitles in foreign movies. Or we’ll need to find a way to love WWE because, apparently, pro wrestling has been deemed an “essential business” by Florida’s Governor Ron DeSantis. Such a nut.
3) Home gyms getting pretty swole: 24 Hour Fitness is goanna die. OK. I’m exaggerating (perhaps). But they’re in serious trouble. At the same time, equipment and fitness content sellers are having a true heyday. One guy I know who runs TRX Training said his direct-to-consumer sales are 10x normal and more than makeup for the drop in sales to gyms and trainers. So winners are home gym equipment, supplies, and content to support it. The losers are gyms, their landlords, and their suppliers – especially the makers/sellers of the big gym-only machines. They’ll try to make it up through digital content, but it’ll still be a deflating period for them. Side note: I wonder how trainers are doing?
4) Advertising down, content up: Ad sales have begun to slide downhill while consumers are gobbling up the content. In digital media outlets, eyeballs are there in spades, but advertisers are bracing for the economic downturn – so they’re doing what they’ve always done (cut cut cut). Brands that lean into content that actually helps customers and navigate the crisis will get more attention. Media outlets should lean more into sponsored content, product placement, and other things that integrate more with their content (the sales/editorial may get even blurrier). Or maybe some will consider a subscription model more seriously. In any case, ad tech firms are going to start to feel the hurt.
5) Mental health is in the gutter: Kids are driving their parents to drink. Parents are driving their kids to Call of Duty. Even introverts, who were doing pretty well at first, are now yearning for a good night out with a friend. It’s mayhem. So health tech that helps with the crazy is going to do just great. Therapists are learning to deliver their counseling on the interwebs and that’s going... not that great from what I hear. Also, people might see therapy as more of a nice to have than a must-have. That said, due to the added stress and confinement (and oh my god will you please go to another room ffs) more people are experiencing the kinds of issues that might necessitate seeing... someone - even if that someone is staring at you through a computer window. Question: does that someone need to be charging $180/hr now? Let’s talk it out.
6) I’m learning how to make bread and cheese. And you?: Outside = bad. So I guess I’ll learn to draw. Brew a hazy IPA. Play the mandolin. Or knit a scarf out of pink-dyed alligator skin (please don’t do that). Whatever it is, the industries that support our sequester-friendly hobbies by providing supplies and know-how are probably going to do pretty well. Personally, I think we should all learn how to grow food.
7) Digital is boss: Yes, big tech already ate everyone’s lunch. But now, with literally everyone 100% reliant on the internet for practically everything, companies that lagged in their digital transformation are like a sidecar on the economic motorcycle. Consumers, employees, partners… everyone is expecting easy, seamless, well-thought-out user experiences and some companies have just waited way too long to get it together. Digital excellence should now be a basic competence. If you don’t have it, you’re screwed. There, I said it. So as you look through and try to find companies to prospect, pick the ones that do digital well. Also seems that biotech, ed-tech, health-tech, fin-tech, insure-tech or really any tech that is facilitating transactions digitally, automating previously manual processes, leveraging data to do something better/smarter, or delivering a digital way to do something that’s traditionally been in-person is probably going to have a little extra bounce in their step right now.
8) Cities lose luster: Cities were already starting to air out a bit before the virus struck. But the chain of events has made remote workers all the more prevalent, which means they may not need to suffer the high cost of living in cities anymore. This could lead to a huge redistribution of wealth to suburbs, exurbs and, dare I say, banjo enclaves. Is that good or bad? I guess it depends on your perspective. And your zip code.
9) Authoritarianism wins? Boo! As much as I’d like to, it is hard to deny: the open societies that promote freedom, rugged individualism, and a distrust of government in general did less well in the age of Covid-19 than the countries (especially in Asia) where society is more closed, tightly controlled by the state, and where people have more trust in their government - or at least they don’t question it - or if they question it, they do that at night… into their pillow (observation courtesy of GZERO Media). This is difficult for me to swallow. Gulp. I don’t do well with people telling me what to do.
10) No zip lining for you! Families across the world have a basic human need to experience new cultures, relax/regroup from the stress of work/school, try fun, new activities, and drive each other insane in a completely new location. Some, like my wonderful cousins in Dubrovnik, Croatia, live in gorgeous places that depend heavily, if not entirely, on tourism. Their economies are buoyed up by cruise ship and tour-group visits and are comprised of local tours, guides, restaurants (again, uhg), museums, hotels, bed & breakfasts, gift shops, and those guys selling squishy squid-like toys that you throw against a wall and they stick (2 for 5! 2 for 5!) What will happen to these places? And I don’t even have to mention airlines.