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5 Ways the Coronavirus Crisis is Changing the World and Creating New Business Opportunities

The Chinese use two brush strokes to write the word ‘crisis.’

One brush stroke stands for danger; the other for opportunity.

In a crisis, be aware of the danger–but recognize the opportunity.

― John F. Kennedy

This week marks the end of the lockdown in Wuhan, China, nearly three months after it began. Here in Spain, and across the Mediterranean in Italy, the worst-hit countries in Europe, we appear to be passing the peak. There are signs of hope in parts of Asia and in America too.

But this crisis is still far from over. Of the more than 1.6 million known, confirmed cases in the world, only about 365,000 are listed as recovered. And experts warn that if the lockdowns are lifted now, the virus will surge again. So as the crisis rages on outside, most of us are stuck inside doing our part to stop the spread.

We are left to wonder what the world will look like when we finally re-emerge back into it. What will be the “new normal”? Which businesses and industries will be forever changed? And which new habits and behaviors that we have adopted during the crisis will stick with us long after it’s over?

Will we all go back to our football stadiums, movie theaters, and conference centers again sometime soon? Will those grandparents who ordered their groceries via an app for the first time continue to do so after the lockdowns are lifted? What new opportunities will all of these changes create?

As a strategist, it’s my job to spot such changes and opportunities, and to help my clients navigate and take advantage of them. That’s one of the reasons that I’ve spent the past few months following the crisis so closely as it unfolded in China and then around the world. During that time I have also had many conversations and “mastermind” meetings with friends, clients, and other business people about the trends, changes, and opportunities they’re experiencing and predicting in their own companies and industries. 

Those who I have spoken with are virtually unanimous in agreement that the economic crisis, societal changes, and governmental response to the coronavirus crisis will have long lasting impacts. In other words, when we do finally re-emerge from our homes, it will be to a world that is somehow different from the one we knew. Some of the businesses that have been forced to close may not re-open. Supply chains will be reevaluated. Some industries may have to rethink the way that they do business. But I believe that for every company and industry that is hurt by the crisis, there is going to be a corollary, a new opportunity that emerges.

“Panic set in across Wall Street in October 1929. Banks across the nation failed – and life savings evaporated with them – ushering in an era of cost-cutting that gripped the nation until the U.S. entered World War II. But at least seven billion-dollar families, worth a total of $31.9 billion, owe their fortunes to young businesses that started during the Great Depression. An estimated 15 million Americans were unemployed at its height, yet these families stayed out of the shanty towns by pouring their energy into businesses that started small. Many are now household names.”

Forbes

Remote Work Goes Mainstream

I read somewhere recently that the changes in response to events like this crisis are often an acceleration of the existing trends that were already underway for years. One obvious example of that is the transition to remote work. I have discussed the remote work revolution quite a bit in the past. 

Now, all but the most essential businesses are being forced to close their offices and storefronts all around the world. Those workers who can are working remotely — many of them for the first time. As a result, businesses that have resisted remote work in the past are now forced to adopt it, if only as a survival strategy. In order to do so, these businesses have to put the requisite tools in place to enable employees to be able to do their work from home.

Video conferencing services (like Zoom) are seeing record-breaking usage and revenue. I suspect that collaboration tools and software-as-a-service providers (like Slack, Asana, Trello, Basecamp, Notion, DropBox, SalesForce, Google’s gSuite, and Microsoft’s Office 365 are seeing the same too. As the world embarks on this giant remote work experiment, what new tools will we invent or discover that we’ve been missing? 

Some workers are also seeing their suspicions validated — that they can do their work just as well from home or anywhere else — and that there was never any real reason they needed to go to an office every day in the first place. How many of these workers will want to continue working remotely after the crisis passes? Will they be willing to leave their jobs and find new ones if need be to preserve this newfound freedom?

How many companies will go back to requiring everyone to work from the office once this is all over? And will those that continue to allow remote work also choose to downsize or even eliminate their offices to save money (especially if the gloomier economic forecasts prove to be correct)? What will all of this mean for commercial real estate, and for companies like WeWork?

And what about all of those millions of workers who cannot work remotely. The bartenders, waiters, cooks, dishwashers, manicurists, hair stylists, personal trainers, bell boys, flight attendants, and so many others who have been laid off or furloughed without pay? Once the crisis is over, will their former employers and jobs still be there? Even if they are, will these workers rush back to them? How many of these people will use the time at home to learn new skills or make a career change? 

Online Conferences and Trade Shows

Conferences and trade shows have been cancelled or postponed indefinitely due to the coronavirus crisis. But even after the lockdowns are lifted, businesses may be reluctant to send their people back into packed meeting rooms and convention centers, at least until we are all sure that the danger has passed. And yet, while conferences and trade shows are nowhere near as essential as hospital visits or shopping for groceries, the underlying business reasons for these events have not gone away.

In the short-term, many conferences are moving online. Long-time tech publisher and conference organizer O’Reilly has gone so far as to permanently cancel all of their in-person events, in favor of hosting them online only. Webinar platforms like Zoom, LiveStorm, ClickMeeting, and CrowdCast and remote audience participation software Inconf.tv are all poised to profit as presentations move from the stage to the screen. 

But what about all of the side conversations, sales meetings, happy hours, and dinners that normally happen alongside the official, on-stage events? Everyone I ask agrees that these ancillary activities are the real reason that they attend conferences. How will these activities happen in the era of virtual conferences?

And perhaps most pressing of all, how can we replicate the exhibit hall online? After all, those exhibitors are the largest source of revenue for many conferences. And in some industries, the expos at conferences and trade shows are the only opportunities you get to see your clients, meet new prospects, and show off your latest products. How can all of that take place online? 

Creating a 3-D / VR exhibit hall that conference attendees can browse virtually seems like a clunky solution at best. Plus, how many businesspeople have or would even be willing to use the requisite hardware? At the same time, buying a digital ad to be shown on-screen during the virtual conference doesn’t really cut it either. 

There are huge opportunities here for whoever can solve these problems. 

It will be interesting to watch how Apple navigates all of this for their Worldwide Developer Conference (WWDC) in June. WWDC is one of the biggest events of the year on the tech industry calendar. It normally takes place in San Jose, California, with a sold out audience of over 5,000 people. This year Apple has announced a new online-only format in response to the coronavirus crisis. Maybe they will unveil some new tools or establish best practices for running these kinds of events. 

Online Education

The current crisis has also forced the closure of schools around the world. Some schools and school districts have already announced that they will not reopen before the summer break. In the interim, teachers and students are getting a crash course in distance learning and online education. School districts are rushing to implement new policies and tools to make that possible. 

Families started having morning meetings to plan their days around each person’s classes, calls, and Zoom meetings. Even kindergarten classes are meeting online via Zoom. Most parents will probably breathe a sigh of relief when schools reopen and relieve them from the added strain of caring for children while working from home. But some parents have said that they welcome the change and plan to continue to home school or “unschool” their children after the pandemic passes.

One obvious opportunity is to create more purpose-built tools for K-12 educators and students, (especially younger students) to facilitate learning from home. With those kinds of tools in place, it’s not hard to imagine “snow days” becoming “school from home days” in the near future.

Colleges and universities on the other hand already have infrastructure in place (or at least lots of options for tools) to run online courses. But the disruption to these institutions could be one of the greatest long-term impacts of the crisis. For years people like Peter Thiel (and myself) have argued that college is a waste of time and money, or at best, that it’s only suitable for some people. After all, in the internet age, information is supposed to be free.

And it is free. Not just Wikipedia and YouTube. Online education platforms Coursera and EdX offer thousands of courses from the likes of Harvard, MIT, Stanford, Berkeley, and Imperial College London, many of them for free. So why do we still pay tens of thousands of dollars per student per year for an education?

Especially considering that most of that money is borrowed from banks in the form of student loans. The average student loan borrower graduates college with nearly $30,000 in student loan debt. These loans, most of which cannot be discharged by bankruptcy, now total 1.6 trillion dollars in the United States (more than all of the credit card debt or auto loan debt).

It all adds up to a debt bubble that some people believe is long overdue to burst. In 2019, when the economy was flying at all time highs, 20% of borrowers were behind with their student loan payments, and more than 5 million student loan debtors had already defaulted. Again, that was all when the economy was soaring. In the last three weeks, more than 16 million Americans have filed for unemployment. The previous record high for one week was about 670,000 people.

Our parents and guidance counselors taught us that you need a university education to get a good job. But that’s not as true as it used to be. Google found little or no correlation between their employees’ prior educational performance and their actual job performance (Google doesn’t care where you went to college).

The Occupy Wall Street movement was partly a reaction to the fact that so many graduates, saddled with all that student loan debt, couldn’t find the high paying jobs that they believe they were promised (or any jobs at all).

Unlike trade schools, the purpose of going to a university was never supposed to be just to get a job. Instead, universities are supposed to be places where young people go to get a well-rounded education and introduction into the adult world. That means not just books and classrooms, but also football games, fraternities, student unions, making new friends, and having enlightening experiences. All of the things that are currently on hiatus.

Until the universities reopen, students are left paying all that money for what looks and feels a lot like watching YouTube. How long will they stand for it? Could the coronavirus crisis be the pin that finally pops the higher education bubble? Especially considering what sort of job prospects are facing the graduating class of 2020.

Universities earn their reputations by being hard to get into. But unlike the Lambda School, traditional universities have little skin in the game when it comes to student outcomes. Lamba is one of several online education startups that focuses on preparing students for in-demand technology jobs. It’s easy to see the appeal of their offer.

Delivery Apps and Dark Kitchens

Having spent a good chunk of the last seven years traveling and living outside the United States, whenever I come back home I always keep an eye out to see, what’s changed? On one trip home I noticed that suddenly, everyone seemed to be walking around wearing a pair of Apple’s AirPods (they hadn’t caught on overseas yet). On my most recent trip back, it was the rise of app-based food delivery services that stood out. 

These services — GrubHub, DoorDash, Postmates, UberEats, and all the others like them — have been around for years. But when I was home this past December, it seemed like everyone was using them much more than I remembered. The market for these services was $82 billion in 2018, but by 2025 it is projected to reach $200 billion

Of course, those projections don’t take into consideration the effects of the current crisis. With billions of people around the world forced to stay home, delivery services have gone from convenience to life line. How many new users must have downloaded these apps and placed their first orders in the past few weeks? How many of those people will continue to use the apps once restaurants reopen?

As for the restaurants, they are among the businesses most affected by the crisis. The National Restaurant Association called the impact “devastating”. In three weeks American restaurants have shed 3 million jobs. With revenue losses for the industry in March and April projected to be around $100 billion, many restaurants will not survive. For those restaurants that have managed to stay open, delivery and take out are their only options for serving customers.

What sort of impact will all of this have on the future of the industry? 

Most restaurants, even those that offer take out and delivery, are designed around customers dining in. It’s not uncommon for restaurateurs to spend millions of dollars building out their spaces. The goal is not just to create a great dining room experience, but also to attract the attention of people passing by. 

If delivery apps become our primary interface for discovering and ordering from restaurants, that will change everything.  

It’s kind of like what app stores did for software developers . By handling lots of the logistics, including payment processing, and bringing a captive audience, the app stores reduced the scope of a developer’s work to simply making great apps that get 5 star reviews. 

The same is already happening in the restaurant industry. So-called “dark kitchens” have begun sprouting up in and around big cities where delivery apps are popular. These dark kitchens are delivery-only restaurants that exist primarily to serve diners ordering via delivery apps. As such, they are able run much leaner than a traditional restaurant, which is sure to be a huge competitive advantage in light of the restaurant apocalypse feared by the industry. 

eSports Merge with Professional Sports

What happens when Fortnite meets football? Will the arcade game top score screen become the new Olympic medal chart?

The merger of eSports and traditional, professional sports is one of the most interesting emerging effects of the crisis. Like the other trends mentioned above, it is the result of a perfect storm of sudden shocks caused by this crisis intersecting with and accelerating trends that were already happening gradually over several years.

In my earlier post about the coronavirus crisis on March 9, I said that sporting events would soon be canceled. It happened even faster than I expected. The NBA called off the entire season just a few days later. All of the other major sports leagues soon followed suit. The 2020 Olympics and Wimbledon have since been cancelled or postponed as well, both for the first time since WWII. 

At the same time, gyms are closed. Fitness classes are cancelled. Even outdoor exercise is banned in some places. All of our fitness routines have been disrupted. Professional athletes are struggling to keep up their training regimes.

As a result, everyone is stuck at home looking for entertainment and new ways to workout.

Somewhere between my childhood in the 80’s and 90’s and now, video games went mainstream. I remember being surprised when first I realized that popular games like GTA V grossed more than the top Hollywood blockbuster movies. Today an entire generation is growing up on Minecraft (112 million monthly active players).

Online gaming is now a spectator sport. In 2014 Amazon bought Twitch, a website where people watch each other play video games, for nearly a billion dollars. Five years later in 2019, viewers watched a total of 660 billion minutes of streaming video on Twitch and countless more on YouTube. 

Gamers all over the world compete in and watch each other play games like Dota 2, PUBG, and Fortnite. These games are serious business. The statistics on Fortnite alone are staggering — over 300 million players in total, up to 10 million of whom are online at once, and annual revenue in the billions. 

Professional gamers compete in tournaments for prize money totalling hundreds of millions of dollars. And just like professional athletes, the most successful eSports stars earn even more from endorsements than they do from playing. 

Over the past decade or so, while gaming has been morphing into eSports, sports have been becoming gamified. Our Fitbits and Apple Watches blink and buzz to reward us for hitting our daily fitness goals. And remember Wii Sports and Wii Fit? Not quite strenuous exercise, but still groundbreaking.

After hearing for years that virtual reality was “just around the corner”, the Nintendo Wii was the first time that most of us experienced our movements in the real world affecting the action on the screen. As a result, Wii Sports attracted and entertained millions of people who don’t normally play video games.

Perhaps the notable success so far in all of this fusion of fitness and technology is Peloton. Best known for its in-home exercise bikes that feature live streaming fitness classes with celebrity-esque instructors, Peloton has a cult following and more than one million members. The bikes retail for around $2,500 plus a monthly membership fee of $39.

In many ways, cycling is the perfect platform for a digital sports revolution. It’s a popular form of exercise among the affluent and tech savvy, but the logistics can be tricky. Go play tennis for a couple of hours and at most you’ll finish the match on the opposite side of the court from where you started. But if you go cycling for a few hours, you could end up a hundred miles or kilometers away.

Of course, that’s kind of the point of cycling. Get outside. Go from place to place. See a little bit of the world from the saddle. Crush a hill. Fly down the other side. Stop for a coffee and a pastry, then do it all again in the reverse order. That’s the dream Sunday for every spandex-clad cycling enthusiast.

But every one of those miles comes with numerous hazards to health and life, from gravel to dangerous drivers. Plus, those who are serious about the sport and getting ready for their next race need to spin their wheels and train their bodies more than once per week, weather-permitting.

As popular and successful as Peloton is, it’s still no substitute for (or even suitable practice for) competitive cycling. That’s where Zwift comes in. Zwift is an online game combined with a serious training platform. Competitive cyclists connect their real bikes to smart training devices that can measure resistance and power. Their efforts in the saddle control the action on screen.

Zwift is such an effective way to train that more than half of the professional triathletes competing in last year’s IRONMAN World Championship in Kona, Hawaii are users. Canadian Pro Lionel Sanders — who came in second place in Kona in 2017 — is known for training primarily indoors on Zwift.

Life would have been very different for a lot of the kids I knew growing up if skills playing Madden or Fifa on PlayStation could have translated into success in the stadium.

Last week Sanders took part in and won the Ronde on Zwift, a virtual race where he competed against real cyclists, including Dutch pro Mathieu van der Poel. After the race, Sanders remarked, “That was the coolest experience I’ve ever had riding a bike.”

After being forced to cancel or postpone races all over the world due to the coronavirus, the IRONMAN organization just launched their own series of virtual races. The first IRONMAN VR just took place last Friday. There’s even talk that performance in the virtual races could be used to help determine which athletes qualify for the extremely sought-after IRONMAN 70.3 World Championship slots. 

Meanwhile in auto racing, The Verge recently reported that pro drivers are competing with gamers after F1 and NASCAR canceled races. The first virtual races featuring professional drivers were a hit with fans who would otherwise have no live racing to watch. 

It’s this merging of virtual and professional sports that I find so fascinating. But is all of this just a temporary fix while we wait for the world to reopen? Or is it the inevitable new normal in our digital world?

It’s too early to say for sure, but there is one more long term trend that’s interesting to layer on here. One of the effects of technology, like social media, on popular entertainment is that it gives aspiring stars a way around the traditional gatekeepers. You don’t need to be discovered by an agent to become the next Justin Bieber or Kim Kardashian. You just need enough Instagram followers or YouTube subscribers. Lil Nas X, whose song Old Town Road broke the record for number of weeks atop the Billboard Hot 100 chart, is practically a case study in how to use social media to rise to fame

Sports remains one of the exceptions to this new rule. You still need to be scouted, drafted, and signed to have a shot. That little kid somewhere in rural Brazil or Ghana could be the most famous soccer player in the world someday, but only if he is seen by the right person at the right time and then sent somewhere like Barcelona to train.

But now, in the era of virtual races, everyone can compete against everyone else in the world, including the top professionals. Just yesterday, a 17-year old Italian high school student, Filippo Agostinacchio, won the London International Zwift pro/am race

The world is full of opportunities for those who seek them. Perhaps now more than ever.