There's a lot of speculation (that's all you can really do) about what our world is going to look like on the other side of this pandemic.
I think it's easy to overreach at a time like this and prognosticate dramatic change -- such as the demise of cities and urbanity as we know it. But while I do believe that there are bound to be changes, I also know that after 9/11 most of us eventually stopped being afraid of flying and of being in tall buildings. We forgot and moved on.
So, what might change?
Scott Galloway argued on his blog today that "things won't change as much as they will accelerate." In other words, this pandemic is simply going to make the future happen faster. And one of those things is going to be a faster shift to online for higher education. It is untenable for education costs to continue increasing at the pace that they have been.
In this recent Intelligencer interview with Chamath Palihapitiya, he puts forward the idea that medical data might start to be used publicly. Meaning that, after this is all done, we might be willing to give up a certain amount of our personal freedom in exchange for knowing whether we're in a restaurant with someone who is shedding a communicable disease.
And finally, Richard Florida recently published this online talk about how cities can bounce back from COVID-19. In it, he argues that, yes, cities will survive and that it could actually reinforce the "winner-take-all urbanism" that we have already been seeing.
This, of course, is really just the start of the conversation.
Software businesses are generally high margin businesses. But along with this feature comes some risks. Here's an excerpt from a recent post by Scott Galloway (which is actually about FedEx):
With any software start-up, there is a non-zero probability that you wake up the next day and find that a better-resourced firm (Microsoft, Oracle, Salesforce, Adobe) has deployed 200 engineers to copy your product, bundle it with their stack for free, or near free, and … welcome to zero. I believe this is happening to Slack, but more slowly than Netscape, as Microsoft’s General Counsel has likely coached Satya to charge a nominal fee for Teams and let Slack bleed out, instead of putting a bullet in its head and stirring the DOJ from a 3-Ambien slumber.
Real estate, by comparison, doesn't get disrupted in quite the same way. A location/city can lose its economic purpose (Great Grimsby is just one example), but as long as there are growth tailwinds the real estate should do well.
Venture capitalist Fred Wilson has on many occasions written about how he (and his firm) made a fortune in the dot-com era, only to lose it all and have to remake it again over the subsequent decades.
One the lessons learned from that experience (according to his blog), was to take some of that second tech fortune and invest it into hard assets -- namely real estate. That feels right to me.
This is an excellent talk by NYU professor Scott Galloway about Amazon, online grocery, and many other aspects of the retail landscape. The bits about Amazon’s scale and reach are fascinating. There is about 30 minutes of him speaking quickly and then another 15 minutes of Q&A. If you can’t see it below, click here.
[youtube https://www.youtube.com/watch?v=_HyiY_m_YxI&w=560&h=315]