COVID-19 has been a uniquely painful crisis. It is first and foremost a terrible tragedy for the families impacted by the disease, but in addition the ripple effects of efforts to stop the spread have been punishing on businesses and lives globally.
Even as we optimistically start to wonder about a world in which we have successfully flattened the curve and a path out of lockdown makes sense, it is still clear that things will look very different than before. Plans to ease restrictions still involve social distancing, alongside a phased return of retail, restaurants, events and travel.
Like many other firms, we have taken this time to focus on our portfolio, but even in this uncertain window have been pushing forward with in-process investments and meeting new companies. Venture capital was established to support companies as they innovate, create change and enable adaptation to changing environments. So this crisis and its cascading impact in every part of life seems a specifically important time to focus on investing in sectors creating jobs and opportunity.
We will be publishing a series of (highly speculative) thoughts on what the world might look like after all this. Below, a preview of what we’ll be posting in the next few weeks.
- Keeping Up with a Shifting Workforce
- After the last recession, a strong service economy paved a path for a rise in 1099 labor. Now, the focus of hiring has shifted from service back to warehousing, manufacturing, and delivery. Does the massive labor shift propel a renewed hunger for software that provides vocational training and empowers a hiring schema based on skills?
- The tightening job market, shifts in labor demand and a blow to physical universities could also propel an already trending appetite for online learning. Does a traditional degree give way to a lifetime of upskilling?
- The on-demand platforms that came out of the last recession developed a material class of side-hustle labor, and after COVID-19 those platforms should see sustained lift. Coupled with the impact of unemployment, could that grow a class of workers that are using platform work as their primary labor, driving reclassification of those contractors?
- Risks and costs of onsite human labor have been highlighted by COVID-19. Can this event provide necessary motivation for a number of employers to grow their appetite for AI and robotic process automation in their operations and supply chain?
- Working from Home Changes the Landscape of Cities
- Densely populated cities were already facing a crisis; COVID-19 and the remote work environment that follows could be the final straw that incentivizes higher income groups to flee major cities. How does this compound the pressure lockdowns will already inflict on city finances, and what does this mean for those left behind?
- One likely impact – home ownership in big cities should become even less practical. Could this propel a healing real estate sector to invest in democratized amenity-rich rental properties that support a new vision of “home” that blends residence and office?
- Physical Stores Change Shape, Brands Think DTC
- Should we expect shrinking retail footprint as stores close and storefronts transition from revenue drivers to marketing/distribution hubs for an omnichannel presence?
- Faced with the collapse of many retailers, and supported by a variety of end-to-end ecommerce solutions in market, do legacy brands go direct-to-consumer to survive?
- A Digital Future Challenges Legacy CPG, and Warehousing Gets a Boost
- As grocery and CPG purchasing moves online, Amazon/Walmart/the usual suspects are gaining market share over a landscape of unprepared retailers. If China’s experience post-SARS is a guide, the gap between those winners and the rest of the field will only accelerate. Will we end up with a landscape of ghost grocers, Amazon marketplace sellers and a few DTC players?
- The online path to purchase is very different than the physical one, and existing CPG brands are not positioned well for the shift. “Subscribe and save” ordering and loyalty for the major online platforms should drive gains for private label brands. How do CPG brands evolve their marketing approach to stay relevant?
- “Just in Time” supply chain strategies meant a lot of stockouts mid-crisis; in the new world, does warehousing pick up material footprint while retailers shrink their space?
- Consumption Patterns Accelerate a New Future for Sports, Audio and Film
- Closed theaters have provided the perfect window for Premium Video on Demand. Should we expect struggling theaters to be bought by streaming players?
- Shifting commutes and consumption changes audio preferences, too. Does podcasting get a boost, or does the benefit accrue to entirely new formats?
- Sports has been the glue holding together a cracking pay TV ecosystem. Does this break bring a new round of cord-cutting and accelerate a move to esports in content bundles?
- Amid the crisis, artists and event managers have been testing virtual formats; will virtual events stick, and which platform will win?
- Fintech Evolves to Face New Pressures
- Could this period accelerate neobanks as a solution for the underbanked? Will the unemployed/underemployed turn to technology for guidance?
- Should we expect collections to get smarter, and banking to go fully online?
- Will trading become America’s national pastime?
- Can this crisis drive remote financial advisory to take off?
- How will insurers adapt policies to new work/life realities?
- Contactless payments will clearly gain ground, but does this crisis finally take Bitcoin mainstream?
- But Wait, There’s More
- Will consumer legal tech finally have its moment?
- Privacy is more challenged than ever, will consumers demand control?
- Perhaps it’s finally time for subscription flight bundles?
- Will micro-luxuries emerge to replace out-of-home experiences?
- How will enterprises reorient purchasing to support work-from-home employees?
Stay tuned for our detailed views; we’ll be posting a new section every Tuesday.