Our world will change forever as we finally exit the nightmare of COVID-19. This grand experiment in isolation will open a bit in a matter of weeks. 4 or maybe 8…but the end will come, even if in phases, during May through August. May this virus die and rot in hell. (9/21 — note I was wrong here as this came back many more times even though it waned between peaks).
It will, but we will live differently in its aftermath. As a sometimes futurist fortune teller soothsayer, I get to prognosticate about the future with my live audiences from the stage. We won’t know how many of these forecasts I’ll get right (maybe none!), but I hope it will spur conversation between you and others. Because that’s the point. And its going to be a really great world, just a little different! And at first the return to normalcy will be anything but. Masks and testing and tracking will abound until we have a vaccine or a cure. And we will have one or both perhaps in 2021. Ands perhaps this virus will mutate like the Spanish Flu did into one that doesn't kill its host (since survival of the fittest demands that the host live, so mutations who dont kill their host or even are asymptomatic mutations spread the longest).
Yet life will return and we will learn to accept some risk.
So take a moment and enjoy this romp into the future. And think about your own ideas as we each can ponder our own future.
In no particular order: What’s down and what’s up in our post-Covid world?
Movie Theaters: DOWN
Theater attendance may never return to the record levels of 2019. Studios have been forced to test out direct to consumer models at $19.95 per ticket. Given that a studio received perhaps $6/ticket from a theater showing, a direct to consumer model, if well promoted, could boost studio revenues. Something the theater owners have dreaded for years.
Why? Because you will have watched all that interests you during the shelter in place. It will bore you going forward. And Netflix, after years of near monopoly, faces huge competition from dozens of well funded networks. It will be hard for them to return to the glory days, even as a very well run company.
Amazon: UP (way up)
Obvious. Double obvious.
Obvious. Despite some Zoombombing hiccups, its easy to use, works well for business meetings, and even grandma likes it.
Market will be closed for 2020 but come roaring back in 2021.
Venture Capital: DOWN
Who wants to make a capital call this year? No one. Plus no exits in site and very overpriced rounds. We have seen this one play out before. It ends badly. Look for a rebound in 2021 and beyond.
Transportation and traffic: DOWN
Mass transit and roads will see less traffic for years and maybe forever. While not everyone will work from home, some are finding it more productive and will find ways to incorporate it more than before. Perhaps lessening traffic by 10%. Which in some areas could reduce commute times by 30% or more.
People had to use it during the shutdown for exercise and sanity. And it will stick with some.
Yes, its way up right now. Mad rush to get one. But the fitness craze always is boom followed by bust. People do it for a while, then fall out of it, then sell it on eBay for 30% of what they paid. When the market is flooded with used ones, Peloton won’t sell many new ones. And with a market cap of $8B, there is only one way to go. By late 2021 this will look like GPRO which topped out at $63 and now trades for less than $3.
Working from home: UP
The grand experiment made is get our home office act in line. And now we are setup and rocking. This method of working will become much more normal and accepted. Companies will see the increased productivity and lower costs by allowing some workers to work from home some or all of the time. Some percentage will never return full time to an office. One big driver is that the technology is substantially better than 2001, the last time we all stayed home for days or even a few weeks. Zoom and MSFT TEAMS in 2020 works a lot better than Skype in 2001. So much so, it’s now actually functional and usable by almost anyone. No IT person needed.
Retail brick and mortar shopping: DOWN
The grand experiment forced the final holdouts to buy everything online. Physical retail, already in trouble, will never recover fully. The US had too much square footage of retail already. This will force the balancing act to play out faster. Many smaller stores and weak ones will shutter forever.
Amazon is hiring 175,000 people for its warehouses. That’s all you need to know. The grand experiment showed that people can indeed live off of ecommerce fully. And it’s a good, if not great, experience.
Commercial Real Estate: DOWN
All companies will delay footprint expansion and first turn to working from home and shared cubes in office (ie some days in and some days home). This will lower their real estate needs, and costs, by 20% to 50%. Most companies will never return to “everyone in the office with a 100% dedicated seat.”
Business Travel: DOWN
Zoom works so well, we are conducting client and internal meetings now every day. Two people to 200 people, it works, and we have the home bandwidth to support it. Companies will immediately slash travel budgets by 20% to 50% and begin to ask “can this be done over Zoom” for every travel request. We will find the answer is “yes” 50% of the time.
At first we will all run back to restaurants. But many people, who have not cooked a meal in years, have had to learn how to make food. 3X a day. Some of that will work its way back into our kitchens, with renewed interest in recipes and meal planning and healthy eating.
Local Grocery shopping: DOWN
Online Grocery shopping: UP
The grand experiment made everyone try grocery deliveries. And for the most part, if you can find a slot, it works great. Fast and cheap. Time efficient. While many will go back to local shopping, 20% or more will do much of their weekly grocery shopping online with deliveries. They will never switch back in total.
It always bounces back. Always. Yes some people will leave, and others will flock in to take their place.
It’s not good but there is no question happy hour is coming earlier each day. In our post-Covid world, we will back off and leave this to after work, but instead of drinking too much might savor the new recipes we learned when we were homebound. Like the thrill of making a great martini (or quarantini). It’s not about the booze, it’s about the grandeur of putting real thought into small things to enjoy.
We have all found new and old hobbies which bring us joy. Some of us will continue to grow them.
As everyone is finding trees are fantastic. Trails are the new cheap getaway that gets your 10,000 steps a day. And fresh air.
Once people have figured out how to work from home, they don’t need WeWork. There is no path to profitability anyway. Yes, it ate billions and ate up huge swaths of real estate (and leased it to others for less than it paid) but this thing needs to just die. And it will, quickly, in a huge smoldering mess.
The startup economy had been faltering in the past two years as engineers and others flock to Apple, Google, Facebook, Amazon and other large growing companies for better pay and a more stable environment. Now as perhaps 1M+ startup workers face layoffs, and leaving their stock options on the table as they leave, there will be no rush to return to the high risk world of startups. Pay is low, hours are high, and the stock rarely pays off. The bloom is off this rose for now.
Experiences will become very attractive once things recover. After being cooped up in the house for weeks, traveling and experiencing the world will be the guilty pleasure we all want. Some areas (China perhaps) may not call to as many people as a vacation hotspot post-COVID. But we will cherish trips and plan them in great detail. Zoom just isn’t the same as a trip to Africa. Even with some risk, we will take it.
While large cruises with thousands of passengers were the core of many COVID outbreaks, people will eventually go back to cruising. They did after 9/11 but it took time. It will be several years before the industry hits record highs again. But they will since its the cheapest all-inclusive vacation a family or couple can buy. In the meantime, smaller ships will have more appeal, while larger ones will discount prices to fill rooms.
The world must now reckon with the fact that many viruses over the past 100 years originated in China. Eating bats and pangolin and lack of safe food handling procedures common in the west are among some of the areas that could be improved. The world may demand that china aggressively improve its food handling and prep rules. The cost of another virus originating there, or anywhere, is just too high. This is not a critique of the Chinese people, but of government regulations. No one does that better than China…and now is the time.
A larger impact is that China is the worlds manufacturer. Essentially a single source country. Companies are learning (first from the tariff spat and later from COVID) that this is not a smart choice. Whether it’s China or any other single source, this has too much risk and having second source countries will become the norm.
People will be dying to get out and have someone else cook and clean for them! However many small local eateries will never open again. These places live month to month with little savings for a rough patch. COVID will have killed them. The survivors will be stronger and serve more meals per day than they ever have. At first might be with limited seating, but in time the pairing of low performers will be a good thing for profits and growth of strong establishments.
Unemployment will peak above 20% in May, and perhaps hit 30%. It will recover to 5% but take 24 months to get there. The economy and companies will be stronger afterwards since the weak will have closed up shop in 2020.
Business travel: DOWN
Companies will learn that most meetings can be done without getting on an airplane. Its cheaper and a better use of time. Business travel will not return to prior levels for a decade or more.
Zoom is cheaper for business. While recreational travel will increase business travel may never recover.
The company is a complete mess. 737MAX’s are down and out. Before COVID they had over 5000 orders. After COVID cancellations, I suspect the backlog will fall to near zero. With reduced need for air travel most airlines will cancel their 737MAX orders. Before COVID they were begging to get theirs first. The system was at capacity. Now, no one will want them, and many orders will be cancellable without penalty given Boeings long delays. They already have 400 built and ready for delivery once cleared. Who will want them? No one. Airlines will want to hang on to their cash or credit instead and not buy a new plane for a long time.
Consumer demand will be down for some time until their savings catches up. Maybe 2–3 years.
Onshoring leads to (anmd needs) state of the art automation. As businesses have learned, people on a line can get sick or be quarantined, shutting a plant. But fully automated plants are still running, making goods every day. Companies will push for fully automated plants that can run for a long time with few people. Automation is now cheaper than offshore labor in many industries. So bringing back manufacturing, while it wont bring back the same jobs that were lost 20 years ago, is now possible and likely with robots and automation. Lowering costs for consumers and solidifying supply chains with onshore capacity.
Remote monitoring will be the new norm as robots are immune — and continue to operate 24/7/365 even during a pandemic. Companies like KnightScope will take center stage as their robots replace humans and can keep going even in a pandemic.
Remote Doctors: UP
Many family doctors are seeing patients only remotely over video. While scorned by the community for years, it turns out that for many ailments this is completely useful, a better use of time, and reimbursable. Many doctors may end up having in office hours and on some days video hours. And when possible we will book the video hours as it doesn’t require us to drive to a doctors office, wait for 30min, see them, and later drive home. Eating two hours. Taking two hours to 20min will be a huge win. And we may actually see the doctor more often when we can do so without eating up two hours.
It used to be laughable when someone wiped down their airline seat. Now we will see them as smart, not crazy. Same with washing hands vigorously. We learned it can make the difference between life and death. We won’t easily forget. And we will naturally don masks on planes especially international flights.
The Flu: DOWN
All the isolation and cleanliness will result in a substantial reduction of this flu season. And next season, more will get the vaccine, wash hands, wear masks. The result might cut flu cases and deaths in half (up to 61,000 Americans die annually from the flu). We will use what we learned more often than not.
Oil prices: DOWN
Oil has collapsed to ~$20/barrel as of today. The worldwide demand may have fallen by 50% or more temporarily as people stay home. 20% of that reduction may be permanent. Given that producers don’t want to cut output and lose share this is a race to the bottom. The production cost in Saudi Arabia is the lowest in the world at under $9/barrel. So, oil could reach $10/barrel just to kill of some capacity in other countries. Taxes aside, a $10/barrel price amounts to gas under $1/gallon.
Weak startups (like OneWeb): DOWN
OneWeb spent over $3B launching satellites to provide internet service to consumers in poor countries. Those who do not own smartphones. After launching the satellites and spending all its money, it realized that people who do not own smartphones in poor countries don’t have any devices and can’t afford to pay OneWeb for their service. A good rule in business is sell to people who can afford to pay. While the service is wonderful for humanity, it may belong in a nonprofit. This is only one example of hundreds of well-funded startups that never had a legitimate path to profitability. The IPO market is closed. Investors are making lists of the strong companies they will support (maybe 30% of their portfolio) and the weak ones that should die. Death would have come anyway but would have taken longer. This will be a great cleaning house of the hundreds of unicorns that are actually worthless.
Small business: DOWN
Few have the cash to weather this storm. A sad day, but even a government bailout won’t keep the weaker ones afloat.
People don’t give in down markets and for many their revenue dried up to zero during the closure. Many will not survive. All have cut staff. Sad.
Upwards of 200 are in some phase of moving to testing including a new class based on RNA. We will have one or more that work sometime in 2021 available widely in the USA. By 2022 worldwide. After which it will just be bundled with the annual flu vaccine.
Some will show promise in some patients by May or June by reducing the fatality rate. Though the IFR (infection fatality rate) is likely to end up around 0.3%, most people have no symptoms yet spread the virus anyway. We will find that population density matters most (think NYC), the virus can spread through HVAC, thus a large apartment building might infect all, and that some distancing, vigorous cleaning and masks become normal and accepted.
Oh, and no hugs or hand shakes. Probably taboo for years.
Future preparedness: UP
Americans will demand it as will others. The world responded to COVID very rapidly compared to H1N1, Swine flu and AIDS. But 18 months to a vaccine won’t be tolerated in the future given the cost of shutting down the world will exceed $15T. In the future we will have in place methods to evaluate and ramp in under six months from sequencing the virus. And more efforts will be placed on broad spectrum anti-viral medications, which we have few of.
Social media: Neutral
Usage is way up but ads are way down. It will balance out over 1–2 years, but people are tiring of Facebook and may use it less after this ends.
Phone calls: UP
People who never answered their phones are now excited when it rings. Just to hear another voice. Like voice calls were all of a sudden a new invention. We will rediscover the power of voice over texting and short emails. And cherish that call from a friend.
The two sides of this story are 1) people are dying for sports to come back and will flock to it in droves or 2) They realize it’s a huge time and money suck and exposes you to 100,000 others in a stadium.
My bet is that overall sports attendance and television ratings fall by 20% once sports is back, and never recovers. Humans have found many other things to occupy their time which turn out to be more interesting. And no one really loved the 100,000 seat stadium. Especially in the age of pandemics. Just not worth it.
Live entertainment: NEUTRAL
People will want to get back to concerts. But not so fast. Huge crowds and prices through the roof. This will take some time. Maybe 2022.
Residential Real Estate: UP
Prices will be down at first but demand for a quality living space (ie larger home) will be up for the foreseeable future. As people spend more time in their homes or apartments with kids and spouses, they begin to value distance within a home. Larger homes may come back in style after all. However some sectors, like condo’s in Manhattan, will be on the outs. People will value that home away from all the madness of a city, especially with some days working from home. And they may see it as safer against the next pandemic.
Commercial Real Estate: DOWN
More people working from home means less office space required by companies. Companies will delay expansion and first have people share time working from home. Cutting office space needs by 20% or more.
Social media has more people sharing misinformation about COVID than real information. It seems there is no end in sight to misinformation continuing to grow.
If we tracked the movements every citizen through smartphones we would be able to slow down the virus by weeks and save lives. By knowing who you came in contact with in seconds. This will likely happen and we will accept it. It is as Big Brother as it gets…but most of us would rat5her have that than sit home for another year. At some point, we will all realize we lost our privacy around 1995 and never got it back. We won’t want another pandemic and will give up a lot to stop it.
Gig Economy: DOWN
These gigs which don’t pay all that well are now being exposed for the lack of insurance and backstops in tough times. All of a sudden, working your own hours driving for Uber doesn’t seem like a great gig.
Make things close to market. With automation. Absolutely. Cuts transport costs and time, eliminates tariffs, and it’s a great hedge against the next pandemic.
AI and RPA doesn’t get sick.
Online virtual video dating will become the norm to meetup and video date perhaps for weeks or months before meeting in person. It’s safe, efficient, fast, and even cool. Thus…more dating will occur at a faster pace.
Broadway revenues have been growing for the past decade and were set to have a record year in 2020. COVID will shutter Broadway for perhaps 12 weeks. It will take 4 more weeks to put the show back together (rehearsals and ticket sales and such). Think fall 2020. And some shows will not reopen as they didn’t have the funds to survive the closure. The rest of 2020 will play catch up. By 2021 people will again yearn for Hamilton or Diana, and will be comfortable with houses that seat 1000 people (rather than 100,000 at a stadium). And 2022 may again be a record year.
Home Remodel: UP
Now that we actually lived at home for weeks, we know what needs fixing and upgrading. And will see to it.
Higher Education: Neutral — UP for the smart ones and DOWN for others
As every university was suddenly thrust into getting every professor and course online, there is no going back. Students will surely yearn for classes back on campus as they miss their friends and live interactions. But the cost of providing the same materials online versus on campus cannot be lost. Given the drive for cutting college tuition costs, providing some semesters online is a way to cut 20% to perhaps 50% of the cost of attaining a high quality college education. This is simply more efficient than building more buildings. And professors who were formerly scared of doing it have now embraced it. They had no choice. Some of this will be true for K-12 as well. Universities who embrace online education as part of their regular degree programs with fervor will flourish. Even in a time of declining US high school enrollment. However some colleges will simply not make it throught this and will fold. With lower HS graduation numbers and far less students from overseas, there are more seats that there are students. COVID will help to balance supply and demand.
Knowledge of micro-droplet aerosols: UP
Who knew that a cough could place virus into the air out almost 30 feet and then it could linger there for up to 3 hours? We all do now. And in the future someone coughing insesently will be shunned to stay the F*** at home.
Our own stories about COVID: UP
We will tell our children and grandchildren how we survived the nightmare and how hard thigs were and how we were prisoners in our own homes. We might leave out the steak and lobster dinners we learned to make and the endless movies and working in our PJs. Through stories, this will be our Great Depression.
Dinner Parties: UP
Now that we are cooking more, and miss being with our friends, we might invite people over to show them our new skills. And exaggerate our own COVID stories over and over again.