GiveDirectly is delivering cash to families enrolled in SNAP (a federal nutrition assistance program) and living in the local ZIP codes most affected by COVID-19. Most recipients are single mothers. Each will receive $1K.
We call it IRL “In Real Life” in the tech sector. IRL is the opposite of the virtual reality/online worlds that we have been reading about in science fiction and slowly building over the past three decades.
I have heard a number of people assert that this pandemic, when we are staying home and working, learning, and playing online, will rapidly increase our comfort with and usage of the virtual world.
I beg to differ. I think this pandemic is showing all of us how much we crave being in real life.
After five weeks of total and complete self isolation in our home, the Gotham Gal and I started inviting another couple over for a socially distant cocktail this week. They come and go via our driveway, we sit in the back yard, separated by ten feet. I serve drinks in latex gloves. We talk. After an hour or two, they depart the same way and we wash everything up in warm soapy water and then have dinner back in our self isolation.
It has made a big difference to our frame of mind.
In person social interaction is the core of being human and I think this pandemic is reminding all of us how vitally important that is.
The tech sector will continue to build virtual worlds and online experiences. We will continue to use them, some more than others. They are valuable, efficient, convenient, and entertaining. But they can not and will not replace in real life experiences. This pandemic has shown me that in spades.
One of the most fascinating things I’ve been watching is how the 80 something USV portfolio companies are adjusting their marketing strategies during this pandemic.
It is all over the map, based on the unique situations of each and every company, with some pulling back on marketing, some accelerating it, and some keeping it more or less the same. Even the ones who are not changing marketing spend are changing their marketing mix a lot.
Digital/performance marketing, whether online or on TV (where there is a lot of targeted performance inventory now – talk to our portfolio company Simulmedia if you want to see for yourself) is really showing its stuff in this downturn as it is responsive to changing demand. Keywords/search is a great example of that. If there are fewer people searching for what you are selling, there is less spend. There are many digital/performance channels that work similarly.
Marketing costs have come down dramatically in some channels and companies are taking advantage of that to grow their customer bases and market share. But some channels have gone the other way with increased marketing costs. If you are selling something that everyone wants right now, it may cost you more to reach customers right now.
Making sense of all of this is not easy but important. You may have big opportunities that you are missing. Or you may have big problems you aren’t seeing.
Which is why I’m going to tune into this webinar by my friend David Steinberg and his friend John Sculley on Thursday at noon eastern. Full disclosure, USV is an investor in Zeta Global where David Steinberg is the CEO. I’m curious to hear about how their customers are operating in this environment and what is working and what is not.
As policy makers around the world seek to mitigate the economic shock from this pandemic, one less obvious but powerful place to look are working capital flows.
Yes we do need direct relief for small businesses like the forgivable PPP loans. We also need things like payroll tax deferrals and other relief from the CARES Act. We also need our capital markets to work so actions like the Fed is taking are necessary and important.
As Sandy Kemper, founder and CEO of our portfolio company C2FO puts it in this blog post:
The greatest financial relief we can give small and mid-sized businesses in this economic crisis is faster payment of their outstanding invoices — liquidity. The lending programs being launched by the world’s governments and central banks and directed to small and mid-sized businesses are extraordinary, needed and laudatory, but will fall short not just in terms of dollars, but more critically, they will not arrive soon enough for tens of millions of the world’s small and mid-sized businesses in dire need.
Sandy goes on to calculate that the world’s “150 million small and mid-sized businesses, employing 60% of the world’s working population and generating nearly 50% of the world’s GDP, are owed more than $16 trillion by their customers, half of which are large companies.” Sandy calls that the $16 trillion liquidity trap.
His proposed solution is:
low-cost funding specifically for larger companies to pay their small and mid-sized suppliers immediately
The 1K project was built by Alex from NYC, Minda from Seattle, and a group of over 20 volunteers consisting mostly of tech founders
This is an effort to pair people with means with individuals who have lost their jobs and need some help to get through to the other side. A supporter signs up to support one or more individuals who have recently been laid off and have been nominated by their former employer. The support is standardized at $1k per month for three months. I joined here. You can too.
If you decide to participate, you will be asked who referred you. Please say “Fred Wilson” and use this email address for me – [email protected]. That way they will be able to track the supporters who came via this blog post.
I linked to a post by Cloudflare CEO Matthew Prince the other day. In it, he wrote:
The super heroes of this crisis are clearly the medical professionals at the front lines saving people’s lives and the scientists searching for a cure. But the faithful sidekick that’s helping us get through this crisis — still connected to our friends, loved ones, and, for those of us fortunate enough to be able to continue work from home, our jobs — is the Internet.
The data is kind of incredible. My friend Paul sent me this from Akamai:
– Since the week of Feb 10th, Akamai has seen a 30% increase in traffic in four countries with early lock-downs (China, South Korea, Japan, Italy) vs. RoW.
– Since the week of March 9th as more countries implemented lock-downs, global traffic saw 30% Y/Y growth vs. 3% on average
– Peak traffic has more than doubled Y/Y to 167 Tbps.
– AKAM execs calling it the “greatest spike in Internet traffic the company has ever experienced”
I was on a Zoom yesterday and the clarity of the picture was remarkable. I thought to myself, “how are they doing this when everyone is using this service?”
And the answer, of course, is that Zoom doesn’t have to provide all of the bandwidth for their service. We all do.
Netflix doesn’t have to provide all of the bandwidth for their service. We all do.
The decentralized architecture of the internet is showing itself off right now. And it is a beautiful thing to behold.
I clicked on the underlying tweet thread and learned that some countries have adopted an approach where everyone wears face masks when they are out and about. That way, if you are infected and don’t know it, you won’t spread the virus to others. It requires everyone, or most everyone, to adopt this approach, which is why they call it Masks4All.
So I went to Etsy (Disclosure: I am the Chairman of Etsy and own a large amount of stock) and bought some face masks for my wife and me from a number of Etsy sellers. These are not medical masks. They are fabric masks, some with filters, some without filters. And we have been wearing masks when we leave our home ever since.
In the following days, every time we would go out to the market or for a walk, we would notice more and more people wearing masks. We are in Los Angeles right now and I would guess that at least half of everyone out and about in LA right now are wearing masks in public. It could be even more than that.
Last week, federal and state and city government officials started recommending wearing masks in public and we started to see even more people wearing masks.
Around the same time, Etsy started to see a lot of people coming there to find and purchase fabric masks. So they put out a message to all of their sellers (they have over 2.7mm sellers) asking them to make fabric masks if they can sew and work with fabric. And they massively increased the number of sellers making masks and the amount of mask inventory on Etsy.
If you go to Etsy and search for face mask (or mask or fabric mask or something along those lines), you will see this:
You can drill down and find the right kind of mask for you, your kids, your parents, or whomever you want to buy one for.
I like this story for a lot of reasons. For one, it shows that tens of thousands of individuals can come together and quickly ramp supply of something that everyone wants to buy right now. We don’t have to be reliant on a single large supplier. Second, by using fabric masks, we leave the medical mask supply for the healthcare workers which is critical right now.
And maybe most importantly, masks can become personal. Mine is different than yours. Maybe I have a bunch of them for various moods, days, times of day, etc. Like t-shirts or hats.
If we are going to be wearing masks in public for a while, we might as well treat them like any other item of clothing we wear, make sure they are comfortable, fit well, and look good too.
And Etsy is a great place to shop for things like that.
One of the silver linings to this awful pandemic is that things have slowed down a lot. Not just work. Everything really.
I find myself taking more time to do the dishes, work out, meditate, etc. There is less “racing through the day” and more time to do things right and carefully. We clean the house on Sundays and it takes the two of us almost three hours and while I can’t call it enjoyable, there is a certain satisfaction from doing it well and doing it right.
My inbox has less in it and I can spend more time talking to people; my colleagues, the leaders of the companies I work with, friends in the business, etc. I find myself being more proactive and less reactive.
It feels really good. I would happily trade this good feeling for a world in which nobody is dying and nobody has lost their job. It’s a terrible price to pay for more time.
But we are where we are and we can’t go back and change the course of history.
What I am wondering is how we keep this slower pace when the world gradually reopens. And will we? I hope so because it is showing me the cost of going so fast and the benefits of going more slowly.
There are so many challenges facing us right now that the smaller things often get overlooked. One of those things is summer internships for students who are focused on a career in tech. Many companies are struggling to stay afloat and have canceled all of their summer internships. That makes total sense as you can’t really consider having summer interns when you are laying off half of your workforce or more.
But there are many companies in the tech sector who are going to be able to get through this crisis without major cuts. And I am hoping that they can pick up the slack a bit.
Etsy, where I am Chairman, just notified all of their summer interns that they are maintaining the program, but all of the interns will work remotely this summer. That will be challenging for Etsy and the interns, but I am thrilled that Etsy is able to do this.
If you have a summer internship program and are in a financial position to continue it, please consider doing so. A remote internship might not be as great as an in-person one this summer, but it is way better than sitting at home doing nothing.
This week, I’m drawn to this huge GoFundMe campaign that Apple, Laurene Powell Jobs, and Leonardo DiCaprio launched yesterday to raise money for World Central Kitchen and Feeding America, two large charities who run food programs for the poor and dislocated.
When things go wrong, it is always those with the least who suffer the most. So I am helping this campaign get to its $15mm goal. If you want to join me, you can do so here.
