Location and Work
I am confident this pandemic will end. At some point, we will have a vaccine, therapeutics, and/or broad based immunity. When that will happen is less clear to me. I believe that at some point, we will be able to resume living and working as we did prior to the pandemic.
However, I am also confident that we will not resume living and working exactly as we did prior to the pandemic because some of the things we have adopted to get through this will reveal themselves as comparable or better than what we were doing before.
One of the places this is happening is knowledge work which is a growing percentage of the workforce in the US. What we have seen in this pandemic is that knowledge workers have been able to be comparably productive working from home and that has caused many large (and small) employers to consider different work/location options.
Yesterday, Twitter told their employees that most of them can work from anywhere going forward:
A number of our portfolio companies have made that decision already as well:
I can imagine large and small banks, law firms, accounting firms, media and entertainment companies, and other knowledge based businesses making similar decisions.
I am not saying that remote work is ideal. There is something very valuable about being able to be in the same physical space as your colleagues. USV will likely keep an office for exactly that reason.
But it is also true that USV is operating incredibly well during this pandemic and we have not (yet) missed a beat.
What this means for large cities where many companies that engage in knowledge work are centered is an interesting question.
I saw this chart this morning on Benedict Evans’ Twitter:
That compares two of the most expensive cities in the US (and world) to each other. And as bad as NYC is on the affordability index, SF is way worse.
So when you combine these two situations; large knowledge work hubs getting prohibitively expensive and remote work normalizing, it would seem that we are in for a correction.
What is less clear is where knowledge workers who can increasingly work from anywhere will choose to live (and work). Will cities remain attractive for the quality of life they offer (arts, culture, nightlife, etc)? Or will the suburbs stand to gain? Or will more idyllic locations like the mountains or the beach become the location of choice? Or will second and third tier cities become more attractive? I do not have a crystal ball on this question. I suspect it will be some of all of the above.
But this may become a big deal. Like the “white flight” that happened in the 50, 60s and 70s in a number of large cities in the US. Wholesale movement of large groups of people can have profound changes on regions.
Like many disruptions, this is both bad and good. Affordability (or lack thereof) and gentrification have been a blight on our cities. If we can reverse that trend, much good will come of it. This may also be helpful in addressing the climate crisis which remains the number one risk to planet Earth. So there are reasons to be excited about this. But wholesale abandonment is terrible. We should do whatever we can to avoid that.
It is early days for this conversation. But it is one we are going to have all around the US, and possibly all around the world. So it is time to start thinking about it.