The effect of COVID-19 on European Tech

“There are decades when nothing happens; and there are weeks when decades happen.” – Lenin

In the past 24 hours, the stock market crashed to bear territory, Trump pumped a $500 billions stimulus as a response, the NBA and all major sports leagues were postponed and Tom Hanks got infected.

I’m writing this from Argentina and doing fine. But my mental bandwidth has been violated by the COVID-19 pandemic. Opening Twitter feels like letting the Trojan horse in, and I do it 50 times a day.

One scenario I’ve been trying to wrap my head around is the impact of COVID-19 on the European technology landscape. My usual weapon of choice for understanding a complex topic is writing about it. But this time I had to leave the words aside, and go for my second favorite tool: spreadsheets.

The result is this Google Sheets outlining what the potential ramifications of COVID-19 on European tech. It narrows down broad behavioral changes all the way to specific companies.

1. What are the broad behavioral changes we are seeing
2. Within those broad changes, what are more specific consumption changes
3. Which industries will be affected
4. Which companies will be affected

For example: People go out less often & shift spending → More people train in-doors → Sports booking platforms usage drops → Gymforless and Urban Sports Club will be affected.

Again, you can check it out here.

Checkout the spreadsheet

If you have any thoughts, do not hesitate to hit reply. A reason why I put this out there is because if I'm wrong, someone will point it out (and very publicly). That will help me improve my mental model of the pandemic and, in turn, refine the spreadsheet.

Now, one last thing I want to say...

My own concerns about COVID-19: public vs. authority

The most effective responses to the COVID-19 outbreak so far have come as a direct result of central planning, not the free market.

• China went into a draconian lockdown when Wuhan was at 495 cases and 20 deaths.
• South Korea controlled the outbreak via aggressive testing (over 10,000 per day) and social distancing.
• Italy is slowly controlling the outbreak after locking down the entire country.

Why am I saying this?

I have many concerns right now, including the fact that people might think authoritarian governments are better than democracies in times of crisis, but my biggest one is how the relationship between the public and the authority can impact the outcome of this pandemic.

As new media analyst Martin Gurri outlines in The Revolt of the Public, the Public is at constant war with the Authority.

"We are caught between an old world which is decreasingly able to sustain us intellectually and spiritually, maybe materially, and a new world that has not yet been born…. Each side in the struggle has a standard-bearer: authority for the old industrial scheme that has dominated globally for a century and a half, the public for the uncertain dispensation striving to become manifest. The two protagonists share little in common, other than humanity – and each probably doubts the humanity of the other. They have arrayed themselves in contrary modes of organization which require mutually hostile ideals of right behavior. The conflict is so asymmetrical that it seems impossible for the two sides actually to engage. But they do engage, and the battlefield is everywhere."

In this constant war between the two sides, the Authority has been constantly ridiculed, ignored or discounted as a valid source of information by the Public, who now relies on internet memes (“this is like the flu”, “it only affects old people”) for survival.

So if the key to control the outbreak of COVID-19 is an early, strong and decisive response from the Authority (governments, health orgs.) and an orderly Public (us, you, everyone) that responds positively to central planning, we might be in deep in trouble.

But there’s hope. Stronger trends have been reversed.

As a conclusion, I’m going to leave you with this paragraph from the Sequoia memo on the current events titled Coronavirus: The Black Swan of 2020.

"Having weathered every business downturn for nearly fifty years, we’ve learned an important lesson — nobody ever regrets making fast and decisive adjustments to changing circumstances. In downturns, revenue and cash levels always fall faster than expenses. In some ways, business mirrors biology. As Darwin surmised, those who survive 'are not the strongest or the most intelligent, but the most adaptable to change.'"

Be safe, adapt to the circumstances and don’t be an idiot. This is not a time for war, not even against the authority.