Startups could suffer even more than they did in 2008 or 2000
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Nearly a month ago, at least one cherished reader wondered by email if Sequoia Capital might have been overreacting, and if I might have been adding fuel to the fire, when I wrote about the venture-capital firm’s March 5 blog post, “Coronavirus: The Black Swan of 2020.”
Sadly, Sequoia was alarmed but hardly alarmist.
The startup scene in Silicon Valley is being ravaged. Erin Griffith, writing in The New York Times, tallies more than 50 companies that have fired or furloughed about 6,000 employees in mere weeks. I hadn’t heard of many of the companies Griffith mentions. That’s normal. In boom times, most startups have little reason for being and are destined to die a natural death before too long. Many of Silicon Valley’s proponents find this charmingly Schumpeterian. But a few are legitimate companies whose businesses are now evaporating. Fitness class repackager ClassPass, for example, has seen 95% of its business dry up.
In a manner of weeks, the tech scene has begun to feel not so much like 2008 but like 2000, when out-of-work youngsters attended “Recession Camp” and a website devoted its coverage to companies that had gone under. (Readers of a certain vintage will enjoy this brief trip down memory lane.) Now, writes Griffith, sites and newsletters are catering to laid-off techies.
The attacks of 9/11 deepened an ongoing recession after the dot-com bust, and a housing-price collapse triggered the financial crisis that in retrospect barely dented Silicon Valley. A month after the economic warning signs first appeared, it feels like the calamity of 2020 could be worse than either of these shocks.
Are there things you left in your office that you wish you’d grabbed before that last day? I failed to bring home a review copy of the new book by Netflix CEO Reed Hastings and co-author Erin Meyer No Rules Rules: Netflix and the Culture of Reinvention. It was set to be published May 12th, but as for many spring publications, that date is now off. Netflix says Hastings now hopes to publish the book in the fall.
This edition of Data Sheet was curated by Aaron Pressman.
I see skies of blue and clouds of white. Home networks are about to get a big boost. The Federal Communications Commission said Wednesday that it's moving to open the 6 GHz band for unlicensed use. The whole band. "By doing this, we would effectively increase the amount of spectrum available for Wi-Fi almost by a factor of five," the agency said. Consumers will need to upgrade to new compatible Wi-Fi gear once the agency opens the band, however.
Shoot first, shoot fast, shoot well. In other speed-up news, Intel announced new high-performance processors for laptops dubbed Comet Lake with a record-breaking top speed of 5.3 GHz and Nvidia debuted its fastest-ever mobile graphics chips as "Super" versions of its RTX 2000 line.
#finally. It took about as long as an elephant pregnancy lasts, but T-Mobile and Sprint finally closed their merger to create a third mega-carrier in the U.S. wireless market. The closing also marked a leadership transition, as CEO John Legere handed the top job to Mike Sievert. The combined company, which had $78 billion of revenue last year, will trail AT&T and Verizon by most metrics, but for how long? “We have the potential to become No. 1," Sievert tells Fortune.
Don't do as I say. Recall way back on Monday when Amazon said it fired warehouse worker and labor organizer Chris Smalls for not following social distancing rules? Seems Amazon itself hasn't been enforcing social distancing at recent hiring and employee orientation events, Bloomberg reports. Amazon said it has since changed its policy and holds all new hire events virtually.
One less pitchfork needed. We were all outraged last fall when SoftBank Group's bailout for WeWork included $1 billion for former CEO Adam Neumann, so should we celebrate now that the deal is now off?
Another pitchfork to put down. Bit by bit, perhaps to ease regulatory scrutiny, Apple is relaxing some of its most egregious policies around mobile apps. This week, Amazon's video app got permission to let users rent movies right in the app without Apple collecting a 30% transaction fee. Imagine that. Hopefully, Kindle app users will be able to buy ebooks in that app soon, as well.
FOOD FOR THOUGHT
As we've covered a few times at Fortune, the pandemic has forced schools to close across the country, prompting a massive shift to remote and online learning. Wall Street Journal reporters Leslie Brody and Lee Hawkins explore how the changes have impacted 1.1 million New York City public school students and their teachers. Some tough days now may lead to benefits in the future.
Some teachers say the pressure to innovate will improve their skills in the long run. That includes Debra Fisher, an occupational therapist who helps children with disabilities on Manhattan’s Upper West Side. She said she faced a tremendous learning curve handling online tools but has come up with projects using materials on hand. One math game has students color Q-Tips, arrange them in geometric shapes and sort them into piles reflecting fractions.
“This has been an absolutely grueling experience but at the same time an amazingly fantastic one,” Ms. Fisher said. “The students are benefiting because the parents are there in deeper ways.”
IN CASE YOU MISSED IT
Should Apple be allowed to kill one of Android’s best weather apps? By Aaron Pressman
Coronavirus has killed the audacious Xerox-HP deal By Lucinda Shen
Google’s coronavirus relief program for businesses also helps Google By Danielle Abril
Safari browser users report trouble filling out 2020 Census By Chris Morris
The future of shared workspaces and social clubs after COVID-19 By Gabby Shacknai
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
BEFORE YOU GO
Last night marked the series finale of Syfy's uneven but occasionally brilliant fantasy series The Magicians. Season five has been a bit of a struggle, deeply missing former cast member Jason Ralph, whose character Quentin Coldwater departed last season. Still, the first two seasons and parts of the rest are worth a binge (it's on Netflix). Or for a quieter diversion, Lev Grossman's trilogy of novels that inspired the TV series are worth a read. Stay safe.