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Just a few thoughts to end what for so many has been a difficult week.
- It didn’t get much attention, but on March 27 Google announced a Covid-19 relief plan with a very large headline number, $800 million. As Danielle Abril reported this week in Fortune, the largest chunk of that aid, $340 million in “ad credits” for smaller companies, is only a tiny percentage of Google’s sales to those so-called SMBs, businessspeak for small- and medium-sized businesses. The fine print is important too. The deal is only valid for existing Google customers who’ve been actively buying ads since January 1, 2019. And the credits will be applied in “coming months,” hardly the kind of detail imperiled businesses need right now.
- Speaking of lack of detail, the $349 billion Paycheck Protection Program for small businesses announced as part of the $2.2 trillion Congressional aid package looks to be an anxiety-inducing shot in the dark for companies hoping to benefit from it. Jenna Schnuer dug into the details for Fortune: The program looks to be confusing as all get-out and is likely to provide a mere drop in the bucket for what businesses need to survive. (I’d love to hear from a tech company that is trying to get one of these loans and would be willing to walk me through it.)
- A headline on a Fortune commentary piece caught my eye this week: “After coronavirus, we need to rethink densely populated cities.” Author Joel Kotkin of the Urban Reform Institute argues convincingly that besides the obvious correlation between density and ease-of-spread for infectious diseases, the commercial imperative for dense cities may be on the wane too. The word “density” has been a rallying cry among a certain set of housing advocates, particularly in sprawling California, who argue that increasing density is the key to lowering home prices. They may be losing the argument for a reason that they hadn’t even considered.
Adam Lashinsky
This edition of Data Sheet was curated by Aaron Pressman.
NEWSWORTHY
Keeping the shelves stocked. I don't know how your gadget usage is going so far in the time of coronavirus, but our household's has definitely skyrocketed. Apple is rumored to be ready to feed the need, with a new version of its lowest priced phone, the iPhone SE, about to launch. With the pandemic crushing retailers, however, new phone sales are projected to decrease 13% in 2020, dropping to under 1.6 billion devices, the lowest in a decade, CCS Insight says.
Mega trends. Google will start releasing public monthly reports about declining visits to stores, parks, and transit centers in 130 countries. The data will come from the anonymized movements of more than one billion people who use Google's Maps app.
I promise not to repeat things other people say. Tech company of the moment, for better or for worse, Zoom, disclosed that its user base has jumped from 10 million people a day in December to 200 million currently. CEO Eric Yuan had another blog post, this time apologizing because "we have fallen short of the community’s – and our own – privacy and security expectations." The company will stop adding new features and focus on fixing the problems, he vowed.
In the spotlight. Another tech company in focus during the pandemic, Amazon, is rolling out new safety measures including temperature checks and masks for employees at warehouses and Whole Foods markets. The company also had a plan to denigrate fired New York warehouse worker and labor organizer Christian Smalls, Vice reports.
Zoom, zoom, zoom. On Wall Street, Tesla impressed, beating expectations for how many cars it could deliver in the first quarter. Tesla's stock price, already up 9% this year, jumped another 16% in pre-market trading on Friday. Airbnb had hoped to be trading on Wall Street via an initial public offering this year, but that looks more and more unlikely. Business is down 90% and the startup lowered its private valuation by 16% to $26 billion, the Financial Times reports.
FOOD FOR THOUGHT
At one point, not long ago, it seemed like e-commerce and online marketing had allowed a new breed of direct-to-consumer, or DTC, retailers to take off. You know the brands: Warby Parker, Casper, Everlane, etc. But even before the pandemic hit, the market was experiencing a culling. Harvard Business School professor Len Schlesinger, Harvard MBA student Shaye Roseman, and VC Matt Higgins have surveyed the field in an article for the Harvard Business Review (phew, that's a lot of Harvard) and have some explanations and advice for the next generation. They offer one strategy of going beyond digital.
A new crop of retail concepts have sprouted up to meet this emerging need. Showfields, Bulletin, Story, and Neighborhood Goods are all variations on the same theme, curating and aggregating DTC concepts under one roof without requiring long-term lease commitments and expensive build-outs. Although it’s unclear how viable or scalable this new incarnation of master-lease retail will prove to be, many DTCs who have dabbled in at least some offline presence report customers who interact with their brand in the physical realm have lower merchandise return rates and more repeat purchases than their online counterparts. Whether a brand’s retail strategy should include company-owned stores, national retail networks, Amazon listings, or some combination of the three depends on the strength of its community, the level of control it requires in storytelling, and the scale it aims to reach.
FOR YOUR WEEKEND READING PLEASURE
A few long reads that I came across this week:
DJI Won the Drone Wars, and Now It’s Paying the Price (Bloomberg Businessweek)
China’s flashiest global brand has a 77% share of America’s consumer drone sales. It also has to deal with coronavirus, the trade war, a $150 million fraud scandal, and skeptics in the U.S. and Chinese governments.
Gem Fatale (Bookforum)
There are a lot of hustles in the jewelry business. It’s a cash business with big numbers and independent spirits, and that creates a kind of pure capitalism, with all of its flaws.
The Woman Who Lives 200,000 Years in the Past (Outside)
As we confront the reality of COVID-19, the idea of living self-sufficiently in the woods, far from crowds and grocery stores, doesn't sound so bad. Lynx Vilden has been doing just that for decades, while teaching others how to live primitively, too.
How I Wrote Five Novels While Commuting (Wall Street Journal)
"For years, I got nowhere with my efforts. Then I realized I had a lot of time on my hands. So I started typing."
IN CASE YOU MISSED IT
Zoom meetings keep getting hacked. Here’s how to prevent ‘Zoom bombing’ on your video chats By David Z. Morris
Hulu could be an essential streaming service—if Disney figures out what to do with it By Aric Jenkins
Garmin’s CEO on fending off Apple and Google By Danielle Abril
Why China’s tech-based fight against the coronavirus may be unpalatable in the U.S. By Jonathan Vanian
‘It’s going to be a mess’: What small businesses applying to the SBA’s Paycheck Protection Program need to know By Anne Sraders
(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
As creative writers are cooped up at home, they're producing some interesting serialized online work. Damon Lindelof, of Lost fame, is penning a thriller called Something, Something, Something Murder. And Girls creator Lena Dunham is writing a serialized relationship story called Verified Strangers for Vogue. If you've done enough reading, HBO decided yesterday to start offering free access to many of its best series, including The Sopranos, The Wire, and Silicon Valley. Stay busy and healthy out there.
Aaron Pressman