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For a while, wishful thinking suggested a “v-shaped” recovery would follow the coronavirus-imposed economic downturn. We now know that won’t happen. Instead our preoccupation is justifiably focused on the next few months: When and how can we re-open? When will testing improve? When will a treatment or a vaccine be ready? What will the new normal look like?
All this neglects the most important topic: the overall resizing of the global economy. We know the recovery won’t be swift. We can see that even in China, where at minimum, anecdotal evidence suggests infection transmission has mostly ceased. I fear in coming weeks we’ll be coming to grips with a fundamental (downward) reset of the economy, with an unknown but protracted time to return to previous levels.
We’ll feel this acutely at Fortune, where our staff is in the process of assembling the current issue of the Fortune 500 based on 2019 revenues of the biggest publicly listed U.S. corporations. It feels obvious that the aggregate revenues of the Fortune 500 will decline in 2020, and the ramifications will be devastating.
Technology companies, despite the cheery news of late, won’t be immune. Apple and Google experienced sales growth in 2009, amidst the financial crisis. Cisco did not. Any company big enough to reflect the behavior of the macroeconomy will be challenged. Think: Apple, Alphabet, Microsoft, Salesforce, and Cisco (again).
A perfect sentence in an interesting article about Eric Schmidt’s efforts to remake the U.S. military: “In an interview, Mr. Schmidt — by turns thoughtful, pedagogical and hubristic — said he had embarked on an effort to modernize the U.S. military because it was ‘stuck in software in the 1980s.’”
Gil Schwartz, the longtime head of communications for CBS and famously a Fortune columnist under the pseudonym Stanley Bing, died over the weekend. He was an intellectual, a raconteur, a witty drinking companion, and a mensch. Andrew Nusca wrote a lovely remembrance of him here.
I finally finished my first book since the lockdown began, a reflection that I’m blessed to be busy with work. I read Hilary Mantel’s Bring Up the Bodies, the second installment in her historical fiction treatment of Henry VIII’s hatchet man, Thomas Cromwell. I liked it, but I wish I’d read it on vacation, not a few pages at a time before going to bed.
Also, after initially not being able to watch anything remotely disturbing on TV, I completed The Man in the High Castle on Amazon and am halfway through The Plot Against America on HBO. Both are really good. And disturbing. As a Chicagoan present in that great city for most of the Michael Jordan era, I’m also enjoying ESPN’s Last Dance.
This edition of Data Sheet was curated by Aaron Pressman.
Expensive outburst. There was pushback from one reader last week after I contrasted Elon Musk's comments about San Francisco and China. I think I'll win round two. On Friday, the Tesla CEO wrote a strange series of tweets about selling his physical possessions and that "Tesla stock price is too high imo." Shares of Tesla plunged 10%, and are now holding a 68% gain year to date.
Who was that masked man? We're adjusting to pandemic (and post-pandemic) life. Uber plans to require drivers and passengers to wear masks for all rides in the U.S. and some other countries. "Our teams are preparing for the next phase of recovery, where we will all have a role to play," Andrew Hasbun, Uber's head of safety communications, told CNN Business.
One way to make a buck. Activist hedge fund Elliott Management, last seen these parts harassing Twitter and AT&T to improve their management, is financially backing a patent lawsuit against well-funded video startup Quibi, the Wall Street Journal reports. The lawsuit, filed by a small company called Eko in March, alleges a key feature of Quibi's app called Turnstyle infringes on prior patents.
Can you tell a green field from a cold steel rail? Video conferencing giant Zoom has had some well-publicized troubles with its privacy and security policies, but it turns out the competition isn't so pristine either. A report by Consumer Reports looking at Microsoft's Skype and Teams, Cisco's WebEx, and Google's various apps concludes: "From a privacy point of view, none of these options are great."
FOOD FOR THOUGHT
Writer and VC Om Malik takes a swing at predicting how the tech landscape will change. He sees many companies speeding up their transition to digital and cloud services.
Together with data, cloud, and automation—companies are going to be looking at a more resilient future, one that sits on top of a network. It is not as if they had a choice. COVID-19 has exposed one harsh truth: digital channels are more flexible and faster to adapt to change than physical channels. And now, the world is almost entirely running on the network. This affirms my long-held beliefs. It is a testament to the inevitability of the Internet, which I wrote about in 2008 — and again in 2013.
Now, the inevitable has happened.
IN CASE YOU MISSED IT
Introducing The Rebuild Program—a project to help small businesses reopen amid a pandemic By Rachel Schallom
How do you bet on a company that doesn’t yet exist? By Lucinda Shen
The cofounders of startup Magic Spoon on breaking into a food industry dominated by legacy players By Rachel King
The Coronavirus Economy: The startup founder in India striving to improve mass transit By Maithreyi Seetharaman
3 changes businesses will need to adapt to post-coronavirus By Kevin Sneader and Shubham Singhal
(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
While Adam was catching up on some alternate history fare, the Pressman household moved on to fictional titans of Wall Street. The first episode of the fifth season of Billions arrived Sunday night and it was just as juicy and rip-roaring as the last four seasons. It was filmed pre-COVID-19, but there's a message of sacrificing for the greater good buried in there, too. "We all do the job for each other," real-life professional wrestler Becky Lynch intones in a cameo. We'll be back doing this job tomorrow. Stay safe.