Crisis or Opportunity?

Candice eetimesFor decades, the start-up entrepreneur’s mantra has been “disruption”.  If one was to have a successful start-up, it had to disrupt it’s industry.  Well… here today, with the COVID-19 pandemic, is economic disruption on a global scale.  Nearly every industry has been effected.  So, as opportunity is the obverse of crisis, now is an excellent time to take stock of entrepreneurial and investment opportunities.

First, the obvious.  Businesses that depend upon in person transactions such as restaurants, bars, nightclubs, personal grooming, etc. have been hit hard by the need to maintain physical (we mislabel it “social”) distancing.  It may be several years before we can comfortably return to taking such close contact for granted.  These closures and restrictions have also disrupted their supply chains.  For example, food distribution to restaurants have been disrupted clear back to the farms that source the food.  These are clearly areas of opportunity for new businesses, new models.

Already, we can see some readjustments in some of these businesses, as take-out and delivery replace in house dining.  Even more interesting is supply chain adjustments to deliver raw foods directly to households.  This will continue and will likely create new opportunities.  Oddly, it is also a throw-back to an earlier time when the butcher, green-grocer, and the milkman all did home deliveries largely because most households either had no car or only one, such that the homemaker couldn’t drive to a supermarket (which only came into existence when the second car became available to the suburban household).  Providing these services efficiently will be a challenge and the firm that figures it out will be the big winner.

This need to maintain physical distance has ironically turned conventional wisdom upside down.  For a generation of teenagers, people wrung their hands at how young people were glued to their smartphones, talking, texting, or browsing, instead of in person socializing… or paying attention to the droning lecture from the teacher in the classroom.  We now see that they had been in training for this moment.  And this means that they are ready to adopt new modes of entertainment and education.  The firms that figure this out will clean up.  Forget large movie houses or even the multiplex.  Forget large classrooms with mediocre instructors.  They won’t be missed by the younger generation.  (Read my essay on the past and future of education.)

The pandemic has disrupted manufacturing supply chains.  For several decades, the mantra was ‘just in time’ supply.  It made sense in that it reduced Work In Production (WIP) and thus capital tied up in inventory.  But we had already seen issues with natural disasters interrupting supply chains… but when an entire global economy is interrupted?  The new mantra will have to be something more like ‘resilient & agile’ as well as ‘just in time’.  Manufacturers and logistics firms that solve this puzzle will dominate the next century.

We’ve seen contradictory developments in health care delivery.  On one hand, some hospitals have been overwhelmed with sick and dying patients, while others and many clinics, have been shuttered by others avoiding them lest they be exposed.  We’ve seen that our earlier ideas about mobile emergency hospital ships have proven nearly useless, yet the idea that developed out of warfare, the Mobile Army Surgical Hospital (MASH) unit proved itself.  Yet, we still didn’t have enough in some places and too much in others.  Solving this will be BIG.

Imagine if you will (said in Rod Serling voice) a simple at home sample that one licks and seals.  It has a grid of chemical reagents that detect compounds and antibodies and changes color.  One then takes a photograph with their smartphone.  One’s fitness wearable has constantly measured other variables.  A web based system analyzes the photo and provide instant diagnoses and even orders one’s new meds if it detects changes in disease, etc.  If the system detects something that requires it, an appointment for a video conference with a physician is scheduled.  Vaccinations are provided annually via peel and stick patches mailed to your home.  Another lick and seal antibody test days later confirms one’s immune status.  Clinical visits would be rare.  But when they do occur, one would walk through a whole body scanner at the entrance and the medical AI will have delivered it’s evaluation before you see the physician and if needed, personalized medication is being fabricated by a machine at a local pharmacy.  It might be a CAS9/Crisper fix for a genetic disorder, or it might be a designer virus to treat a bacterial infection.