A. How Might The Coronavirus Change Our World?

When something like the Coronavirus or 9/11 or the Financial Crisis occur, I try to ignore the short term market volatility, and instead ask what does an event like this do long term to our world ?

What may the world look like in ten years time ? While the future is unknowable, I think it’s important to approach events with as broad a lens as possible.

My conversations show that three things are possible now:

1. Greater Push Towards Localization and Self-Sufficiency Around What We Consume.

Climate change was already pushing us towards a less polluting world and the coronavirus just adds another reason. Why should we ship goods and fly produce long distances when producing them locally not only reduces our carbon foot print but also makes the supply chain more resilient.

It’s funny how our digital lives run on the internet which is a decentralized and resilient system but our global supply chains are very vulnerable to a single point of failure.

The rise of technology such as vertical farming and hyper local manufacturing will be increasingly important. Given the specialist nature of products, there obviously won’t be a Tesla & iPhone factory in every city, but that’s where 3-D printing can help.

2. It Accelerates the Move towards Remote Work and Distributed Businesses.

The virus is driving wartime levels of innovation in remote working and HealthTech. The virus has forced a vast experiment in working from home. China is trialling hospitals with minimal human contact. Doctors speak by video link; robots deliver drugs and samples.

I’ve been hearing from my contacts in China how businesses are open (even though you don’t see people on the street), work is getting done and schools are teaching, but it’s all just happening remotely and online. With companies like Zoom and Ring Central, we’ll see a lot more use cases emerge, where businesses can be built on top of the live-streaming culture that is already established.

Work is being decentralized as more & more people would love to do their jobs remotely and in their own time.

3. More Walls Will Get Built & The Distrust Will Grow.

The coronavirus is another example of physical and digital walls being built to close borders and isolate particular groups. The US-China trade dispute had already started the world down a more balkanized future and this just pushes us further.

I’ve been surprised by what my Chinese friends tell me is as close to an existential crisis for Xi and the Communist Party that they think we have seen since 1989. China (and maybe all governments) already suffers from a huge trust deficit….the current epidemic in China or the elections & impeachment decisions in the US won’t bolster that trust.

All of that likely supports the populist outcry further.

A stat that gave me great comfort around the lack of existential threat from the virus: Seasonal flu kills 88,000 people a year in China. The toll from coronavirus stands at around 600…..

Check out last week’s discussion.

B. Dealing With The Vicissitudes of Life.

With the blur of January out of the way, the reality of a new year is settling in.

Every few months, I re-read one of the Stoics. These are some passages I have found helpful recently in dealing with life, relationships, work and markets.

“.…freedom isn’t secured by filling up on your heart’s desire, but by removing your desire”

- Epictetus

There are only two ways to be wealthy - a) to get everything you want or b) want everything you have. Be wealthy right now.

“Throw out your conceited opinions, for it is impossible for a person to begin to learn what he thinks he already knows”

- Epictetus

As smart or successful as we may be, there is always someone who is smarter, more successful, and wiser than us. As Emerson said: “Every man I will meet is my master in some point, and in that I learn from him”

“These individuals have riches just as we say that we “have a fever,” when really the fever has us.

- Seneca

What’s important to you, what do you really want in life and why ? Is it really the riches you seek or something else ?

C. A Few Things Worth Checking Out

1. Every year, Ben Evans (ex A16Z) produces a big deck digging into macro and strategic trends in the tech industry. This year: ‘Standing on the shoulders of giants’ looks at what it means that 4 bn people have a smartphone; we connected everyone, and now we wonder what the Next Big Thing is, but meanwhile, connecting everyone means we connected all the problems.

It’s a very thoughtful discussion that really made me think. Some slides I particularly liked:

2. Most of this week I’ve been listening to what I think is the greatest collection of business education in the world !! It’s the recordings of the Berkshire Hathaway Annual meetings since 1994 packaged into bite sized podcasts. You get to listen to hours of wisdom from Charlie and Warren over 25 years. Can’t imagine a better use of time.

3. Great & thoughtful Morgan Housel article on the Five Lessons from History. My favorite is probably #1.

Lesson #1: People suffering from sudden, unexpected hardship are likely to adopt views they previously thought unthinkable.

4. I’m listening to Shoshana Zuboff’s book Age of Surveillance Capitalism and found this great NYT article she wrote. Two quotes that capture the essence of her argument:

“We thought that we search Google, but now we understand that Google searches us”; and: “We assumed that we use social media to connect, but we learned that connection is how social media uses us”. 

5. Great Sam Altman blog post on How to Invest in Startups.

It’s premised upon two observations: (1) there is a lot of advice about how to be a good startup founder, but there isn’t very much about how to be a good startup investor; (2) this is a hard time to invest in startups.

Sam says to be a good investor, you just need to: (1) get access to good opportunities, (2) make good decisions about what to invest in, and (3) get the companies you pick to choose you as an investor. Simple right ?

6. Patrick O’Shaughnessy interviewed Michael Mauboussin on stage at Capital Camp 2019. They talk about how to improve processes for thinking, decision making, and investing. And they also get into complexity theory, information transmission, and competitive advantages amongst many other things.

D. Carpe Diem

Life is too short to not be pursuing the best opportunity you know of.

Today might be the best chance you have to take action.

The longer you wait, the more deeply embedded you get in your current lifestyle.

Your habits solidify. Your beliefs harden. You get comfortable.

It will never be easy, but it may also never be easier than it is right now.

- James Clear

E. Quotes I’m Smiling About:

“I’m not a member of an organized political party. I am a Democrat.”

- Actor and commentator Will Rogers (channeling the Iowa caucus)

“Whatever happens will be for the worse, and therefore it is in our interest that as little should happen as possible.”

- 19th century British prime minister Lord Salisbury