Thread by @dunkhippo33

As VCs start to make predictions around the future of industries, here are my thoughts on trends:

1) B2B software will be a BIG winner. Remote work was already a growing category; COVID-19 just accelerates. Since last recession, IT spend doubled:

(statista.com/statistics/203…)

2) Groceries. My worry is that we'll move a lot of gig workers into on-demand groceries, but a lot of that demand will go away. Online groceries are just WAY TOO expensive for consumers. Often 30%-50% markup of total bill shopping in-person. Not sustainable except for the rich.

3) If we want online groceries to grow in a big way as a category, we need to change how logistics work altogether. (why have a box store even? Doesn't make sense to spend on the exp real estate and then have expensive last mile delivery) We don't have that today.

4) Cloud kitchens: in a similar vein, very interested in the rise of some cloud kitchens. Delivery from existing restaurants w/ exp real estate again is tough to make work.

Btw, very interested in logistics / automotive plays in both of these if anyone is working on this.. :)

5) Telemedicine: the US gov has already changed some regulations in this COVID-19 situation. Some of our companies that prev would have taken yrs to expand to support 50 states are now doing that. This is HUGE.

6) Education: I'm hearing lots of ppl say that online education is here to stay. I think for certain students that could be true. But I think COVID-19 also reveals how it doesn't work.

What most ppl don't realize is that schools are only 30% about learning. 70% about childcare.

7) Most Americans cannot homeschool their kids because parents have to work more than ever. Americans are holding down multiple jobs / gigs. And frankly speaking, most parents who even are in a position to do this just don't want to watch their kids 24/7!

8) Maybe there is a model where you can have "home schools" where kids are watched by a "supervisor" & taught online by teachers. But, seems nichey. Online edu requires high attn span & focus. Diligent students. Online courses are less hands-on - hard to engage.

9) So maybe we'll see a rise in private schools online for these diligent students from wealthy households. But it won't solve our edu problems in the US for most ppl. Edu issues in the US aren't about teaching. So many societal issues often involving socioeconomics baked in.

10) Travel: after 9/11, we changed our behavior in travel. When I was a kid, we could just walk into airports and meet ppl at the gates. There was really no security. Post 9/11, the nature of travel changed. We should expect changes here too even post-vaccine.

11) Temp checks in every intl airport at a minimum. Ppl wearing masks on planes always. I think travelers w/ colds will be turned away or quarantined for 2 weeks. This might lead to the rise in travel insurance and other related products.

12) Some ppl are saying business travel will taper off. To @Alex_Danco 's pt in his last newsletter, on the contrary, travel will show that you are committed. So I think it will come back. But it will just be different. Ppl can't just power through a cold on a plane anymore.

13) Real estate: I don't think we've seen the full effects yet on real estate. First, ppl will default on their mortgages and rent. Some govs are passing laws to help these folks so the delays on this will be a yr out or even longer.

14) But at some pt, overleveraged folks will have to sell. We'll likely see big impact on the RE markets next yr is my guess. I don't think popular areas will be affected much - we have pent up demand & low housing supply. The SF Bay area market prices aren't going to drop 30%

15) As a secondary effect - combining increased remote work, though, COVID-19 will accelerate ppl moving out of popular places like the Bay Area.

16) Cities: a lot of ppl on Twitter are saying they want to move from cities to the countryside. I don't see that happening. Cities in theory are actually much better equipped to handle outbreaks (Taipei - great example. Or even SF.)

17) My childhood friend lives in Blaine County, Idaho, and her husband is an ER dr. They have approx 2.5x the outbreak (per capita) of NYC! and way fewer resources. I think it's easy to think to move to the countryside in times of crisis, but when it comes down to it, ppl won't.

18) So in summary of my ramblings:

-Telemedicine: 👍due to regulation changes
-B2B software - budgets slashed for now but 👍esp remote work infra
-Groceries / Restaurants - return to status quo until infra changes
-Edu - return to status quo
-RE tech - may take a dive next yr