The coronavirus is everyone’s business


March 13, 2020

This week marked a turning point in the coronavirus outbreak. With cases spreading across the globe, we’re witnessing some extraordinary developments: The American markets just had their worst day since 1987, governments are banning large gatherings en masse, and cancellations and closures are piling up. The sharp downturn could impact the business world for months, if not years. In the coming days, we’ll tell you more about:

  • How the outbreak is affecting businesses and their workers
  • How companies are adapting to the ever-shifting landscape
  • What industry leaders and experts are expecting next

We’ll also point you to resources that can help you stay informed, safe, and sane. Tell us: What would you like to see more of? How is the outbreak affecting you? Tweet your thoughts @TheHustle. Stay safe out there.

Coronavirus

What does the coronavirus mean for business?

Whether you’ve been told to work from home indefinitely, leave your college campus mid-semester, or cancel plans to catch a Broadway show or an NBA game, you’ve probably seen the coronavirus affect your life by now.

And if you’ve been watching the markets — which have been tumultuous, to say the least — you’ve probably realized the coronavirus is having a big impact on the business world, too.

Over the coming weeks and months, few aspects of business won’t be affected to some degree by the coronavirus. 

But how deep will its impact go?

To answer that question, we’ve canvased the country, talking to business owners, workers, and consumers, and evaluating the effect on major institutions, events and markets.

Below, we break down how all those groups have been impacted, how they’re responding, and what to look out for in the coming weeks:

1. Business owners

Impact: The coronavirus is scattering workforces, straining supply chains, and diminishing demand, making it more expensive for businesses to operate and harder to sell their products.

Response: Businesses are telling their employees to work from home (if they can), adjusting their forecasts downward, and developing contingency plans to continue operating.

Some examples:

▪ More than 150 publicly traded businesses have issued warnings to their investors, detailing temporary store closings, lost sales, and other missed revenue.

▪ Boeing halted hiring and eliminated overtime to conserve cash as its stock has dropped.

▪ Companies — like Hilton, eBay, Disney, United Airlines, and Royal Caribbean Cruises — are opening credit lines to make sure they have enough cash to finance their operations.

What to watch:

Workforces will continue to evolve. New positions will emerge (experts recommend that businesses appoint “coronavirus coordinators,” for example), and after the pandemic ends some of these roles — particularly ones that cater to remote workers — may continue. Other companies may realize some positions should remain remote.

Businesses will develop new ways to sell… or fail. The success of these strategies — revamped online sales funnels, virtual experiences — will determine which companies survive and which don’t. Airlines, for example, are particularly vulnerable: A British airline called Flybe has already gone out of business.

Contingency plans will crop up everywhere. As businesses learn where their single points of failure were, companies that survive will take steps to reduce future risk. Many employers — including the federal government — are scrambling to develop work-from-home policies.

2. Workers

Impact: The coronavirus is making it more dangerous to commute to work on public transportation and more dangerous to work in crowded places.

Response: Employees with flexible employers are working from home and trying their best to stay productive. Employees with less flexible employers — or jobs that can’t be done remotely — are attempting to stay healthy at work and demanding protections from their employers.

Some examples:

▪ Employees at Facebook. Google, Amazon, and other large tech companies were asked to work from home. 

▪ Amazon offered employees unlimited sick days — but only people infected with the coronavirus are entitled to pay.

▪ Meanwhile, employees at restaurants and other service industry businesses that require in-person work are protesting their lack of access to paid sick leave.

▪ On the other hand, Trader Joe’s employees — who also can’t work remotely — gained access to a new paid sick leave program. 

▪ And some employees working in jobs that could expose them to the virus — like baristas at Starbucks — even became eligible to earn “catastrophe pay.”

What to watch:

Unprotected workers are going to get loud. Criticisms about the lack of paid sick leave and benefits for gig workers were already common, and now the pandemic has thrown those issues into the limelight.

Employers will get serious about remote work. Companies that had only dipped their toes into developing remote work policies will now be forced to develop them to attract — and support — remote workers.

3. Consumers

Impact: The coronavirus is discouraging consumers — including normal folks like this elderly couple — from going out to buy non-essential items. 

Response: A slowdown in non-essential spending has already begun, and economists estimate spending on food services, arts and accommodations will drop 80% and spending on public transportation will drop 67% if the pandemic continues. At the same time, however, consumers have increased spending on certain products (like surgical masks and other hygiene products) which has led to price gouging.

Some examples:

▪ Aerial photos show that some of the world’s most popular travel destinations are nearly empty of tourists.

▪ Desperate cruise companies and airlines are waiving change fees and offering steep discounts to attract customers.

▪ Amtrak cancellations are up 300%.

▪ Some movie theaters are promising to put empty seats in between viewers to get moviegoers through their doors.

▪ People have been panic-buying toilet paper across the US even though there’s no sign of a shortage.

▪ Small bottles of hand sanitizer have been re-sold for $138.

▪ Packages of Lysol wipes that normally retail for less than $14 have been spotted on resale for $220.

What to watch:

There will be lots of steep sales. Consumers in general — and travelers in particular — who are willing to keep spending will find “bargains for the brave” (trips from New York to Miami for $51?!).

Price gouging will continue. Since ecommerce companies like Amazon and eBay aren’t equipped to fully police their platforms, price gougers will continue jacking up prices of essential items — and panicked shoppers will continue buying them (in some markets, security guards have been assigned to protect the TP).

4. Markets

Impact: The coronavirus has disrupted the global economy by causing producers to reduce output, distributors to interrupt shipping, and consumers to limit spending.

Response: Investor uncertainty led to a mass selloff of stocks that sent global indexes tumbling, ending an historic 11-year bull market. 

Some examples:

▪ America’s 3 major stock indexes had their worst day since 1987 yesterday.

▪ Oil prices had their worst day since 1991 earlier this week.

▪ Trading halted in the US this week when the New York Stock Exchange tripped a so-called “circuit breaker” to slow the sell-off. 

What to watch:

‘Safe’ assets will surge in popularity. Already, purchases of gold have increased dramatically. And, given the volatility of traditional stable assets like government bonds, investors might opt instead for other options like cryptocurrency.

National governments will step in. Japan’s government quickly approved a $4B stimulus package, and the US Federal Reserve plans to inject $1.5T into the economy to prevent further “disruption.”

5. Major Institutions and Events

Impact: The coronavirus made it difficult for large groups of people to gather safely in the same place, challenging the institutions of government, education, healthcare, and mass entertainment.

Response: Colleges and universities, local governments, and major entertainment providers all began developing new ways to serve large audiences without requiring in-person attendance. Solutions range from full-blown suspensions of operations (pro sports leagues) to complex contingency plans (voting systems).

Some examples:

▪ Colleges and universities cancelled in-person classes and moved them online, which could pose huge problems for students without backup plans: ½ of students at community college and about ⅓ of students at 4-year colleges suffer from food or housing insecurity.

▪ Major events across the world — St. Patrick’s Day parades across the US, Tokyo’s famous Cherry Blossom Festival, and Texas’ SXSW — have been cancelled.

▪ Local governments are debating whether to transition to “remote vote” systems for upcoming elections.

▪ Disneyland is closing for the rest of the month, and all of New York’s Broadway theaters are shutting their doors (until at least April 13th).

▪ The NBA, NHL, and Major League Soccer suspended their seasons, and MLB postponed the start of its season.

What to watch:

Online conferencing is set to boom. As doctors turn to telemedicine and schools turn to tele-education, the value of good online conferencing tools is clearer than ever.

Virtual reality is about to surge. Businesses that normally require in-person visits — museums, conferences, concerts, sports games — are losing revenue, which will likely inspire investment in virtual alternatives. Some museums in both America and China have already begun using live streaming platforms like Taobao Live to take “visitors” on virtual tours.

Data privacy will become even more important. As businesses ask students, patients, and customers to share private information across digital platforms, they’ll face even more pressure to keep that data secure.

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Latest headlines
  • The House of Representatives is expected to vote today on an economic relief package to ease the strain caused by the virus. 
  • The NCAA canceled its men’s and women’s basketball tournaments, leading to a wave of March Sadness. 
  • The XFL cut its season short
  • Kentucky, Maryland, Michigan, and Ohio shut down K-12 schools.
  • The Smithsonian shut down museums in DC and NYC, starting tomorrow.
Voices of Our Community

Insights from the front lines: How the outbreak is affecting your world

Our Trends community is full of entrepreneurs whose businesses are fighting serious headwinds as the virus spreads. We asked how their companies have been affected, and the contributions poured in.

Here are a few of their stories.

‘The numbers are staggering’

Natasha Miller’s company has already lost $100k in known business. 

That might not sound like a lot for an outfit that brought in $4m+ of revenue last year, but Miller knows it’s going to get worse. Her company, San Francisco’s Entire Productions, specializes in corporate events for companies like Uber.

She told The Hustle that her business had 178 events in the pipeline that would go to contract in the next few months.

“If I owned a company,” she said, “I would not be signing contracts for events until I know they can happen.”

Miller now expects her business to do about half of what it brought in last year.

“The numbers are staggering,” she said, and they’ll force business leaders to make hard choices. One thing she’s considering: contracts that are more open-ended, which come with more risk.

How can businesses bounce back? By banding together, promoting each other, and making use of mentoring resources, like the free program offered by the nonprofit Pacific Community Ventures.

‘We need them … to remain active so we can stay alive’

When those events get canceled, the consequences run downstream. Just ask Alex Bradberry.

Bradberry is the founder of The Sparkle Bar, a hair-and-makeup business in Scottsdale, Arizona. She noticed something as events in her area started getting called off: so did appointments.

“Clients are the lifeblood of The Sparkle Bar and we need them…to remain active so we can stay alive,” Bradberry said in a Facebook post. So far, she can’t quantify the hit to her business’s bottom line — but she’s worried about having enough business to support her 13 employees.

How’s Sparkle Bar adapting? By looking for new opportunities to shore up revenue. One of them: An online hair-and-makeup consultation known as a “virtual edit.”

‘Even firing someone who royally screwed up sucks’

Brent Hulderman is thinking big and small about how he can trim the fat. 

As the owner of Absolute Recovery, a repossession company in Charlotte, North Carolina, he’s been hoping to buy the property he’s leased for the last 5 ½ years.

He finally has a deal he’s happy with — but now he’s not sure he wants to part with the $70k he’ll need to do it. He’s scrutinizing expenses everywhere — even down to paper shredding.

With ~15 employees, he’s mostly out of day-to-day operations. But now he’s thinking about what roles he might have to cut back on. “Even firing someone who royally screwed up sucks because you know they have bills and a family,” he told us. “So doing it out of necessity is worse.”

‘Pressure is a good thing’

Brian de Groot’s business, Dispatch Custom Cycling Components, is seeing a surprising uptick: custom bike components are up 30% recently. Why? He chalks it up to warming weather and an increase in remote workers who want to “satisfy the distraction itch.”

Even so, de Groot is troubled by something larger — what he calls a lack of leadership in the business community. 

He says there’s an important distinction between “managing to a quarter” and managing for the long-term. “Short-term, I can see how some will suffer,” he said in a Facebook message, “but out of 2001 and again in 2008, we created some of the most amazing businesses of our time. Pressure is a good thing.”

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The Hustle Says

Everybody clap wash your hands. Check out the CDC’s guide to proper technique, here.

Flatten the curve. Wtf does that mean? Take. Protective. Measures. 

Know the facts — the real ones. Here’s a guide on how to avoid COVID-19 misinformation.

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Industry Spotlight

Coronavirus is a boon to… survival kit sales

While many businesses are struggling to hit revenue targets as the nation comes to grips with the coronavirus, one industry is booming: disaster preparedness.

But as Wired reports, the prepping industry was not prepared for a disaster of this scale.

There’s a survivalist brand for every style

But many of them are sold out of the products you might want.

  • For folks who love a good conspiracy theory, there’s Doomsday Prep. You can still order the Camo Bug Out Bag, which includes a 72-hour supply of food and water, along with a first-aid kit and sanitation supplies. The “Wise 2 Week Survival Kit,” along with several other popular items, are out of stock.
  • For outdoors lovers, there’s Uncharted Supply Co. Their bags sell for $350 – $500 and are equipped with survival supplies for 72 hours, including a tent, blanket, emergency food rations, and filtration masks. Founder Christian Schauf told Wired that the company is getting “Black Friday levels of traffic” almost every day.
  • For people who want cuter survival fare, there’s Judy and Preppi.

You’ve probably noticed there’s been a run on hygiene supplies…

… including hand sanitizer, disinfecting wipes, and face masks. According to Neilsen, during February medical mask sales rose more than 319% in dollar growth and hand sanitizer sales jumped by 73%. 

The survival kits don’t solve for a lengthy virus-related quarantine. But maybe the entrepreneurs in the house will bring us coronavirus isolation kits soon, replete with a 14-day supply of antibacterial everything, masks, medicine, and canned goods.

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Lean Into the Moment

Uncertainty is scary. We can find the unseen opportunity

Each morning I get a coffee and hard-boiled egg from the Working Girls’ Cafe, a small business near our office. The owner, Ajmal, started it in 1994 when he moved from Afghanistan. He gives me a free coffee every once in a while. Nice guy.

This morning Ajmal told me business is down 50% this week and he expects it to get worse. “But we’ve survived worse and came out stronger,” he said.

This corona thing is scary. I’m not really afraid of getting sick — statistically, I’ll be fine. It’s the uncertainty of everything. That’s what’s jarring.

But when I get out of my stupid little internet bubble and talk with people like Ajmal, I feel inspired. The Hustle audience is more ambitious than the average person, so not everyone will relate to this. But where there’s turmoil, a lack of resources, a lost battle — there’s an advantage, unseen opportunity, and a way to turn sh*t into gold.

I don’t know what the advantage is right now. But it’s there. And if we stay on the offense and look hard enough, we’ll find it. 

As a community, let’s try to lean into this moment. And if you have ideas, I have a Twitter thread here. Tell me what you’re seeing out there.

– Sam Parr, Founder & CEO of The Hustle

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Shower Thoughts

Lots of you are getting your WFH on, so here’s an extra-long edition of Shower Thoughts to help stave off the cabin fever. Good luck. 

1. An average 18 year old is 18.5 years old.

2. Your brain is slowly 3D printing your hair.

3.. Whoever put 2 L’s in “parallel” was a genius.

4. People with poor spelling create the strongest passwords.

5. When you warm up by the fire, you’re cooking yourself to a comfortable temperature.

6. If you’re dead long enough, grave robbery becomes archeology.

7. The tallest person to ever live has, at one point or another, been everyone’s height.

8. Discovering what mushrooms were safe to eat must have been one wild trip.

9. Placing hand sanitizers in elevators would probably increase their usage simply because people have nothing else to do.

10. TP’ing someone’s house is now an act of generosity.

Via Reddit

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Idea Guy

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