wiki.keithl.com/PostCorona - moin
From Crisis to Opportunity
BeavLib 338.9 Portfolio/Penguin August 2020
1964/11/03 NYU Stern School of Business, UCLA(BA) 1987, UCB(MBA) 1992
This book is not about the virus, instead it is about business and social change caused by COVID lockdowns, and the super-acceleration of the Apple/Google/Facebook/Amazon monopolies.
Galloway is a monopoly-buster, taking aim at Google/Facebook/Amazon, suggesting that Apple acquisitions could make it more competitive against the other three. He may have thought the same about the other three, when they were scrappy startups twenty years ago. He's a business prof, and Stern is a business; high-performance professors attract high-tuition students.
- xvi "Nothing can happen for decades, then decades can happen in weeks" -- Scottish MP George Galloway
- xvii Ecommerce grew from 6% in 2009 to 16% in 2019, then grew to 27% in the 8 weeks after lockdown.
- xix Between 2020/03/01 and 2020/08/01 Tesla market cap grew 3x, dwarfing all other automakers
xix During 11 boom years, 40% of Americans would have trouble covering a $400 emergency expense. Covid-19 recession lost 13% employment in 3 months, worst hit to <$40K households with 40% layoffs
xxi Chinese word for crisis is danger character plus critical juncture character (not "opportunity")
- xxii "Online alcohol sales up 250%" ... but retail sales have presumably dropped, misleading factoid?
- p6 Cash is King: companies with cash will acquire more assets, companies using cash to buyback stocks temporarily had higher stock prices but will fail when sales drop.
- p10 WHO Mike Ryan "Prefection is the enemy of he good when it comes to emergency management. Speed trumps perfection.
- p10 retail adage: your first markdown is your best markdown. Better to sell something at 80% of your budgeted price than wait another month to dump it at 60%.
p22 60% of >$100K jobs can be done from home, 10% of <40K jobs, hence disparate outcomes
- p24 first firm Prophet - brand ID religion - exited 2002. The services industry is prostitution minus the dignity.
- p33 Netflix "blue/iOS model" pay for content. Youtube is free if you don't mind data mining and the chance your children will be turned into white nationalists.
- p34 Tim Cook promised Apple won't harvest our data ... Apple receives $12B/y to make Google the default search engine for iOS.
- p37 Blue search ... Neeva. Amazon abuse begat Shopify (ecommerce platform, not a shopping center, sigh).
- p49 Bezos bought Jack Warner's Hollywood mansion.
- p54 HBO blunders led to Apple TV+
- p65 Pandemic ecommerce changes: Jeff Bezos pays for divorce ($150B) in 30 days.
p69 Predicts Prime offering testing at scale - not really, a $40 24 hour results PCR kit
p71 Predicts Prime Health - no
p74 rundle: recurring revenue bundle
- p86 Jobs built $600M Apple, forced out in 1985 for personality, returned in 1997, rebuilt Apple to $200B/y, stepped down with pancreatic cancer in 2011 and died soon after
p88 2013 VC Aileen Lee called billion dollar startups "unicorns"
p90 Pankaj Ghemawat: retail store profitability correlates inversely to headquarters distance
- p92 Softbank Vision fund, $100B invested, negative ROI
- p93 Yogababble: spiritual sounding language for IPO
- "ok boomer" millenials can't get ahead
- p126 disrupting higher ed - tuition fees increased 1400% since 1980, CPI increased 300%
- p129 Funded by student loans, $1.7T (auto loans $1.2T, credit card $1T), average student leaves with $30K debt
- p135 Harvard 4.6% admission rate, $40B endowment, $750M fy2020 shortfall, fills gap with waitlist
- p136 Cal State will do well ($6K instate tuition), small elites will fail
- p138 College towns have 25% to 75% average ICU capacity
- p140 International students 12% of enrollment, 28% of tuition
- p142 new media training for instructors
- p145 Galloway class was 160 students in auditorium, 280 on zoom, extra cost one more grad student assistant
About here Galloway goes full interventionist, government mandates to force Ivy League to expand. I'd put the onus on investors - Ivy league startup leaders and hires cost too much. Instead, use big data to find gems among all the rest, especially the new crop of Zoom students, and grow a cadre of future startup titans with a series of larger scale businesses. Provide continued value to those curated CEOs with new generations of selected millenials and zoomers, and later alphas. Guide them away from degrees in flower arrangement, focus them on profitable businesses that scale up, hire many, and benefit the world.
p170 cronyism - much the $2T relief package went to the wealthy, but legerdemain by Galloway. "US billionaires had increased their wealth by $637B" but as he outlined in previous chapters, that was due to the huge (and perhaps unsustainable) increase in share price of big companies. The dollar transfer did include a $90B tax cut, but ... did that create or destroy jobs? Most rich folks aren't Scrooge McDuck, their money is shares, and they strive to make share prices go up by increasing the productivity of their investments. If Covid puts airlines out of business, do airplanes parked in scrapyards increase our wealth more than airplanes that can be used again after the pandemic ends?
- Hard to say - perhaps there will be less business travel and more virtual travel (good thing, IMHO). Perhaps there will be more virtual tourism.
- p174 tax rate on wealthiest dropped from 71% in 1950 to 26% in 2018 - below the 60th percentile income tax rate. Hmm -- hard to say which approach creates more good jobs for the millenials. Jobs overseas often don't - but using tariffs to "create jobs" doesn't help. Dollars overseas return to the US to purchase US products. So the question is, how can those dollars purchase products that employ millenials? In an age of lights-out factories and offshoring, it's difficult to guess what WILL employ millenials with ego-degrees. My best guess is virtual tourism - millenials as camera-equipped surrogate tourists for wealthy Asians with better things to do than waste dozens of hours on airplanes and customs. Or more informally, video penpals for children, with machine translation between languages.
- p203 Corona Corps - hiring 180,000 out-of-work millenials as contact tracers.