Tech in each section earlier than the Covid curve
The tech industry was ahead of the Covid curve from the start.
Faster than the public and even governments, tech companies were among the first to understand the coronavirus threat as early as early 2020 and respond with short-term measures. With the pandemic showing no signs of slowing until 2021, tech companies are also the fastest in making long-term changes to employee policies and priorities.
This may not come as a surprise, however, as they will benefit most from the digital world after the pandemic.
Respond to the threat first
As early as January, February, and even early March, many minimized the US threat from the coronavirus – sometimes compared to the flu – and the White House coronavirus advisor Dr. Anthony Fauci said there was “no need” to wear something a mask.
But the tech industry was terrified.
In mid-February, the venture capital company Andreessen Horowitz put up a sign in front of their office asking visitors not to shake hands. This emerges from a popular Recode article titled “The Tech Industry Is Afraid of the Coronavirus”. There were 13 Covid cases in the U.S. at the time, Recode reported, but professionals from Silicon Valley were already wearing high-quality masks and ordering hazmat suits.
In March, Sequoia Capital released a memo calling coronavirus the “Black Swan of 2020” warning companies to “question any assumption about your business”.
“In a way, business mirrors biology. As Darwin suggested, those who survive are not the strongest or the brightest, but the most adaptable to change,” the memo says.
The memo was reminiscent of Sequoia’s famous “RIP Good Times” presentation on preparing for the 2008 recession. A year later, the comparison seems even more accurate.
Tech companies were among the first to restrict their travel to China, cancel important live events, and send employees home. Companies with greater exposure to China like Apple may have been more aware of how the threat was about to hit the US
Live events fell like dominoes. Mobile World Congress, the world’s largest trade fair for the wireless communications industry, was canceled on February 12 after several large technology companies voluntarily withdrew due to Covid-19. At the beginning of March, Facebook, Google, Microsoft and Adobe moved important annual conferences to virtual platforms or canceled the live parts.
A few days later, on March 6, the city of Austin, Texas, South by Southwest canceled the annual tech, film, and music conference that is generating hundreds of millions in revenue for the city as coronavirus concerns become mainstream were.
Tech has also driven the move to remote working. In early March, Microsoft, Facebook, Google and Amazon encouraged employees in certain regions to work from home within a few days, if possible. Twitter made work from home mandatory on March 11th.
The Bay Area announced a “Shelter in Place” order on March 16, but New York, which was to become the epicenter for coronavirus in the US and worldwide, did not issue similar measures until March 22.
Tech companies have “a more nimble and flexible paradigm about what ‘work’ is like and how and where it’s done,” said Dr. Gregory Poland, founder and director of the Mayo Clinic Vaccine Research Group.
He also pointed out that many tech companies’ converted open-style warehouse would have been a “disaster” for Covid-19, spreading primarily through the air.
Poland and Raj Behal, chief quality officer of primary supply chain One Medical, said moving these companies to remote work has reduced the risk of community-level transmission.
Rapid action was “probably one of the main reasons California, especially the Bay Area, wasn’t an epicenter,” said Behal.
Several of the earliest Covid cases in the United States were in the Bay Area, and in early March California had the highest number of Covid cases of any state.
First accept the new reality
As Americans followed the rising case numbers and crouched in the spring, most of us still hoped the pandemic would be over by early summer, then Labor Day, and then year end. But tech companies had already adjusted to a much longer span of time. Even forever.
Back in April, Facebook announced that all live events with 50 or more people would be canceled by June 2021 – not until 2020. Next month, CEO Mark Zuckerberg predicted that 50% of Facebook employees would be remote within the next five to ten years The company can adjust salaries based on an employee’s new location.
In mid-May, Twitter and Square became the first major tech companies to allow employees to work from home permanently. Jack Dorsey, CEO of both companies, had long been an advocate of remote working, and before the pandemic, he considered moving to Africa for half a year.
Microsoft doesn’t go that far, but a flexible work-from-home policy was implemented in October that allows all employees to be remote less than 50% of the time. In addition, Microsoft employees can get manager approval to work full-time from anywhere.
Google this summer quickly extended its work from the Home Policy to July 2021. A “hybrid” return model is currently being considered, as internal surveys have shown that most employees do not want to come to the office every day.
First benefit from the new normal
The speed of the tech world in responding to the pandemic may not come as a surprise as it was best positioned to make the transition to a more digital world and benefit from the new status quo.
The world’s largest tech companies will come out of the pandemic even stronger.
Apple sold MacBooks and iPads in the spring at prices previously only seen on holidays, when people switched to work and stayed home. In August, it became the first company to reach a market capitalization of $ 2 trillion. In the fall, Apple made three major product launches to kick off a new super cycle of 5G iPhones, MacBooks with internal chips, and more. The stock is up nearly 80% over the year.
Amazon has been looking for new employees year-round to keep up with the rise in online orders. Since March, 275,000 workers have been hired and 100,000 seasonal workers have been hired to meet vacation demand. Third-party revenue on its annual Prime Day, postponed from July to October this year, topped $ 3.5 billion. Overall, Black Friday sales, which Amazon likely had a large share of, soared 22% year over year to a record $ 9 billion, according to Adobe Analytics. The e-commerce trend will continue to benefit only from Amazon, which is on the scale to meet demand. Amazon stocks are up more than 70% this year.
Google and Facebook proved remarkably resilient despite the advertising slump in the first few months of the pandemic. Google reported its first drop in sales in the second quarter, partly because it relies more on branded advertising than direct response advertising. However, by September 30, advertising revenues had rebounded, especially for YouTube, which was up 32% year over year.
In the third quarter, Facebook’s ad revenue increased 22% compared to 2019, even after the decline related to Covid and an ad boycott due to the company’s hate speech and misinformation policies. Both stocks are up nearly 40% over the year.
New winners also emerged from the pandemic.
The pandemic turned Zoom into a verb, adding over 450% to its population since the start of the year. The video conferencing company had a successful IPO in 2019, but in 2020 it became the default platform for people going to school, going to work and trying to keep their social lives going. In what seemed like a very short time, Zoom overtook competition from Microsoft, Google, and Cisco, forcing these companies, especially Google, to improve their own video communications products.
Peloton didn’t get verbal status like Zoom, but it was another big winner. In late 2019, people were mostly talking about the “Peloton Wife” ad, wondering if the bike could become more than a high-end accessory. In 2020, Peloton overtook 100 million paid subscribers and now expects the upcoming vacation quarter to be its first billion dollar quarter for revenue.
Despite the battered economy, 2020 was the biggest year software companies went public. Even Airbnb, put down early by the decimation of global travel, rallied enough to abandon its IPO later this year.
And the IPO pipeline will not dry up in 2021.
What was tech behind it?
The tech industry’s early ambitions to attack the coronavirus itself didn’t exactly hold off. For example, the contact tracing technology from Google and Apple never became popular. What is raising hopes and markets this month is the established science of vaccination.
Coronavirus misinformation may have been the only thing tech companies haven’t done fast enough. Although social media platforms have put in place policies to combat misinformation, they have struggled to contain its spread. Facebook groups with hundreds of thousands of members were formed to share conspiracy theories and organize anti-lockdown protests. Conspiracy films like “Plandemic” generated millions of views on YouTube and other platforms before they were shut down. Of course, these companies were not helped by the misinformation from prominent political figures like President Donald Trump.
Now we are facing the first winter and second year of the pandemic, as U.S. coronavirus cases averaged over 170,000 a week and the death toll exceeded 250,000.
The tech world was ahead of the curve in Covid – if only it could have done more to take the rest of us away.