Don’t waste a good crisis.

 

Look at business with perspective. Super point of view, from the frontier observation of new business practitioners.

Text | Invited Observer Qu Hui

Special Observer Qu Hui

As the Covid-19 epidemic spreads globally, people all over the world have, are, or are about to enter home squatting mode. Although there are dozens of vaccine projects in progress, scientists estimate that it will take as long as 12 to 18 months to be available at the earliest. More and more evidence shows that the anti-epidemic may not be one or two months, but may be a long-term anti-war of one or two years. Before an effective vaccine appears, the virus will coexist with humans for a long time.

Although such news is depressing, if it is true, it can only be accepted. Ray Dalio has a sentence in “Principles”, Embrace reality and deal with it.

Since the facts do not change with your thoughts, the sooner you accept the reality, the more thoroughly you accept, the more effectively you can formulate targeted strategies. This is true for both individuals and businesses.

Due to the weak response of the US government, the new crown has hit the United States immensely, not only in the fact that as of May 1, the new crown has been diagnosed with more than 1 million diagnoses and 60,000 deaths. 20%. In other words, since the epidemic, more than 30 million Americans have lost their jobs, more than 15.3 million during the 2008 financial crisis.

Although so many people are unemployed, an article on LinkedIn caught my attention-it lists companies that are still hiring heavily under the epidemic. I looked at it and found it very interesting. These companies can basically be divided into several categories:

Employee company classification

There is no doubt that the health crisis caused by the epidemic, in order to control the economic crisis caused by the shutdown of the whole country ’s residential homes, the negative effects of these two major crises arehuge. However, even under such a crisis, at least in the early stages, when the economy has not yet entered a full-scale recession, some industries are less affected and even benefit from it. In the long run, the changes in consumer behavior brought about by this epidemic crisis, and the industry niche vacated by some companies will also bring opportunities for development in some new industries.

I have summarized the five categories of industries that may benefit in the short-term and long-term in the epidemic. Non-academic research or investment advice, but a personal observation, and also contains a record of the life of the epidemic. It is likely to be rigorous and comprehensive. I look forward to throwing a stone and hearing your thoughts.

The first category: health and epidemic prevention

The industry that stands at the forefront of health and epidemic prevention is the most direct and obvious benefit after the new crown epidemic. You can hear their products mentioned in the daily news.

Manufacturers of PPE for epidemic prevention materials: For example, 3M, Honeywell, which produces N95 masks, has been in short supply since the outbreak. In the early days of the country, there have been masks between various provinces, and they have been staged among European and American countries. 3M has been beaten by the US media for giving masks to Canada first.

Companies that produce cleaning and disinfection products or provide cleaning services: During the epidemic, the disinfectant wipes and disinfectant sprays produced by Lysol and Clorox were basically out of stock in Amazon and Walmart. If you can brush a can, it can be said to be your lucky day (but you can’t drink it). After the epidemic resumes, the demand for disinfection and cleaning in public places will surge, and companies that provide such services will also benefit from it.

Relevant medical device companies: New York Governor Cuomo, located in the epidemic center of the United States, had a famous saying in the daily epidemic briefing: I wrote about the ventilator a month ago. I do n’t know, and now I dream about it in my dreams. In addition to the companies that manufacture ventilators, General Motors (GM) and Tesla have begun to transform their production lines to manufacture ventilators, and many start-up companies are repairing and reusing ventilators, or developing “forked” devices to turn a ventilator 2 to 4 etc. “

Related pharmaceutical companies: Whether it is antibody, drug, diagnostic kit, the new crown epidemic will directly benefit a group of pharmaceutical companies. American pharmaceutical manufacturer Moderna Inc. announced that it has delivered the first batch of new coronavirus vaccines, and the researchers will conduct the first batch of human trials. The news caused the company’s stocks to skyrocket, and CEO Stephane Bancel also squeezed into the ranks of billionaires.

HealthKang Home Appliances: Such as air purifiers, sterilization dishwashers, sterilization washing machines, disinfection cabinets, water purifiers, steam mops, household ultraviolet lamps, ozone meters and other small household electrical appliances related to healthy life >

Second category: Survival “essential” products

The “necessities” for survival here are quoted because they not only include the necessities in the traditional definition, but also include the products that may be defined as “must” by certain groups of people in the post-epidemic era.

Supermarkets, food, necessities: After the end of February and early March, after the US government began to look squarely at the epidemic, the American people also set off a vigorous stockpile tide. Costco. Costco is everywhere in long queues, so that a famous hashtag #costcocorona appeared on Twitter.

As for the things from Tun, from the famous toilet paper, sterilized paper towels, mineral water, various foods, drinks, etc., Wuhuamenmen. There was also a big brother who was photographed with four big boxes of Durex-Twitter users commented that “we all have our priorities” can only say that we have our own priorities.

In the category of hoarding goods, food and necessities, especially emergency food, are quickly out of stock. Mountain House, a best-selling outdoor food brand in the United States, still has a variety of freeze-dried foods out of stock. The advantage of these foods is that they do n’t take up space, and the shelf life is up to 30 days … no, month … no, year, 30 years … but I took a look at the category, what is the Italian minced meat thousand As for the pasta with cheese, Mark Ronnie, I would buy two more cans of Merlin luncheon meat and tempeh.

“ Survival of the End” product: In the process of experiencing the epidemic in the United States, I also found a group of people who had never been concerned before, “Survivor of the End” Doomday Prepper. Simply put, this is a small group of people who believe that the earth will be destroyed in various ways and continue to be prepared.

The National Geographic Channel published a documentary as early as 2012. In one episode, the aunt Donna Nash said that the world is likely to suffer a respiratory plague similar to the super-flu flu. A large amount of epidemic prevention materials are prepared at home, and the whole family often conducts epidemic prevention exercises.

This group of doomsday survivors has long been prepared to deal with plagues, earthquakes, volcanoes, wars, and even alien invasions. Their level of preparation varies, from the most basic home with some canned food, to the most exaggerated construction or purchase of “underground fortress” Bunker,In emergencies, you can evacuate inside. Entry-level bunkers are priced at US $ 60,000 to US $ 100,000. This is an extremely small group of people who are conscientiously prepared for small probability events. You may think they are a bit neurotic.

But it never happened that the New Crown Outbreak gave them a chance to prove themselves.

You never know, Sister Donna Nash ’s youtube video is full of eight years later, in 2020, netizens from all over the world throw their bodies and knees. It is said that the orders of many companies that manufacture underground forts are also scheduled for next year. So, I guess, the doomsday survival market will grow significantly after the epidemic.

Home defense system: Due to the epidemic, many people spend longer time at home, and because of economic turmoil that may cause crime to rise, the demand for home security systems has increased. Therefore, Home Security is also an industry that benefited from the new crown epidemic in the United States. The home defense here is a broad-based home defense, such as the traditional home security system ADT systems, smart doorbell Ring, smart camera Arlo and so on.

Dollar stores: Dollar stores such as Dollar General have always been regarded as “safe cards” in the economic downturn portfolio. In fact, it is not just this crisis. Since 2007, especially in the large non-major cities in the Midwest, dollar stores are very popular. Once a dollar store is opened, fewer and fewer people go to supermarkets.

According to statistics, the number of new US dollar store openings between 2007 and 17 in the United States was five times the number of supermarket openings during the same period. Far more than other types of retail. Speaking of which, it is considered the sinking market of the American version.

The third category: home life category (“Homebody”)

In the middle of March 2020, various states in the United States promulgated “Home Orders” one after another, and the American people who always like to go out have to start home life. In fact, various products and services that serve the home scene have existed before, benefiting from the epidemic usage and popularity have been significantly improved. In addition to the below mentioned, telemedicine, mobile payment and other industries have also grown, and I will not repeat them here.

Online entertainment: Contains streaming media (Netflix, Youtube), short video (Tiktok), social networking (Instagram, FB, Reddit, Nextdoor, Snapchat ’s latest quarterly report rose 40%) (Nintendo Switch is hard to find), virtual reality VR and so on. Not to mention, take my home as a small sample, California MarchSince the beginning of the “House Order” in China, such scenes have often appeared in our family:

  • While eating dinner, the whole family watched The Moonlight Club or “The Strongest Brain” on Youtube
     

  • After a day ’s homework, I played Roblox for half an hour
     

  • Lao Sun finished eating and Ge You lying on the sofa and giggled while watching Tiktok
     

  • In the afternoon I followed Keep to exercise while watching Vlog in Youtube
     

  • At the weekend, the whole family followed “Just dance” on Nintendo Switch to “Jiangnan Style”

    Home fitness: The home fitness representative Peloton, founded in 2012 in Silicon Valley, has grown rapidly in just a few years with a home exercise bike / treadmill + subscription live broadcast model. The amount reached one million, and it was just launched in July 2019 before the outbreak.

    Tracing back to the source, the American people ’s enthusiasm for fitness is extremely high, and their homes are also large. Some people have specifically transformed garages or basements into home gyms. During the quarantine period, my WeChat friends circle is showing cooking skills. Everyone is joking until they can fry the fritters. It is almost isolated; and I am posting fitness videos on Instagram. I think it may be almost until everyone can burpee.

    During the epidemic, in addition to Peloton, many new products and new trends have gradually emerged, for example:

    • The major offline gyms and yoga studios have launched daily online cloud training through Youtube Live, Instagram Live, and Zoom, and some have begun to charge fees. Many fitness bloggers on Youtube are popular, such as whether you know Pamela Relif by Daming Lake;
       

    • More home fitness products have emerged, such as Nordic Track, in addition to spinning bikes, there are treadmills, elliptical machines; such as Mirror: a mirror-like device hangs on the wall, which can turn the home into a A small sports studio, priced at $ 1,495, focuses on yoga, Pilates and other strength training. It looks pretty cool.

      And according to the survey, even after the epidemic has passed, many consumers will stillChoose to exercise at home, so this outbreak is very lasting for consumers’ behavior changes, which is also good for the Home Fitness industry.

      Online learning: Compared to the outbreak of the domestic K12 online learning epidemic, the transition to online learning in the United States appears to be poorly prepared, and the craze does not seem to be so obvious .

      In terms of personal experience, many domestic schools adopt the commercialized online learning products uniformly by the local government, so they can be rolled out quickly. And in California, where I am, since the beginning of elementary school suspension in February, teachers have started so-called “emergency online teaching”. They have always been teaching their own solutions and posted them in Google classrooms, although some apps and websites are useful, and There are regular Zoom teachers and students videos, but the whole is more about conveying tasks to students, allowing students to learn by themselves, and there is no good part of online “teaching”.

      In fact, there is always the option of “home school” for students in the United States. When you choose homeschool, there are many online schools on the market that can register to participate.

      During the epidemic, I studied one of the larger platforms called K12.com, which is also a listed company. Any age-appropriate American student can register for a local online public school through this platform, and it is completely free. Funding is provided by various public school districts in the United States. After registration, it will send students laptops, textbooks, and a fixed teacher for each class. There will be one to two hours of online live teaching time every day. At other times, parents need to help students complete other content of the day. The course includes language arts, mathematics, history, science, music, and second language options, which can be said to be quite mature.

      Why can’t the United States use such a mature online platform on a large scale during the epidemic to quickly roll out online education?

      E-commerce, fresh e-commerce and takeaway: During the epidemic, one can imagine that offline physical stores were suffering, and e-commerce ushered in a wave of climax. The following chart lists the comparison of the e-commerce sales category in March 20th and March 19th. In addition to the expected hoarding, you can also see the most popular activities during the isolation period of the American people: making bread, lifting Dumbbells, watching TV, feeding dogs, fighting puzzles … is it the world?

      Another industry that has greatly benefited from the epidemic is fresh food e-commerce. In fact, Amazon Fresh, Instacart, and Postmates have been in the United States for some time, but compared with China, the growth has not been very obvious. The new crown epidemic situation and the house order have given them a huge boost.

      But besides Amazon Fresh, several other companiesFresh food and take-out services are both gig economy models, relying on ordinary people to register as deliverers and go to supermarkets to buy meat and check out for buyers. Compared with the domestic self-built warehouse model, this relatively loose organization has caused many problems in the epidemic situation:

      • First, when the epidemic is serious, the number of delivery people is insufficient, resulting in sufficient goods in the supermarket, but the buyer can not order the delivery time;
         

      • The second is that there is no agreement and cooperation with the supermarket. If the supermarket requires queues to enter, control the number of stores, the delivery person needs to queue for a long time, or the buyer selects the goods on the App, it will often Goods;
         

      • The third is the difference in the ability of the delivery person to select the goods, the code of conduct is not guaranteed, and the replacement products will be extremely unreliable;
         

      • Fourth, the delivery person did not get enough PPE protection, the salary was not high, and many strikes had been organized.

        In the long run, individuals are still optimistic about the fresh delivery service similar to Amazon fresh, Weee, Yami, from supply to delivery, and through the entire supply chain. I also hope that the new crown epidemic will become an accelerator for this service.

        Fourth category: remote office and infrastructure

        Remote office is a type of 2B product that has grown rapidly after the epidemic. It was a domestic discussion hotspot in January and February, and became popular in the United States in March and April. Needless to say, the video conferencing software Zoom has experienced hundreds of millions of daily activities, and has been pushed to the cusp because of security issues. The stock price is also like a roller coaster, but it is one of the few stocks that has grown against the trend during the epidemic. During the epidemic, it was very common for adults to work in Zoom, children to take classes in Zoom, and the whole family to live in the Republic of Zoom.

        Remote work is not only a video conference, but also includes broad team collaboration tools such as Slack, MSFT Teams, JIRA, Dropbox, and products targeted at certain groups of people and vertical industries, such as the collaboration tool Figma for designers The whiteboard tool Miro is aimed at developers who just announced free GitHub for small teams.

        Although the home order in some areas is over, many technology companies have announced that they will continue to work from home. Slack announced that the break-in period for employees working at home has just passed and efficiency has improved, so they will not require rework. Amazon recently announced that its employees can Work from home until October 2nd.

        It is foreseeable that this wave of remote office will have a far-reaching impact on the future. It is not only limited to how to allow employees to work from home, but also as shown in the box CEO in the figure below, how to put online interaction with customers and supply chain ElectronicAutomation, so that the entire company ’s operations can be automated and digitized.

        Another type of 2B product benefiting from the epidemic is the hardware and software infrastructure that supports the entire home economy and telecommuting demand.

        For example, communication networks, audio and video clouds such as Agora, cloud services such as AWS, and some SaaS platforms. For example, Shopify, as a SaaS platform that supports 1 million online e-commerce companies, experienced an outbreak of growth during the outbreak. Its CTO tweeted that the daily flow rate of Black Friday is now doubled, and it needs to be expanded to recruit programmers.

        When everyone is panning for gold, those selling gold panning tools often make a profit without losing money. The epidemic benefits the home economy and remote office, and the hardware and software infrastructure providers behind these products are also the biggest beneficiaries.

        Do n’t waste a good crisis

        The new crown epidemic may completely change the fate of many people and lifestyles, and many industries. But for the five industries mentioned above, it may also be a golden opportunity. However, the help the epidemic has brought to these industries is different. Some are lasting, some are short-lived, some are reversible, and some are irreversible. Some are extremely critical to change life and death, while others are optional.

        I summarized the epidemic’s help to the industry into two dimensions:

        The first dimension is whether the impact of the epidemic is long-term or short-term. The supply of epidemic prevention materials and emergency food is in short supply, and will eventually pass, so it is short-term; while consumers switch from offline retail stores to online e-commerce purchases, and software products turn to cloud infrastructure. This trend has been before the epidemic. In the beginning, it was accelerated in the epidemic and will continue after the epidemic, so it is long-term.

        The second dimension is the product itself, is it currently a mass product or a niche product. The products that benefit the most are those that have the potential to become mass products, but are currently only popular in the niche market. Such products may take advantage of the so-called “gap” to spread in the mass market. For example, Zoom, Peloton, Instacart, all belong to this category, right product at right time in the right place, can be described as lucky, there may be opportunities for small companies to raid here, and a new giant is born. And if it is already a popular product, such as video and games, the epidemic can certainly bring a wave of growth, but this growth rate is relatively small, more like a fuel to the fire, and more biased towards games for large players.

        The picture comes from WeChat in the public account “There is sugar in the pocket”

        If you consider the above 5 types of industries in these two dimensions, you can see that there are two types of linesIndustry and products benefit the most:

        • The orange block in the lower right corner: these products solve the problems of the public, but they are currently in the early market. The online and automated trends brought by the epidemic can help them move towards the mainstream market, which may result New giant.
           

        • The blue block in the upper right corner: When some industries are shrunk by the epidemic, but the demand still exists, there will be new products or new formats of old products, and there will also be places here. Opportunities for raids.

          The picture comes from the WeChat public account “There is sugar in the pocket”

          As time passes, the new crown epidemic will always be brought under control, but the impact of the changes it brings may be more profound. Don’t waste a good crisis “Never waste a good crisis”, everyone can ask themselves: