Preparing for a Pandemic Reset? Not So Fast: The Information's Weekly Newsletter

Going into 2021, certain themes were abundantly clear. Private and public tech valuations were climbing as wealthy investors ran out of places to put their money. Regulators around the world were tightening their grip on tech.

Consumer tech was finally taking off again, with audio and social media at the center. Crypto was too crazy to ignore. The SPAC boom would continue. And digital media giants like BuzzFeed, Vice and Vox would face moments of reckoning.

I suppose it is inevitable that the last two themes collided.

This week, Jessica Toonkel broke new ground in covering the SPAC deals for Vice and BuzzFeed, including (lower) valuation expectations from their peak. I personally believe these two businesses will be on very different trajectories when it comes to their future. But everyone in media will certainly be watching them very closely for signs of what is to come.

Stay tuned.

What to Prepare For After the Pandemic

As the U.S. vaccine rollout accelerates, companies are planning for life once we return to our offices and (eventually) our post-pandemic lives.

The media, and casual conversation, are quick to turn to what will be different: Fully remote work. No commuting. The end of physical retail. The end of cities.

But I’m not so sure we are in for such dramatic change. In fact, I see plenty of signs already that people and companies will revert to what was working for them before—with some exceptions.

Take California real estate, for example. While plenty of people have fled the San Francisco Bay Area during the pandemic, there are few signs of a meaningful exodus. San Francisco is still the most expensive real estate rental market in the country, according to Zumper, a site that helps people rent apartments.

This week, Google announced it was investing $1 billion this year in California office projects alone. That’s a big sum for a company that has already gobbled up much of the Bay Area—and it plans to invest $7 billion total in office space and data centers in the U.S. this year. It doesn’t seem to me that Google is planning for a major reset.

Then there are the conferences. When the pandemic hit, many people, including myself, were thrilled about the idea of never again attending a technology industry trade show like the Consumer Electronics Show. We could exchange the days of tireless travel for conversations that were easier done elsewhere anyway.

But big-business events are roaring back—and fast. Mobile World Congress, which has drawn more than 100,000 attendees, is set to start in Barcelona in three months. The World Economic Forum is holding a meeting in Singapore in August.

If you think about it, of course they are. The businesses behind these events can’t afford to let the world change. Their survival depends on the tickets, attendance, press coverage and sponsorships an in-person event draws. And so they are rushing back to the way things were as soon as it might reasonably be considered safe to do so.

The same logic applies to many other areas. Expect sports to be fundamentally different? There’s simply too much economic incentive tied up in the current system. Teams are going to want spectators back in stadiums, along with their tickets and spending power, ASAP. If sports remain intact, the traditional media business will as well—or rather the business will continue to evolve, but at the pace already set.

That will certainly be true for the film business, which has been releasing movies to streaming earlier and earlier. But it’s hard to imagine studios releasing films simultaneously in theater and online over the long term. They would just lose too much money in doing so.

What About Work?

The question of how much work will change after the pandemic is certainly the most polarizing, particularly among my friends and those I consult for advice. I think the last year taught us that many jobs can be done remotely but not necessarily that they should be done remotely.

And while many tech companies will allow some regular working from home, those companies will do it because they face fierce competition for technical talent, which is some of the best suited for remote work.

Remember earlier in the pandemic when a string of companies—Facebook, Twitter, Microsoft and so on—all announced their remote work plans in quick succession? I promise you they didn’t just coincidentally finish yearslong studies on the superiority of remote work the same week. They acted because they felt pressure from their employees to do so—not because remote work was a better model.

Those companies will stick to those plans because they have to remain attractive to the top candidates. And remote work will spread as the same pressure hits other industries.

But it’s hard to see remote work becoming the norm across American business. It’s just not possible for so many jobs. And there aren’t clear business reasons for companies to move in that direction. While you can save on real estate costs (at least those you haven’t already paid), you also incur new costs in supporting remote workers and, I believe, you lose out on a lot of business value that comes from collaboration.

There can be benefits to employees, especially those in the middle of intense personal and family commitments, in working remotely—but most employees enjoy sitting with their colleagues and benefit from workplace interactions.

Timing is obviously important here. I understand that even those bullish about a reset don’t expect to change things overnight. But so many of the trends people point to as likely to be different post-pandemic were already underway. Some tech talent was leaving the Bay Area for less expensive places to live. Businesses were shifting to the cloud.

Covid-19 has accelerated those changes so we’ve been moving faster up the curve. Has it shifted the slope of the curve? Well, that’s unclear.

Let’s also remember how very different the technology industry is from so much of the economy. For many businesses, the post-pandemic world will be characterized by an immense amount of recovery and rebuilding, not leapfrogging to a whole new way of doing things.

As for tech, the jury is still out—but keep in mind that publications have an interest in reporting on how much things are going to change. No one wants to read that things are going to go back to normal because that’s less exciting.

They won’t, exactly. But whatever transpires in the coming months and years will be an evolution, not a revolution. And that’s what everyone should prepare for.

Upcoming Events:

*New* June 9: The Information’s Fifth Autonomous Vehicle Summit

September 22 and 23, 2021: The Information’s 2021 WTF: Women in Tech Media and Finance Conference

This Week's The Information Articles:

• Amazon Expands Effort to ‘Gamify’ Warehouse Work by Paris Martineau and Mark Di Stefano
• TI Reality Check: Time to Talk About AR Audio by Mathew Olson
• Khosla’s Lawsuit Against Lime Shows Ugly Side of Aborted Acqui-Hires by Cory Weinberg
• Vice, BuzzFeed Facing Valuation Cuts in SPAC Deals by Jessica Toonkel
• After Bumble’s Stock Pop, Chinese Dating App Soul Seeks Billion-Dollar IPO by Yunan Zhang
• TI Reality Check: Mobile AR Isn’t Just a Stepping Stone by Mathew Olson
• Stripe-Like Valuation Jumps Are Becoming More Common by Berber Jin
• Twitter CTO: ‘We Need to Do Better’ by Kevin McLaughlin
• TI Reality Check: Why Duct Tape Is Still a Leading VR Accessory by Mathew Olson
• Zoom, Amazon Hired at Fastest Clip During Pandemic by Nick Wingfield
• Instacart Eyes Fourth-Quarter Public Listing, International Expansion by Alex Heath and Amir Efrati
• TI Reality Check: Facebook’s Ambitions for AR Interfaces by Mathew Olson
• Altimeter to Lead Plaid Deal After Scrapped Visa Merger by Kate Clark, Berber Jin and Josh Sisco
• How Singapore’s Sea Used Facebook to Become an E-Commerce Giant by Juro Osawa and Shai Oster
• The Information’s 411 — Katerra’s Shaky Foundations by Tom Dotan