Tech Startups Are Key to Economic Recovery
The Startup Genome released this excellent analysis of policies they feel will help startups as well as for economic recovery. We tend to overlook startups since they don’t have (in some cases) an immediate effect on economic developed but that’s not actually true.
Last year, the global startup economy was valued at $2.8 trillion and growing over 10 percent per year, about three to four times faster than the rest of our economies [Startup Genome Report Page 3]. It’s these startups (like Zoom, Slack, Trello, etc.) that have fueled the growth and capacity for virtual/remote work. Technology startups are poised to reimage how we work, interact, help ourselves, and help others.
Right now, most startups have a few months of cash on had to survive. The prospect of additional investment is also drying up. The rationale that good companies will find money is a fallacy since it’s hard enough to raise funds during good times. Early-stage companies need money like your local cafe needs customers.
Healthcare, in particular, digital Healthcare, will be forever changed. The slow boil of the healthcare system to adapt telemedicine, digital platforms, Artificial Intelligence, and eCommerce is now a full-on rolling boil spilling out of the pot. This has the normal cast of characters related to privacy, security, and efficacy.
The recommendations on polices to help startups revolves around the five policy recommendations [Page 5].
- Design for Immediate Flow of Government Money to Startups
- Do Not Expect VC firms to Lead and Spread the Money
- Do Not Create a New Instrument or Trigger New Terms
- Align Investor Incentives with Those of the Government
The first five pages are worth a read to better understand these five recommendations. If you just want the nickel tour, then I’d summarize it as follows:
The government needs to invest in startups as it did in big companies during the last recession except being more flexible in investment criteria and use of funds (e.g. act more like a super angel investor).
Jobs and Business Support
- FDA Approves COVID-19 Home Specimen Collection Kit: Laboratory Corporation of America (LabCorp) is the first diagnostic test developer to receive approval from the US Food and Drug Administration (FDA) to market an at-home specimen collection kit for COVID-19 [Dark Daily]. Home testing, while not fast, will be a big boost to capacity and confidence since if some test from fort living room, then those than can will.
- The End of the HQ: I saw two articles about this. One from Sifted and one Reuters. Both comments on European real estate The one from Reuters titled was Barclays CEO says ‘putting 7,000 people in a building may be thing of the past’, says a lot about how companies will reimage their brick and mortar. Startups are thinking the same thing. The line even before the shelter in place was “Customer Acquisition Costs (CAC) is the new rent.” Big implications for office space, especially with the shift to digitally-native brands.
- Fast Grants: Get money to study COVID-19 fast. Great idea but it’s now out of money.
- Coronavirus Resource + Recovery Center for Small Businesses: From alignable, which is a small business LinkedIn. ~25,000 San Francisco Businesses are on it.
- ‘Zoom-bomber’ hijacks Gilroy meeting | Gilroy Dispatch: Technology is great but it has a dark side. The trauma we all are going through is made worst for kids.
- For the First Time Ever, Minors Make Up Half of Visitors to National Sexual Assault Hotline: For kids that are abused “stay at home” does not mean “safe at home.” We’re going to need to plan for ramping up mental health services as soon as we can.
- Most Americans are not willing or able to use an app tracking coronavirus infections. That’s a problem for Big Tech’s plan to slow the pandemic. It’s also a problem for seniors and the poor that don’t have smartphones (1 in 6 American’s don’t have them). Just over half of the 65-year old set has smartphones. Rates are even lower for those over 75. The one other issue is Google and Apple are behind it. This makes folks nervous.
- Governments, Don’t Let your Startups and Scaleups Die: Startup Genome analysis of policies to help startups. Details are in the summary.
- Outbreak Science: Modeling along with risk assessment/mitigation will go a long way to plan for these disruptions so the hit to economic development can be accounted for.
- The Speed Premium: This pandemic has exposed weaknesses in our ability to respond quickly to the world’s most pressing problems. But the speed at which some of society’s most ambitious projects have been completed provides hope, suggests Stripe CEO Patrick Collison.[From Trends]. What he’s talking about is this list on his personal blog about how fast some things go. The sad part is the Muni Van Ness line schedule of 7,000 days. Treasure Island only took ~700 days.
Things to Ponder or Give a Try
- Mindfulness: Take time every day to do something that calms and centers you. Something that recharges your batteries so to speak. It could be medication, a walk, practice music. Whatever it might be. This link has some free apps if you’re into that.
- How to Stay Creative in Difficult Times: Joanna Penn and Mark McGuinness talk about creativity and working from home. The best part is Joanna’s intro where she talks about how her whole routine got upended and what she did about it.
- ImmuneCorps: A volunteer army of the young and the low-risk helping people in need. This would never have existed during the last downturn.
- Talent Exchange: Helping workers impacted by COVID-19 connect with the right jobs. Power by AI no less.
Want to Learn More or Help?
Go over to the COVID-19 Economic Recovery Task Force (ERTF) page for more information. If you have not already done so, please take this survey to tell the task force your thoughts on how we can recover from this.
The Task Force is charged with guiding the City’s efforts through the COVID-19 recovery to sustain and revive local businesses and employment, mitigate the economic hardships already affecting the most vulnerable San Franciscans, and build a resilient and equitable future.
If you have anything you’d like me to include in future updates, feel free to send them along. If someone forwarded this to you, you can email me and I’ll put you on the list.