Trends Accelerated by Covid-19

Covid-19 has led to significant changes in how we live, work, and interact with each other. In some cases, they have accelerated trends that were already in motion, and in other cases forced changes that we did not anticipate or expect.

In the next few years, I think we will go through a rapid pace of innovation and re-imagination powered by entrepreneurs, and here are a few trends I’m excited about and interested in exploring further.

Distributed Work

The best summary I’ve read on the acceleration of distributed (not in person) work is this one from the CEO of Automattic, Matt Mullenweg where he talks about change happening slowly, and then all at once driven by this catalyst. Automattic has been fully distributed since its inception, and Matt has been a champion of distributed work for years and the benefits of accessing a global talent pool, and working asynchronously.

The #WorkFromAnywhere Podcast series led by the folks at Greylock is also excellent and CEOs of companies like Box, Quora, Okta, Figma and Zapier speak about their transition to working from anywhere.

I’m particular excited about the tooling that will be developed, both in terms of specific software as a service products to drive much better distributed collaboration, but also the underlying plumbing that ties all these tools together.

ECommerce

This article from Ben Evans on the growth of eCommerce is a must read. The UK went from 20% to 30% eCommerce penetration and analysts say that Covid has accelerated the growth of eCommerce by 5 years. This is dramatic, and will change the way may of us purchase, discover new products, and how creators distribute their products.

This also changes the nature of distribution/logistics and the entire supply chain. Companies like Shopify and Amazon have doubled their market cap (adding over $60BN, and $850BN (!!) of value respectively to shareholders since mid March 2020).

Major Cities

The nature of major cities and concentrated urban areas is going to evolve. I wrote about my thoughts on megacities recently here, and I also liked this piece from Fred Wilson about how a reset was much needed in NYC and how the city could evolve into something better. Many of my friends have ‘accelerated’ moving to their ideal living areas and and left places like NYC and London. My wife and I, having just had our first baby, are asking ourselves the same question – is it worth staying in NYC if we don’t intend to stay longer term? The pandemic has forced a conversation we likely would not have had for a few years.

Flexible Work

I believe that the best creators and experts are no longer going to need a ‘normal job’ and will be able to work flexibly and monetize their unique skills talents much better than before, and this will be socially acceptable and maybe even celebrated. I like the writing from Li Jin (Atelier Ventures) about the Passion Economy and Unbundling of Work from Employment (which I also opined on here).

Startups will create innovative tools, and platforms to help craftspeople to discover projects, collaborators and showcase their work (e.g. Contra). Much of the benefit that we get from a ‘normal job’ (e.g. competitive healthcare insurance plans, retirement accounts, etc) will also be available to creators through saas products.

Building Relationships

As humans, we yearn to build new relationships and deepen relationships with folks that we already know. Traditionally we’ve built these relationships in person with repeated interactions and meaningful collaboration on projects. Being forced into lockdown has forced us to explore alternatives.

I’ve personally been experimenting with platforms like Enrich (curated network of similar executives), Fractal (1×1 matching with other product people), Village Global Events (with startup founders and investors), and am starting the On Deck Angel Fellowship soon. These are all digital communities with fairly niche audiences, which I think will become more common.

I’m hoping that these will lead to meaningful relationships and collaboration and also improve the chance for serendipity despite not being able to spend time with folks physically. I’m excited that these platforms could open up the possibility of meeting interesting people all over the world, and not just limited to my place of residence.

I’m not sure how this will play out with larger conferences, where most of the value is in relationship building and improving the probability of serendipitous connections often through extended hang out time (often over meals and drinks). I expect that recreating much of the value will be possible, but will require some first principles thinking.

In my own recent experience, I wrote about how the funeral for my grandfather was actually much more inclusive and rich because it was virtual and allowed for more people to attend that were close to him (like his sisters).

Personalized Services

Folks who provide coaching, classes or specialized services are all going through a similar, accelerated transition.

Companies like Peloton have successfully taken spin classes and made them virtual, allowing both synchronous and asynchronous (on demand) classes with world class instructors. Each class can now be attended by step function more people which greatly improves the ROI for each class.

Experts providing specialized, personalized services like physiotherapy, child psychology, lactation consulting can all increase their addressable customer base and people who are in need of very specific services can access a larger pool of specialists which is better for both groups. They both need tools to make it easier to discover each other, and improve the experience of booking and transacting (e.g. Ribbon Experiences).

Digitial Payments and Services

Digital payments and digital services (e.g. digital hr, or payroll) to help businesses transact with their customers and run their teams will also see more new users, and increased adoption. I think these products will be ultimately sticky even after Covid-19 because they function better both in person and remotely, and allow for more flexible customer and employee interactions. In my personal investments in these areas I’ve seen increased volumes and good retention through the pandemic.


These are just a few areas where I’ve personally observed changes in my own life or with folks close to me, and I’m excited to learn more and closely track how these trends evolve.

Unbundling your job

Why do we have jobs? Jobs provide us with a bundle of many things, which is why they’ve been around for so long:

  • Predictable cashflow: cover lifestyle costs, plan for the future
  • Benefits: 401k retirement accounts, health and life insurance, paid time off, access to new capital such as mortgages
  • Purpose: creative outlet, sense of accomplishment, contribution towards something bigger than yourself
  • Identity: personal and company branding, access to opportunities and people that would not otherwise be attainable
  • Social Interaction: friendships, human contact, collaborating with others towards a shared purpose

I’ve been starting to lightly consider what it would look like to unbundle these components of work, particularly the predictable cashflow component. Are there other vehicles that might provide a better source of predictable cashflow that we don’t typically consider investing in as ‘normal’ retail investors?

A couple of areas that I’m starting to explore, beyond dividend focused public markets investing are below:

1. Franchises: one idea could be investing in / running franchises which can have quite low initial investment costs, fast payback periods and decent margins which can lead to predictable cashflow. You would need to diversify the type of franchises to invest in so you’re not over-indexed on specific sectors e.g. boutique fitness or fast-food.

2. Real estate: a diversified real estate portfolio which focuses on yield is another interesting avenue – I’m currently exploring fundrise and potentially cadre to learn how each of these work.

This is currently just in the idea stage, and I’ll publish more on this if/when I develop my thinking beyond this initial idea.

Early thoughts on distributed work

I recently joined Automattic which is a fully distributed company. We have ~900 people (in all functions) working in ~70 countries, with no central office. We are one of the largest, if not the largest fully distributed company in the world.

I wanted to share some of my thoughts about the advantages and challenges of distributed work after two months – both strategically and from a practical implementation/execution perspective.

One very important principle about Automattic is we are set up to be a distributed company and all of our internal process is designed with distributed teams as the default state. This way, folks that are remote are not ‘2nd class citizens’ but are the core of the company.

Advantages

  • Work from anywhere: Our people can live and work from wherever they want, which ultimately leads to happier employees that stick around longer.
  • Work when most productive: People can work when they feel most productive and manage energy, not time (one of my fave articles) taking into account their personal constraints (e.g. family) into their schedule. Managers, however, have a bit less flexibility.
  • Custom work environment: Some folks like others around, others prefer a quiet environment, others like to move around. At Automattic, people can set up their environment to suit their unique style which is very hard to achieve in a traditional office.
  • Everything is documented: We document everything using our internal blog system (called P2) and folks can always go back and find out the ‘why’ behind decisions. This is very powerful.

Challenges

It’s worth noting that these are currently a set of initial observations for challenges, and I’m sure there are a number of good solutions to them which I’ll be actively thinking about as part of my work at Automattic. 

  • Onboarding as a new employee: Onboarding requires getting to know the right people (and building trust), learning the right systems, and developing the right judgment to know where to focus. Doing this remotely can be a struggle.
  • Building relationships: It’s easier to build bonds with people in person. Nuance is lost over Slack and Zoom and there is no substitute for time in person together. At Automattic, we have meetups to help build relationships but it increases the amount of time and ‘deliberate-ness’ required to get to know your colleagues.
  • Finding product-market fit: In the earliest stages of finding product-market fit, iteration can be slowed down because of async, documentation heavy nature of our work especially if vision is shared among different people. This is an area where I feel there are lots of areas for opportunity to improve with more frequent synchronous interactions. 
  • Changing direction: It’s much harder to get alignment and inspire towards a different strategic direction via text and video. It’s harder to recreate ‘energy’ and velocity in a distributed environment.
  • Separating signal from noise: We are a large team (900+ people) and there is a lot of content that is created daily.I’m spending about 15%+ of my day parsing through posts and comments to figure out what I should read, participate in, or make decisions on and as a new person it can be difficult to know where to focus. More experienced distributed workers have similar issues, but they are less pronounced, which shows that this is a somewhat learned skill.
  • Time zone management: It can be difficult to run teams across different time zones but there are also opportunities to increase velocity by folks working over a 24 hr period.