Which COVID Economic Changes Will Be Lasting? ft. Noah Kagan

Our lives have changed drastically. Many people are asking, ‘When will things go back to normal?’. However, what exactly will the ‘new normal’ look like, and will it be so different?

To explore what changes are here to stay and what will go back to ‘normal’, Dan and Ian played a game called ‘Yay or Nay’ with Noah Kagan. Here’s how it went: the three of them set the hypothetical date of January 1st, 2021 and asked each other which big changes will continue right up until that time. These thought exercises are fun, but they go beyond entertainment. They can help us think through best preparing our businesses and our lives for the uncertainty ahead.

Here’s the full video interview with guest Noah Kagan

Question 1: Will retail America bounce back? (7:58)

One of the first effects of the ‘Coronavirus quarantine’ was a contraction of office space and stores being forced to close.

  • When it’s safe to go shopping again and work in an office together, it’s unclear whether or not the general public will go back to these spaces. Good opportunity for a quote here about WHY
  • There is an opportunity for business owners to negotiate their leases and contracts. But, on the other hand, many business owners may be asking themselves what kind of return this kind of space is actually giving them and whether it’s necessary at all.

There’s a possibility that much of this available retail and office space could be used again but in a different setting. Maybe it will be repurposed and used on nights and weekends, not just in daytime hours. The 2008 recession gave birth to Airbnb, Uber, Stripe, and Noah’s company, AppSumo. All these companies used the constraints of a downturn to completely change how business was done in their industries. Similarly, retail space may have the opportunity to completely transform how they do business.

Question 2: Will there be a continued interest in frugality and saving money? (13:03)

People are facing ‘forced frugality’. They no longer have the ability to purchase freely as they once did.

  • This restriction is caused by stores closing and many products being out of stock. Consumers can no longer spend their money where they used to and instead must go without, seek substitutes or find a DIY option to solve their needs.

Will consumers continue their frugality? Probably not since American culture is very much consumer driven and citizens will find a way to spend money, even if the traditional ways have changed.

Question 3: Will the ‘Work From Home’ trend continue? (16:15)

For the companies that are enjoying the reduced costs, they may find a way to continue this trend and evolve into a remote company.

  • Their employees have also now had a taste of remote work and are liberated from commuting and having fixed schedules. This gives them more time with family and friends, and for hobbies.
  • It’s highly probable that after regaining their lives and time, these newly remote workers will want to continue to enjoy these benefits, even if they see the value in coming together with colleagues in person from time to time..

There’s an important distinction between companies that are allowing ‘Work From Home’ and those with a ‘remote-first’ culture. The transition to remote work proves difficult for some teams, while others adapt and thrive. If companies can help their employees with remote culture and tech adoption, there’ll be lasting change. If companies don’t give the employees the tools they need to work freely from anywhere and support them, then they might as well be at the office having some fun with their coworkers.

Question 4: Stopping international travel and attending business conferences? (25:55)

Many of us are feeling restless to get on the move again, but will this be possible by 1/1/2021? When can we meet in groups of hundreds of people again?

  • If improved testing, treatment, and of course a cure to COVID-19 are developed, these things will likely return to as we once knew them.
  • However, many people responsible for events and important business meetings will be rethinking whether or not all this traveling and gathering is necessary or responsible.

For events that are purely informational, they may still continue to be done completely online next year. As for networking and social events, our sense is that there is no real substitute for ‘in person’ and these will still go ahead, albeit fewer and with less handshaking and more handwashing.

Question 5: Will this be used as an opportunity to start an online business or a side income only? (29:44)

As millions of people start to work remotely for the first time, a world of possibilities is being shown to them.

  • This is a moment in history where a big percentage of the population is being turned on both to remote work and the ability to work for yourself, some of it out of necessity as people lose their traditional jobs. They are realizing for the first time the amount of work that can be done, and the impact they can have, with only a laptop, some web applications, and a wifi connection.
  • Businesses being forced to move online and adjust to the constraints of this recession will also lead to innovation, just as the 2008 recession led to new companies and a generation of remote entrepreneurs. Local businesses need to work to seize the opportunities offered by new technologies.

Question 6: Will people continue to want to get out of the city? (33:40)

Cities are not ideal places to sit out a pandemic. Most people facing quarantines and living in tight spaces are wishing they were in the countryside away from people and potential infection.

  • Will this desire for wide-open spaces continue? When you live in a city, your world exists outside of your apartment. The city entertains you and it’s where you live your life. Right now, the city can’t give this to you. Once it’s safe to move around again, it’s very possible that things will go right back to where they were and people will enjoy their small apartments knowing that it gives them access to all the excitement of the city.

But many are in cities not for its excitement, but for the opportunities. In relation to this, Dan recalled a quotation, “The core virtues of a city is it gives you access to strange.” But in this modern world, ‘strange’ can be found elsewhere. The internet and online exploration can, in some ways, replace the excitement and new experiences that a city alone may have given you in the past.

Question 7: Will we come up with new ways to greet each other? (37:45)

Will those who live through the COVID-19 era be known as the ‘Purell Generation’? Will they be remembered as washing hands and being extra careful when coughing? Probably, but they may also be known for changing how we physically greet each other.

It’s possible that in the year 2021, not wanting to shake hands or greet some with a physical touch will be common and accepted. However, our cultural habits are deeply ingrained. Changing them will take years and but maybe, just maybe, touching will become more precious, saved only for those we know well and care about the most.

What are your predictions for January 1st, 2021? Let us know what you think a post quarantine world looks like in the comments below!

 

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