For the last two weeks I’ve been hanging out in Discord with an eclectic group of indie consultants from around the world. Together we produced a deck of 25 creative and unexpected provocations, ideas, and action frameworks to navigate the Covid-19 crisis.
Spend 5 minutes checking it out
On a slightly more personal note, I was introduced to Venkat in 2015, through his Breaking Smart essays. I was in Delhi, 2000km from my hometown working for a rich insufferable client and it’s reasonable to say that the essays were the best thing going on in my life at the moment. It just dawned on me yesterday that the idea of working on a project with him was not even a remote possibility in 2015. So here we are thanks to a pandemic, Discord and emergent collaboration.
The report was put together in two weeks, which speaks to the speed with which indie consultants can execute and the project management/sergeanting skills of experienced indies such as Paul Millerd who co-ordinated this project.
We had our first town hall yesterday and here are a few things that came up which I’m curious to explore as we work together:
25 people contributed to the project but most of my conversation were with Paul and Venkat. A ramp up in complexity and collaboration as we work on future projects would be challenging and likely will determine if Yak Collective succeeds in its mission.
It felt warm to see everyone in the community emphasize on deepening relationships. The voice chats we host goes a long way - the conversations usually have 5-10 people and are more intimate. It would be interesting to see if people would start to hangout in Discord chat regardless of the scheduled chat.
Don’t Waste the COVID-19 Reboot
Where I shamelessly riff on Underutilized Fixed Assets by Kevin Kwok where he writes:
Historically it’s very hard to find a successful marketplace that wasn’t built on an underutilized fixed asset.
Airbnb is a canonical example of this. Someone has a guest bedroom. It’s always there, a fixed asset. But it’s unused and they make no money from it. Until Airbnb, they may not even have considered that they could make money from it. And then suddenly, with Airbnb it generates hundreds of dollars for them. It’s like an ATM they didn’t know existed in their guest room.
With the COVID-19 reboot we have a new class of assets and potential energy sitting around that will create new marketplaces.
The Covid-19 Potential Energy 2x2
The reboot is essentially a blank canvas. We have to make a new narrative as we go from here and there are two types of assets have from the previous world:
Fixed assets such as land, infrastructure, equipment
Expertise such as a skill or asymmetric knowledge
New Markets
Companies that survived reboots of the past did so partly by being sensitive to changes around them and entering new markets using expertise and fixed assets. Such as DuPont’s shift to material science and manufacturing polymers in the early 20th century. We will see big and medium sized companies making this shift during the Covid-19 reboot.
Take the example of AMP. An Arts Fair event hosting company:
AMP's event building infrastructure includes the fabrication, shipment, and installation of a highly specific type of temporary wall and lighting system that allows for safe and efficient build in a variety of environments and structures. To date we have built over 600 events, tailoring our equipment, budgets, and timeline to the requirements of the space and the objective of the experience. AMP holds a nationwide inventory of walls and lighting systems with access to 85,000 linear feet of hard wall and 40,000 linear feet of lighting truss, and we build easily into both permanent and temporary structures, from 50,000 square foot tented, outdoor pavilions to 100,000 square foot convention centers as well as sports arenas, theaters, and multipurpose event and retail spaces.
AMP is now pivoting to using their existing infrastructure and expertise in designing spaces to build field hospitals in NewYork and other states that may be overwhelmed by Covid-19 cases.
New Business Model
We have seen some of this happening with restaurant supply stores turning into grocery chains. We have also seen the supply chain of toilet paper possibly change from being oriented to businesses to now being oriented to consumers.
As cities start opening up, a lot of the small businesses may not be opening up and a lot of the businesses may be irreversibly affected. Cinema halls are a good example. Average movie attendance has been falling consistently over the past decade and this may be the event that accelerates their death. The fixed assets of these businesses are underutilized assets with new marketplaces waiting to be created around them. for eg: Cinema halls could make the transition to become private screenings for hire for small groups. This will involve re-skilling employees or it is entirely
Businesses whose decline has been accelerated with the current crisis will shift to new business models utilizing their fixed assets
New Distribution
A lot of people with expertise and skills in specific fields are dependent on fixed assets such as schools, restaurants, bars, salons for their distribution.
With the loss of these fixed assets they would either have to reskill or change their distribution channel to be primarily online.
Avital Tours is an example of a potential aggregator distribution channel for chefs and mixologists who want a new distribution channel. They will be amateurs in this new channel and will need to learn the skills to operate in a new distribution channel. It may only provide supplemental income for a while but just like AirBnB now has an ecosystem of services around hosting, the really fertile markets will have services oriented around them when they mature. They will go from being amateur marketplaces to professional marketplaces.
It is also likely that we’ll see these individual agents form groups/unions to have a better collective position.
Invisibile Markets
The bottom-left is where you end up if your expertise or asset no longer has the demand it once had or it has become irrelevant. For example Satya Nadella recently mentioned on the Microsoft call that he has seen two years worth of Digital Transformation in the the last two months. This means that whole industries have undergone DT rapidly and businesses that have not invested in DT will soon become irrelevant - neither their assets or expertise is valuable anymore.
We are also seeing a huge shift into below the API gig economy from people who were unlucky to be caught in a situation where their current business model became irrelevant overnight. Without re-skilling and without fixed assets to put to use in other ways, there would be more people and businesses in invisible markets governed by algorithms over the next 6-18 months.