Crises (like Coronavirus) Help Drive Innovation and Create Opportunities

To begin, by no means do I ever hope for natural disasters, plagues, or meteors hurtling towards earth at any time. But when they do hit, everybody pauses for a moment to consider their own mortality, and then they begin to think about how this will impact their lives and the rest of the world.

In the last two months, Coronavirus has gone from a few dozen cases to over 95,000 cases worldwide, with the larger scare at this moment being the growth rate outside of China. This has caused quite a panic in many places around the world (some more warranted than others). The US stock market took a 10% hit officially bringing it to pullback territory (but not quite recession) and other world markets have followed suit. Even cryptocurrency has taken a substantial hit as Bitcoin dropped from its 2020 high of $10,522.51 to $8,763.94 at the time of this writing. Cryptos were supposed to be a safe haven from the stock market. It seems that a 10% drop in the the world economy pulled cryptos down as well--lesson learned.

And that's the point. When bad things happen, we learn and that allows us to be better prepared for the future. Crises create problems, and problems drive the need for new innovation. During the Great Recession triggered by the housing market crash in 2008, e-commerce underwent some major changes and innovation. While growth slowed a little during the recession, innovation sped up and growth percentages after the recession were double what they were before it. Online shopping needed to become more efficient, faster, more trustworthy, and more dynamic. Many incredible companies were born during this time as the entrepreneurs of the world saw inefficiencies as opportunities.

When Hurricane Rita hit in 2005, I was living in Houston, Texas. Everybody lost their mind and tried to get out of the city at the last second, creating one of the worst traffic jams of all time. My family was one of the ones that decided to stay home and weather the storm. As it turned out, damage was minimal when the storm's eye turned away from Houston at the last minute and wreaked havoc in Louisiana instead. Houston definitely learned a thing or two about response management and was much better prepared when Harvey did hit the city dead on 12 years later in 2017. New problems arose and new opportunities to learn presented themselves.

I was about 20 at the time of Rita, and I had the opportunity to hop in the car with my father and zip over to Slidell, Louisiana with chainsaws, ropes, and hundreds of other people to go help clean up the mess. We pulled up to houses where large trees had fallen right through the middle of the house and split them in two. People were devastated by the destruction, but their pain was alleviated and friendships were formed as neighbors helped each other work through their trials.

We actually learn far more through failure and trials than we do when everything is going well. When something turns out wrong or different than we expected, we're able to adjust and improve so that we can perform better the next time. Coronavirus is testing many different organizations right now, ranging from local hospitals to border security, to containment procedures and governmental policies. They aren't making every decision correctly, but they are doing their best and they are learning how to do better next time. It's been a while since we've had a disease that has grown as fast as Covid-19 seems to be growing at such a large scale. While governments and health organizations continue to navigate these unchartered waters, many world industries are learning some things too.

With the epicenter of Covid-19 starting in China, the world's manufacturing all but stopped for 2 months. Dozens of major companies have slashed guidance for 2020 because of breakdowns in their supply chain and consumer purchases in China. Many companies manufacture all of their products in China and with shipments delayed by 2-3 months in many cases, these companies have to deal without revenue for that much time as well. Furniture, electric, and almost every other type of product company is now trying to figure out how to diversify their manufacturing to countries outside of China.

The travel industry is also struggling due to concerns about accidentally running into someone in another country with the virus and bringing it back home. Cruises are cheaper than they ever have been before due to the nightmare stories worthy of a motion picture script that carried out in real life on the Diamond Princess. More than 700 people became infected due to the close quarters associated with a cruise, and now the cruise industry can't hardly give away rooms on their ships. These companies are surely going to be working on isolation procedures, investing in air purification technologies, and learning how to create a safer environment for us all to enjoy during our travels. Delta has offered no change fees for flights booked this month in order to encourage travelers to stay bold in their plans for the future. They may find that this policy boosts confidence in airline ticket purchases and continue with this innovation even after Covid-19 is well under control.

Zoom Technologies (ticker: ZOOM) has more than quadrupled since January 1st of this year. I'm sure Zoom employees aren't dancing around the office excited that the world is being forced into more remote work, but they are grateful that they had the foresight to offer technology that allows businesses to operate even when we can't go to the office. Many global conferences like Mobile World Congress, Domopalooza, and Google I/O have been cancelled out of an abundance of caution for the safety of everybody. For people still meeting in person, elbow greetings are maybe more common at the moment than traditional handshakes. More companies may decide that a remote workforce is more resilient and efficient and may institute more work from home opportunities.

I've been in the world of augmented reality for 4 years now, and my company enables web-based AR to improve the online shopping experience. In many countries, people are unable to go to the store because they are asked to stay at home. People may also be afraid of going to crowded markets to shop where there may be danger of becoming infected from a careless sick individual. Augmented reality lets you shop from home and see products in your home virtually through your phone as if they were actually there. If world-infecting viruses increase in number and frequency, e-commerce will continue to grow and technologies like AR will naturally follow suit.

The world is heavily investing in new drugs and vaccines to fight Covid-19. With thousands of drug trials and experimentations underway, I have to imagine that new cures for other things might be discovered in the process (or maybe the plot to "I Am Legend" will play out). I received an email earlier today (see below) for a new startup competition in China with three challenges--1) optimization of clinical treatment programs and drug screening, 2) vaccine development, and 3) detection technology and products. Much good will come from these efforts.

If nothing else, crises cause people to take time to think about their own life and why it all matters. While this novel Coronavirus isn't as life-threatening as some may purport it to be for the general population, it certainly causes pause in many to examine what they are spending their precious time here on Earth doing. Maybe it will force some people to spend more time with their family; maybe someone will finally make that job change they've been putting off; or maybe someone will go on that bucket-list vacation to some exotic, far-off land.

Look for opportunity in everything.

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