The New Normal
This is a little hard to write, but has been swirling in my head. We’ve tweeted about it after the rough week (which I won’t bother recapping).
Once we’re past the COVID-19 pandemic period, and we are on the road to physical recovery, we will have to cope with the economic recovery.
That is going to take years.
Almost every country in the world is going to have a near-unprecedented slowdown in GDP, and need for bailout from their own government. The debt to help everyone get back to near acceptable levels again will be beyond staggering.
Add to that the facts of the debt bubble that is bursting, the extreme market losses, plunge in oil prices, pension and retirement losses, aging population, and you have more-than-likely something close to The Great Depression.
To be honest, I really dislike being this negative.
However, there are some bright spots to this situation.
For starters, every country in the world will be in roughly the same predicament. They will all be printing money and going into debt to help their citizens recover. It’s like a global reboot of the financial systems.
While we should see inflation in the US with all the money-printing, every other country is doing the same. Therefore, in relative terms, values might not change too terribly.
Some Companies Won’t Make It
Unfotunately, many companies just are not going to be able to come back from this, regardless of stimulus, bailouts, etc. Either they were so over-leveraged, or they are just in a particularly hard-hit industry like travel, food and beverage, or oil.
However, this time spent learning, researching, chatting online, forming ideas, will all lead to new companies that form. Some will form as a result of managing this crisis. Some will just be ideas cooked up by really smart people that are collectively bored and tired of watching the news.
The technology we have now is allowing us to continue to connect in so many ways. We’ve already seen collaborations via Twitter, Telegram, Discord, Zoom, and other tech tools, and we know these are going to be efficiently run companies borne out of necessity.
New Financial Systems
The previous financial crisis also produced Bitcoin, which has now been going strong for over 11 years. Of course, with the advent of Bitcoin and Blockchain technology, we got Ethereum and other Turing-complete chains that have Smart Contract abilities.
There are so many brilliant data engineers, programmers, financial experts, and other geniuses building the new Decentralized Finance ecosystem. This ecosystem limits fees and friction, causes disintermediation, and allows for more peer-to-peer, trustless transactions.
Our current trade system was built on top of the old financial system, which, in turn, was designed mainly at a time of much less interconnectedness, international commerce, international banking, and technology.
When we turn the engines of international trade back on, some of it might start to be built on, or at least use, financial tools that don’t require 3-4 intermediaries and 30-90 days to move money. Maybe they will be designed using smart contracts that pay in a stablecoin the moment the goods hit the port.
The decentralized systems that have been largely shut out of international trade because the incumbent players and systems have been too strong. However, as those incumbents have been turned off, or at least turned down, maybe the new kid can step in and help increase the efficiencies. That’s just what the world economy will need to climb back.
When the world resets, and we start to evaluate, there will unfortunately be many millions of jobs lost. Most of those will be due to lost revenue, bankruptcies, debt, etc.
However, so many new roles will be created, many of which we didn’t even know existed.
There will be such a need for designers, data engineers, programmers, mathematicians, economists, social media experts, UX/UI experts.
So many of those roles will be filled by independent contractors, that may be anywhere in the world. Right now they can be found in Upwork and Fiverr. When we bring the financial world together with the gig economy, we will see an even larger rise in the international gig worker.
Some of those people will found companies, or even be their own independent company – like financial engineers that can create an investment fund using Decentralized Finance tools, launch the fund, raise money, and do so all without leaving their home. They can be located anywhere in the world, and be any age, but we will be able to audit their result, custody our own assets, and feel comfortable about the investment.
Many of the newest technology and DeFi companies now are already distributed with regard to the geographic location of their personnel. This will be more widely adopted for more traditional business as well.
The current need to stay in place and work from home is showing companies that they don’t need everyone in the office to get things done. They are learning to use conference calling, online data sharing, task management, note taking, whiteboarding tools to work efficiently.
The new normal company might have several members of the team that are in various locations, and several that are not even company employees. They might also be very lean, relying on many contractors to perform vital tasks.
As some jobs or roles are eliminated or moved, there will be a need for those people to learn new skills in order to obtain employment. Fortunately, the current technology, and current horrible situation is forcing people to find new ways to educate, and to learn.
Someone in Wyoming will be able to learn programming skills necessary to land a job with a company out of New York, or even out of London, just by taking some online courses.
Where We Are
The world is in a really rough place right now, and it will get much worse in the coming months. If you’re reading this, you probably know the worst thing you can do is sit there, watch Netflix, and wait for everything to get back to normal. The normal you knew will no longer exist.
Best for you to start learning, find holes in the system, find teams that are aligned with you, examine inefficiencies, and start building the company that will thrive when we arrive at the new normal.