Book review: Post Corona by Scott Galloway
Post Corona is an early version of the history of the past 12 months and a guidebook for the changes to come in business and society.
We’re still in the midst of the COVID-19 pandemic. It’s too early to predict the future of business and society but NYU Stern School of Business Stern Professor and serial entrepreneur Scott Galloway has made a good start in his new book Post Corona: From Crisis to Opportunity.
Galloway’s view is that the pandemic’s enduring impact will be an acceleration for technology, and no area of the economy will be left unchanged. The book and the case studies are all US centric but you don’t have to work hard to apply Galloway’s work to other markets.
Digital acceleration drives digital dispersion
E-commerce accounted for 16% of US retail in March 2021 and was growing approximately one percent per year. Eight weeks later it accounted for 27%. If your organisation sells a product or service it must have an online shop front. This rapid shift to digital, resulting from lockdown, is a fundamental trend that will have a fundamental impact on every area of society and business in the future.
The strong get stronger
After a fall at the outset of the pandemic in Spring 2020, all the major UK and US market indices quickly recovered and continue to climb. But the impact of the crisis has been unequal. The crisis paid out a premium in valuation to organisations with an innovation narrative while stocks in bookings, entertainment, airlines, cruises and resorts were hit 50-70%. Companies with cash and highly valued stock will be able to buy the assets of distressed competitors in the coming months and years.
An uneven crisis: societal division
The crisis has acted as a wrench on societal division. Middle class professionals in secure work have worked from home, saved money on commutes, seen equity and property investments rise, and stayed safe. People in public health, public service and frontline roles such as couriers, postal workers and supermarket staff have worked harder than ever on the frontline of the crisis. We owe them a huge debt. Freelancers and people working in areas of the economy that have shut down such as culture, entertainment, and travel have had an awful time.
The big four: Amazon, Apple, Facebook, and Google
Big tech has had a good crisis. Netflix replaced cinema. Shopify supported online retail. Zoom because the default location for personal and private meetings. Galloway calls out Amazon, Apple, Facebook, and Google. These companies have all become too big to fail and are characterised by their market dominance. He suggests that a breakup would fuel innovation.
There’s an interesting footnote for marketing services companies. Google (114%) and Facebook (174%) have both seen significant share price growth in the last five years. According to eMarketer they own 61% of digital ad spend. Meanwhile IPG (-9%), Omnicom (-24%), Publicis (-51%) and WPP (-65%) are all down. Its brutal.
Thoroughbred vs unicorn organisations
Galloway calls out VC funded organisations built on a dubious proposition and the premise of “fake it until you make it.” He reports a shakeout that is already underway. Using capital to buy market share isn’t a sustainable business model and it has failed completely during the pandemic. Galloway cites the example of Casper, an online mattress manufacturer that lost $349 on every sale. There are 175 mattress manufacturers selling online besides Casper. The company floated in February 2020 at $1.1 billion, equalling its pre-market valuation, and immediately lost 30% of its value in the first week of trading.
Higher education is broken
Education will be changed forever by COVID-19. The price of higher education has been inflated beyond any reasonable measure of value according to Galloway. Its value proposition of credentials, learning and a right of passage has been destroyed by the virus. Galloway suggests that the strongest university brands will prosper by increasing their reach via the internet while others will fail. He also suggests that technical and professional education will be disrupted by the organisations that are likely to be best served by training an empowered workforce.
Post Corona: From Crisis to Opportunity
Scott Galloway
Bantam Press (26 November, 2020)
