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The DL - Back to Work with Starbucks and Microsoft, What's Happening in VR, and PowerPoint Parties

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Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.
 
April 13 · Issue #43 · View online
The DL
Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.

This week’s issue has lessons learned from Starbucks and Microsoft on going back to work, what’s happening in VR right now, advice from First Round on how to navigate the crisis, and an invitation to a PowerPoint party.

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Going Back to Work with Starbucks and Microsoft
Wuhan traffic data
Wuhan traffic data
China lifted the lockdown over Wuhan last week, and people are going back to work. TomTom has some cool data showing traffic in Wuhan bouncing back from 0 to ~50% of the 2019 average last week, and other places (Shanghai, Beijing) in China are almost back to 2019 levels.

Starbucks and Microsoft both have large businesses in China, so last week they shared some of their learnings about reopening in China with the Seattle business community to help local business leaders prepare for the US to go back to work. Here were some of the highlights:

Starbucks
  • Initially Starbucks closed 80% of its 4,200 stores in China. Now, eleven weeks later, 95% of stores are reopened, though business and consumer behaviors are very different
  • Instead of a store being open or closed, they are thinking of opening as a “dial, not a switch.” (e.g., using different formats like drive through)
  • The four factors they look at when deciding to reopen a store are: (1) Local state of the pandemic, (2) Local government posture and orders, (3) Community sentiment, and (4) Store readiness
  • Starbucks believes we can’t return to “normal” until we have a test and survey technology that can be deployed quickly

Microsoft ☁️
  • Microsoft has been back to work in China for about a month, and they are up to ~50% capacity so far. This was their six-point plan for bringing people back:
  • 1) Bring people back in phases rather than all at once
  • 2) Support people who should or want to work from home
  • 3) Provide all returning employees and visitors with safety supplies and sterilized facilities
  • 4) Require employees and visitors to (self-)certify their health as they are re-entering
  • 5) Continue social distancing at work
  • 6) Refrain from business travel unless there is an extraordinary need
  • The three principles they wanted to share with the business community were: (1) we need common goals for bringing people back to work, (2) we need detailed guidelines but flexible implementation, and (3) private action relies on common, public infrastructure

What's Happening in VR?
Daily peak number of VR users (vrlfg.net)
Daily peak number of VR users (vrlfg.net)
Videoconferencing software is blowing up while people are stuck at home (Zoom grew from 10M to 200M DAUs in three months, and Teams grew from 32M to 44M DAUs in a week), and it looks like people are going into VR to escape quarantine, too.

The number of people in VR hit all-time highs over the last few weeks. Normally, there is a big spike every year in December, and this year that spike brought us to 10-20K daily VR users on Steam. Then on March 23rd, Valve released Half-Life: Alyx, and daily VR users tripled to 55K+.

These numbers are still relatively small, but there is definitely steady growth in the number of VR users every year. It’ll be interesting to watch if COVID-19 accelerates VR adoption and whether VR users spend more time in single player games or social experiences.

First Round's Guide to Navigating the Crisis
the "locomotive effect"
the "locomotive effect"
If you haven’t already read a dozen “how to navigate the crisis” articles, this one is really good. First Round pulled together all of the advice they’ve been sharing with entrepreneurs along with links to resources.
Here are some of my takeaways:
  • The average time from peak to trough in a recession is 12 months. Not to recovery - just until the bottom
  • Doing nothing is a decision. If you do nothing, you’re saying that things haven’t changed for you
  • Use a runway matrix as a scenario planning framework to think through things you can and can’t control
  • “Especially in a downturn, people want to give money to companies that don’t need the money.” Build a plan to reach cash flow positive
  • Imagine it’s 18 months from now, and you’re out of cash. What are the top five things you wish you hadn’t spent money on?
  • “Do everything you can to be fact-based in your decision making, but bring every bit of EQ you can to your leadership and execute with compassion”
  • Going through hard stuff brings people together. Take care of your team and don’t forget to celebrate them
  • Look for bright spots and reframe your mindset. What are the unexpected opportunities that have come out of this chaos already?

Other stuff Dan's talking about
🎉 PowerPoint parties - This actually sounds fun. If you have a good presentation topic, please let me know, and I’ll invite you to my PowerPoint party! 🥳
🧾 Start Small - What you name your Google sheet when you decide to donate $1.2B (28% of your net worth) to fighting COVID-19. Here’s the sheet where Jack Dorsey is tracking those funds (he’s donated $2.2M so far)
📉 “I would say 15” - Masayoshi Son’s prediction on how many of Softbank’s 90 portfolio companies will go bankrupt over the next few years
🎥 A paramedic’s photo diary - A week in the life of a photographer / parademic who works at a hospital in New York. Powerful, chilling photos

Please hit reply! (Or subscribe or forward!)
About me: I work as an investor at Madrona Venture Group, a Seattle-based venture capital firm that has been early partners with companies like Amazon, Smartsheet, Apptio, and Redfin.
If you have thoughts, questions, or comments, hit reply! If you’re new, check out some of the DL’s top articles from the last few months:
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