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The DL - How Seattle Businesses Came Together to Fight COVID-19, Billionaires Hate Bailing Out Billionaires, Amazon's Site Redesign, and Why It's TIME TO BUILD

Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.
April 20 · Issue #44 · View online
The DL
Welcome to The DL, a weekly newsletter about tech, startups, and investing in the Pacific Northwest.

This week’s issue discusses how the Seattle region came together to fight COVID-19 so quickly, why billionaires hate the COVID bailout, Amazon’s site redesign, and why it’s TIME TO BUILD.

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How Seattle Businesses Came Together to Fight COVID-19
I think we should spend this entire conversation talking about COVID-19, and what’s very likely to be coming down the pike here in Seattle -Thomas Lynch, February 25th Fred Hutch Board Meeting

Fortune wrote a fantastic article last week on how Seattle came together so quickly to respond to COVID-19 in Washington. It’s a long read, but great look into how the tightly connected business community, public health organizations, and local officials worked together to share information and make rapid decisions.

Back on February 25, there was only one case of COVID-19 in Washington, but Trevor Bedford and others at the Hutch were so concerned about the COVID-19 threat that a last minute addition to the agenda became the sole focus of the Hutch’s board meeting.

Later that same day, Challenge Seattle, a group of CEOs of the region’s largest companies, held a dinner meeting where the president of Kaiser Permanente briefed the CEOs of Weyerhaeuser, Zillow, REI, and others on the COVID-19 threat. Afterwards, there was “absolute shock around the table.”

Five days later, Challenge Seattle hosted its first COVID-19 crisis call open to other local businesses, and many of the city’s largest employers like Amazon and Microsoft decided they should respond in the same way on decisions like work-from-home policies. Later that week, Microsoft, Amazon, and Expedia all announced their campuses were closed, but they would continue to pay vendors and hourly employees.

It is awesome to see the level of coordination and teamwork that has gone into our region’s collective response to COVID-19, and if you want to read further, there are more great stories about Starbucks, Boeing, Alaska Airlines, Nordstrom, and even Madrona in the full article.

Billionaires Hate Bailing Out Billionaires
A bunch of tech investors and CEOs are criticizing the COVID bailouts because the funds are going to help shareholders (i.e., the 1% who own 50%+ of all equity) at the expense of employees and taxpayers (who will foot the bill).

Here’s what some of them had to say:
  • Chamath Palihapitiya: On Main Street today, people are getting wiped out. Right now, rich CEOs are not, boards that have horrible governance are not. People are.
  • Bill Gurley: Let’s be candid. If you believe in business & capitalism, then there are zero circumstances where the government should bail out equity holders. $GM and $GS were mistakes. If the gov’t is the lender of last resort, they should own all of the equity.
  • Mark Cuban: If I gave a company money, I would want equity, preferred shares, warrants, whatever we negotiate. If they don’t like my deal they can go elsewhere. The same should apply for taxpayer money.

🤔 What do you all think?

CalPERS Called Out
What a great board room story. CalPERS is the nation’s largest pension fund, managing $370B of assets for California state employees and retirees. They invest in a bunch of different assets, including “left tail” strategies, which return a lot of money during black swan events.

Last month at the CalPERS board meeting, one of the board members asked their Chief Investment Officer:
Ben, can you tell me how our left-tail investments are performing? Are they performing the way we thought they would in this economic downturn?
Ben responded:
Yes, for any left-tail risk hedging strategy you’re referring to, they should perform well in this kind of a down market, as they were exactly designed to do. And from what we know most of these strategies are performing as anticipated.

Ben did not, however, point out that CalPERS exited their primary left-tail hedge a few weeks before the market crash and missed out on a $1B+ return. Quite an omission!

Then to top this story off, the board member who asked the question posted the story on Facebook! Probably not the best channel for board communication, so I’m guessing there are some other issues at play here…

Stop Buying Stuff on Amazon! -Amazon 😘
Actual photo of our living room
Actual photo of our living room
Amazon stock hit all-time highs last week, and they are selling so much stuff that they are literally redesigning their site to try to sell fewer items.

Hopefully these changes are permanent because Sarah and I buy way too much stuff on Amazon, and the longer quarantine lasts, the more stuff we buy (why are we getting so many white shirts? oh, for the tie dye kit…). Someone at the front desk of our condo building told me that we get ~800 packages a day (for 600 units), so at least we’re not alone!

Other stuff Dan's talking about
🔨 TIME TO BUILD - Marc Andreesen dropped a 🔥 blog post over the weekend, and you should read it! Really inspirational call to arms to not be satisfied with the status quo and instead invest in building the future
😷 Rt: the effective reproduction number - The most important metric for managing COVID, according to Kevin Systrom, the founder of Instagram
💺 Accidental ejection - Terrifying story for people who hate surprises. Also an unrelated but surprisingly interesting story on the world’s largest private air force
🏋️ Looking for dumbbells? - I’ve been looking for weights since quarantine started. These $2,700+ dumbbells from LV are the first ones I’ve seen in stock! (and they come with free shipping!)

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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