The author of Post Corona, From Crisis to Opportunity, is Scott Galloway. He’s a professor of marketing at NYU’s Stern School of Business, a serial entrepreneur, and a well-known blogger.
The book begins with two theses. First, the pandemic’s most enduring impact will be as an accelerant. It will speed up many things that were already occurring. Second, in any crisis there is opportunity, the greater and more disruptive the crisis, the greater the opportunities. The author says that his optimism about the second point is tempered by the first—many of the trends that are being accelerated are negative and weaken our capacity to recover and thrive in a post-corona world.
Ecommerce really started about 2000. Over two decades, ecommerce had grown to about 16% of all commerce. In the first eight weeks of the pandemic, this jumped to 27%. It is unlikely to go back. With most trends, the author estimates that the trend has accelerated from 2020 to 2030 in a few months., even if your company has not.
The pandemic has affected companies very differently. While big tech has thrived during the pandemic, most retailers and restaurants have been going bankrupt. Much of this was a tale of the strong get stronger. Uber has done well while Hertz went bankrupt. Uber ‘borrows’ its cars from its drivers while Hertz owns its cars. Most retail has suffered while Costco has thrived.
Working from Home (WFH) has done better than expected. Most experts thought that productivity would be way down, but it has actually been up, according to the author. (Patrick Lencioni says just the opposite.) Of course, there is a downside. If you can do your job from home, it might be done by someone in South Dakota or Bangalore.
The author wrote a previous book called The Four. The Four are Amazon, Apple, Facebook and Google. He then adds Microsoft to this group. While the stock market overall has done well during the pandemic, it is really these five companies that are responsible for this. These five companies make up 21% of the value of all publicly traded U.S. companies. These companies are unregulated monopolies; the antitrust laws have not kept up. These big companies maintain their positions by innovation, obfuscation, and exploitation.
The author says The Four have monopoly/duopoly power and cheap capital, making them difficult to challenge. But there are plenty of smaller companies/industries to disrupt. The signs are industries with big increases in prices without increasing value. This is known as unearned revenue. Higher education is the poster child for this.
The disruptibility index for higher education is off the charts, according to the author. In the past 40 years, tuition has increased 1400%, while the product has changed hardly at all. Gross margin is over 90%. How can they do this?
At the elite institutions, they use scarcity. The acceptance rates for the best schools are between 4-10%. This is not because the applicants aren’t smart or good enough. They do it to maintain their margins. Part of this is due to public funding being decreased virtually everywhere.
These crazy prices are supported by federally guaranteed student loans. Student loan debt in the U.S. exceeds that of credit cards and auto loans. The system is also highly skewed towards the wealthy.
The biggest brands—Harvard, Yale, Stanford and MIT—are steadily expanding their online offerings. The number of high school graduates is going to start declining. The author thinks 25% of all colleges and universities will go out of business in the next 10 to 15 years. It could be 50%.
Much of what higher education sells is the experience of college, but the pandemic has largely put an end to that. They also sell a credential and the actual knowledge acquired, but those are largely unaffected by the pandemic.
The transformation that is coming in higher education will be led by tech. Zoom for classroom use was adopted more in 12 weeks than the previous 20 years. This leads to scale and the big players dominating. Tech will collaborate with the best universities and the best professors to offer 80% of the traditional four-year degree for 50% of the price. Online learning will transform the perception of the college experience.
The author’s premise for the last, and longest, chapter is that the pandemic made clear all the poor choices the U.S. has made over the past generation. The tax laws and lack of affordable higher education favor the rich and have decreased the middle class. This makes it harder for people to improve their position in life.
The last chapter is a long rant about all that is wrong with America. The author is right in many cases and often he is, in my opinion, wrong. But mostly, I think he is off topic. This has very little to do with Post Corona. It appears that he needed more material to fill out the book. Or he just is personally very invested in this topic. But it really doesn’t fit with the rest of the book, which was on topic.
The first part of the book is good, but why read it? I’ve given you the gist above and there is little to be gained by reading the whole book.
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