Ted Audio Collective.
HBR presents. Hi everyone, you're listening to After Hours.
I'm Yung Mi. I'm Mier.
And I'm Felix. How are you guys doing?
All right. Quarantine week 38.
I feel like the background of your homes has gotten cleaner and cleaner with each passing week.
I think we're getting better and better at moving away the clutter so you can't see.
Yeah, exactly. You know, the narrow zoom window is really super useful.
So what have you learned about yourself through this process of isolation?
What have been the big self -revelations?
Sort of the regularly scheduled meetings, all of that is actually not that different from before because you just know you have a meeting, you know, it's now online instead of in person.
That to me doesn't make a dramatic difference.
But what makes a dramatic difference is like these little chance encounters, like the little interactions that you run into someone in the hallway or you see someone you haven't seen in a long time.
And somehow I never really realized like how big and how important the part of life that is to me.
I really miss that.
I totally agree with that, Felix.
I think the thing I've learned is the degree to which I am just a creature of habit.
Just as one example, I've had like the same lunch and dinner for like maybe three weeks in a row.
I'm just doing very simple things again and again and again and again.
And I find it very comforting.
Normally I look for differences in complexity and variety.
And at this time, I've become a complete creature of habit, which I really have kind of like.
Interesting. How about you, young me?
This totally has played into the introverted side of my personality.
And I just find myself getting so comfortable with reading and quiet and just spending a little extra time with my family at meals and not rushing to the next thing.
It really does feel like a pause button for me.
And I'm fortunate enough to have my whole family with me.
And so on the one hand, just a lot of gratitude, but also just everything sort of slowing down a little bit.
It's really something.
Yeah, it's something that we don't really often experience.
Yeah, exactly. Not in this way.
So Mihir, you had a great idea for how we might do this episode.
Well, in a way, we've kind of become so preoccupied with the very short and maybe medium run, you know, which is when is this curve going to flatten?
When are we going to get back to normal?
But I think we want to take a step back and maybe make some predictions for kind of a long view, the nature of business and the nature of our lives and kind of step back and think about that.
So I'm looking for some long run predictions about what our world might look like.
Sounds great. Okay, Mihir.
Yeah. So let's begin by kind of taking a long view.
And I wanted to talk about an industry that I think is going to be maybe the most impacted by everything that's happening.
And that is health.
So I think the healthcare industry is going to be fundamentally transformed.
And by the way, I think in positive ways.
So what do I mean by that?
I'll give you two quick examples.
First, I think telemedicine is going to ramp in a way that is extraordinary.
And the reason for that is the technological barriers to telemedicine have long been overcome.
But the regulatory hurdles were the problem, right?
Like cross state licensing and seeing patients across borders.
And that has come down in a hurry.
And that I think is just going to change healthcare fundamentally in a positive way.
The second way I think healthcare might change in a really interesting and dramatic way is I think our understanding of personal communicable diseases and kind of the prevalence of masks and hand washing will change the occurrence of things like regular flu.
So we will in steady state end up in a world where people are washing their hands all the time and maybe wearing masks, a la Asia.
And that will have this consequence that a lot of other things like just regular flu and other communicable diseases will actually come down.
So I think that the sector that's really the most to gain from all of this is healthcare.
And I see lots of positive things there.
So telemedicine, I think, is super interesting.
When you look at survey data, what people would like to do, some of it is just surprisingly simple.
The number one thing that people would like to do is scheduling doctor visits online that you don't have to call.
And you would think, oh my God, it's amazing that this doesn't exist to begin with.
But that's something that many physicians don't really offer.
And then it's like automatic refill of prescriptions and so on and so on.
So in a way, what's interesting about this prediction is maybe it's not even so much the radical changes.
Oh my God, I get my scan read by some doctor somewhere on the other side of the planet.
Maybe it's the really mundane things that actually most service industries have implemented a long time ago that will be some of the really tangible changes to the healthcare industry.
One thing I just wanted to raise about the telemedicine thing that I think is interesting is a lot of the reason why doctors have adopted it so quickly.
And are willing to do it now is in a way because so many hospitals have cut back on elective procedures that there's no revenue from elective procedures.
And so now there's push to go into telemedicine and in a way they're hungry for it because there's massive revenue shortfalls.
And so telemedicine all of a sudden is a solution to that.
So it's interesting because now there's like this urgency to it.
So Youngmi, what do you think?
What's your big long -term take?
Okay, so one is I think we're definitely going to see a culling of companies in general across industries.
I think the strong are going to get stronger and you're already seeing that the strongest companies already.
They're the ones with the balance sheets that are able to survive and even thrive in the current context.
But they're also going to benefit over the longer term from this winnowing of competition.
So as weaker players go under, they're going to be able to hire the best new employees.
They're going to be able to strengthen their market positions and eventually there are going to be a lot of cheap assets out there that the big players are going to be able to gobble up.
That's really interesting and Youngmi, I can think about that in two ways.
I can think of that as kind of a good thing or maybe a bad thing.
Like a bad thing in the sense of it's a little less competitive and the big players are going to do things.
Or is it kind of a good thing in that there are smaller players who are kind of not that great, who have been left around for too long.
Which way do you see it shaking out?
I think both are true.
I do think there's also going to be sort of a middle tier of companies, these smart companies who could have gone in either direction, but they won't waste the crisis to remake their operations.
In other words, they'll use this as an opportunity almost.
I think there are a lot of companies out there previous to this crisis that were operating at, you know, moderate profitability.
And there were some things that those companies needed to do to upgrade their operations, to maybe run more leanly, but it was difficult to do.
And I think this is an opportunity for those companies to rip the Band -Aid off in terms of creating new ways of operating.
And I think you're going to see companies who are somewhat ruthless in how they do this.
And they'll use this as an opportunity to clean up their operations, to run much more efficiently, to rebuild themselves from the inside out.
And the government's response, of course, will be a big factor in how much of the rethinking is going to happen.
So if you see some of the Fed facilities, it seems compared to, say, the previous recession, we're willing to support businesses that are far riskier than the kinds of businesses that we would have supported in 2008, 2009.
And so if that type of government support becomes pervasive, some of the players who are relatively weak, they will survive.
I actually think this is a really interesting prediction, young me.
And I think, in a way, the silver lining of a crisis like this is the uneconomic players and some of the uneconomic business models that are proliferated in the last five years of kind of easy money and maybe loosey -goosey thinking, they get windowed out.
And that could be kind of a positive version of your story, which is there's just a lot of uneconomic stuff that is going on, and it gets windowed out through this process.
And you're right, Felix, in a way, the weirdness of all of it is that government support could slow that down.
So, Felix, what's your bigger, longer take?
So I had an interesting time thinking about this because my first reaction, when I obviously these predictions are now left and right, what's going to happen longer term?
And my first reaction is, generally speaking, I think we will see much less change than people anticipate at this point in time.
I'll give you one example, distributed work.
Now that we're all working from home, we're connected via the internet, every other prediction that I see is about, oh my God, this is really the turning point for distributed work.
We will no longer go to the office.
We'll be on Zoom and Slack and so on and so on.
And I think it's a hugely exaggerated prediction.
There was this really fabulous experiment at a Chinese company called C -Trip.
It's a large online travel agency.
They have about 20 ,000 employees, and they did an experiment with about a thousand of them.
Control group and a group that worked from home, and sure enough, you see what you always see.
Everyone who works from home is happier, less likely to quit, more productive, and so on, and so on.
And then C -Trip thought, oh my God, this is too good to be true.
Let's do that with everyone.
And the first thing that you see is they gave everyone a choice, not that everybody had to do it.
The first thing that you see is half the people who used to work from home in that experiment, they opted to go back to the office.
And sure enough, the ones who didn't have such big productivity gains were the ones that opted to go back to the office.
And so my sense is when we look at these data, when we look at, oh, look, distributed work becomes more popular.
We always underestimate the selection effects.
It's people for whom this works best to then take it up.
And then we think, oh my God, working from home is a really great idea.
Now we're running this experiment essentially with half the planet.
And we find out, oh my God, please, please let me go back to the office because I'm so much more productive and have better ideas and so on.
It is interesting. Everyone I speak to about their work from home experience, there's no middle ground.
People either love it or they really, really miss being in the office.
So my sister, for example, is really eager to get back to the office and says she really completely underappreciated how much that office experience, how important it was to sort of her daily psyche until she had to work from home.
There are others who are completely in the groove.
As an example, you're never going to see me in the office again.
Oh, no, don't say that.
I will be in the office.
Okay. Here, you have more predictions.
Yeah. Let's do some more predictions.
So I think education, and especially higher education is going to be transformed and that's for a couple of reasons.
One is, I think, especially the US higher ed model, which is highly levered to foreign students and to Chinese students, is going to come under a little bit of threat.
And I think the economics of a lot of higher ed are going to prove to be more unsustainable than we thought.
It's a little bit of this piece of, well, distance learning, but I think it's even more the degree to which people are willing to travel around the world and find out that their lives could get disrupted.
That just could have a permanent scarring effect.
And so many US institutions are levered to that.
Of course, Australian institutions, UK institutions are so levered to that effect.
I think that's a really big long run story.
So I think the higher ed sector is another area which I think is going to get a little bit of a shell shock.
That's so interesting.
I think if there's an emergent theme in all of these ideas that we're proposing, is that in some cases, I think this is going to accelerate pre -existing trends.
But in other cases, I think it will reverse trends.
And in a third scenario, I think it's going to complicate some trends.
Just to give you an example, air travel, this is an example of a trend reversal because the last five years before this happened, a record number of people traveling by air.
In telehealth, that's an example, I think, of a trend accelerator.
I think with education, I think this is going to complicate some trends.
And so if you think about online learning, on the one hand, I think this makes the potential of online learning more salient.
On the other hand, for a lot of people, I think this is reinforcing how difficult it is to replace the value of being together on a campus in a classroom.
And if I have one fear about this, it's that this is going to be the catalyst for a real split in higher education where you have the richest, the most well -funded institutions placing even more of a premium and creating even more of a luxury product associated with living on a campus and being in class
together. And so I can sort of see it heading in both directions, almost the elevation of a luxury tier of education and then a reinforcement of a more mass market level that uses a lot of online learning.
I think this is a really interesting point, Yang -mi, thinking about what those early consumer experiences are and how much that matters for whether a particular set of services takes off.
So typically what we would do is we would be so careful about creating a particular experience, and then we would limit it to very few people and create this out -of -this -world experience.
What we've done, I think now, in online education is a good example.
There was just no time to do that.
And as a result, for everyone I see who has an okay online learning experience, there are so many people who have really terrible experiences.
Absolutely. And so complicated, I think, is exactly the right word.
My sense is it might kill off as many examples as it might actually build the foundation for something truly new.
You know, the trade in goods might just well proceed as it is.
A lot of services can just continue as they are, like your haircut is going to be your haircut.
But it's these services that are a little bit more global and a little bit more complicated in their interactions that I think are the ones where we end up seeing potentially big changes.
And in some sense, the worst version of the world, Yang -mi, that you just articulated, kind of a world of haves and have -nots, I think that's kind of right.
I mean, I think that is a little bit of where we're going, and I think that's really unfortunate.
But it goes to your point earlier also, which is culling.
We're going to see culling of weak institutions that we're bringing people together with probably not that many benefits to bringing people together.
So higher ed is the other place to look, I think.
Okay, Yang -mi, what do you think?
So this is not a prediction.
This is actually a question for both of you.
And my question for both of you is, what is this going to do to our relationship with the sharing economy?
Are we going to just get back into our Ubers and lifts, Airbnb?
Are we going to feel comfortable staying in other people's homes, work sharing?
We work offices. Are we comfortable crowding back into offices, sharing offices?
Even things like, I remember there was one podcast episode where we talked about the magic of food halls.
Where you sit at a bench, and there are all of these restaurants in one place.
And so what is this going to do to our relationship with the sharing economy?
Tell me the answer, guys.
I think that's super interesting.
What do you think, Felix?
I have no doubt that all of these services will spring back much more quickly, I think, than we now anticipate.
I do think there's probably differentiation along sort of quality standards.
Remember how the hotels now, some time ago, they started folding the toilet paper roll in a particular manner to show you, oh, the bathroom was actually clean.
So I think we'll see lots of these mini innovations.
Oh, this taxi was cleaned, you know, not so long ago.
And so I think this tendency to spend time in places where there's lots of people.
Unless something really, really dramatic happens in, say, the rate of reinfection, I have no doubt that all of this is going to come back.
When you look at airline travel, 9 -11 was like, oh my God, I'm being used in a terrorist attack.
So in 2000, we had about 55 million passenger miles.
Then 2001, in September, it dropped to 38.
So that's a dramatic drop in the number of miles.
The following September, 60 % of that drop had gone away.
People just went back.
And I think unless you learn something that really changes the likelihood that you're not going to be well, I think most people, most of the time, will snap back to their lives.
Young me, he's sticking close to his guns on not much changing.
He really is. But you know, one of the things that you said that really stuck with me, it got me thinking about all of the really clever ways companies could very subtly reassure you that the seat that you're sitting in, that the meal you're being served, the toilet in your hotel room has been cleaned.
And there are so many additional cues that companies are going to have to begin to insert in their service proposition.
It's kind of like when you sit on an airplane and they hand you a pillow that has been wrapped in plastic and sealed.
So that you know that the thing has been cleaned.
Imagine that in every dimension.
And that might be a fabulous new opportunity for differentiation, right?
Companies that do this really well.
To your point, Felix, about air travel, I have to say, I have never craved air travel more than I do now.
No, no, I have been dreaming.
You're my example number one.
The lesson to me out of this crisis, in a way, has become almost how much I value that travel, how I don't want to lose those experiences.
But it's not going to get back to 100%.
And the reason is it's an opportunity for companies to get really smart about the trips that are really necessary.
So exact that same argument we made in 2001.
And it didn't happen.
We will see. I just don't see us going above 80 % of where we were in 2019 for at least another three or four years.
I just don't see it.
So let me try another non -prediction.
Felix has turned our prediction show into the non -prediction show.
The newspapers and media is full of how media consumption spikes.
And of course, it's true.
You know, we're stuck at home.
Everybody's on Netflix, television.
And so when you look at the size of the audience, it's really just astounding how much consumption has increased.
But what I find more interesting is if you look at what is it that people do more of?
Obviously, video consumption is way up.
Where does it come from?
Gen Z. You look in the boomer generation, video consumption is up not even by 10%.
What are they doing?
They're watching traditional television, television viewing, dramatically up among boomers.
And so what's interesting is like everybody does much more of what they have always done.
And does that suggest, Felix, that if it's not new viewers, but it's just amplification of pre -existing viewers, then isn't this going to be more likely to be transitory?
I think so, yes. So you might have a permanent change that you lure some people into paid subscriptions.
And that might have been difficult to do under normal circumstances.
But yes, other than that, most of the media behaviour, I think it's just going to be transitory.
But this is, I think, an example of, if anything, the modest acceleration of a pre -existing trend.
So you saw, for example, Disney Plus had a huge spike in subscriptions.
But you can imagine those are people with families, people who are eventually going to subscribe to Disney Plus anyway.
It's like video gaming.
You see this huge uptick in video gaming.
But it's not as if they're convincing non -video gamers to play video games.
So that is interesting.
So here, did you have another one?
Well, so I feel like I have to rise to the challenge of making Felix believe that something might permanently change.
So let me try, let me try, which is I'm going to give you two and see if you bite on either one.
So one is cruises and one is movie theaters.
And so I confess I've never been on a cruise and I've never wanted to go on a cruise.
So my point, exactly.
No change. Well, so you tell me, Felix, see, I think the cruise industry shrinks into a very niche situation.
Do you see permanent changes there or do you think that too is really not changing?
In the case of movie theaters, I would think it's much closer to young me's.
This is a pre -existing trend.
You have a more varied use of movie theaters on the one hand, and you will have special movies that are just like the experiences very different if you can see it on a big screen.
So that one feels more maybe speeding up change a little bit.
I think the cruise ship is very interesting.
I'm always a little confused about these ships.
I have never been on a cruise either, but maybe there's a really robust demand for that kind of an experience.
What do you think, young me?
Look, with cruises, I think we're talking about a market where the three of us, we don't really understand the psychology.
I saw this statistic that bookings for 2021 cruises are higher than they were for 2019.
No, you're kidding.
But it's a big caveat, and that is because so many cruises have been cancelled, instead of refunding your money, what they're doing is they're encouraging you to just rebook.
So it's not clear if that's true demand, but that, look, cruises have always bewildered me, I'm going to be quite honest, and it's a bigger industry than I could ever wrap my head around.
And so that one I'm flummoxed, honestly.
Young me, you got another quick one for us?
I have another question for you guys.
Do you think this will have an impact on wealth inequality in the US?
And the reason I ask that is that if you think about it, this is such a buying opportunity for anyone who has the means to buy.
The price of most assets is down, whether you're talking about stocks or real estate or whatever.
And if you're someone who has both the stomach and the cash to be able to scoop up some of these cheaper assets, then this is the opportunity to do so, and the people who tend to have both the stomach and the cash are people who are already wealthy.
And so are we going to see a worsening of the wealth inequality problem in the US?
This is actually one arena where I'm trying to be hopeful to the extent that we can use the crisis in this sense that, oh my God, the dramatic discrepancies in the health impacts of this crisis along lines of wealth, of inequality, of pre -existing conditions is so dramatic.
We have to do something about it if we can get it done now.
So if, for instance, if we could say the fact that people don't have sick leave, that is just completely unacceptable.
Let's just make that like you could not run a company and think about, do I want to give my people sick leave or not?
If we can put protections in place, if we can use the panic, like this willingness to get stuff done during the crisis and actually provide really tangible forms of support that people might need when they get into system -wide crises or even individual crises, I think that would be the best thing that I
could hope to get out of the current situation.
Yeah, I mean, it's a really interesting question, Youngmee.
I mean, I think about it in two ways.
One is about government policies.
So, you know, it could be that government policies will change income inequality and wealth inequality, and that's more likely to happen on income than on wealth.
And then the other way to think about that is whether just the kind of pre -tax wages will change or if wealth levels will be affected.
I don't see it changing pre -tax wages.
I could think it could change government policies, but I don't know.
It's a really interesting question.
What's your sense, Youngmee?
I'm less optimistic on the policy side.
I think to the extent that you see any kind of consensus building right now on the policymaking side, it's because the implicit bargain here is that anything we do is crisis -oriented and is of a short -term nature.
And I think once you remove that constraint, I think we lose all consensus.
So I'm more pessimistic than you guys.
So maybe one example that I think might be sticky.
You know how we now extended unemployment benefits to gig workers?
And I think it's these kinds of things.
So that's a precedent in a way that like the next crisis comes along.
Well, we did it in 2020.
Why not do it again?
So I'm thinking these very like sometimes they almost seem small probably in the bigger scheme of things, but I hope that we can get many, many of these things done that then will prove really sticky over time.
I hope you're right.
Okay, thanks. So I don't know if you saw this past Sunday, but the Andrea Bocelli.
Did you see his live concert?
Oh, I did not. I heard about it.
Okay, so on Sunday, Easter Sunday, the Italian opera singer Andrea Bocelli, he live streamed a concert from Milan's Duomo Cathedral.
It was just stunning.
The cathedral, of course, he was standing in front of this cathedral and that whole square was completely empty.
And there was something so moving about it.
You talked in a previous episode about the photography of different cities around the world and how beautiful some of that aerial photography is.
What's amazing about how they shot this concert was they superimposed on him seeing the camera panning above the city.
And it went around the world.
So you saw empty streets in Paris, in London, in New York City.
And it was so moving.
And one of the songs he performed was Amazing Grace.
And especially that line was blind, but now I see.
Yeah. And coming from him standing there.
And I mean, regardless of religion, you should watch it.
It was one of those just deeply, deeply moving performances.
And it felt as intimate as you could possibly imagine in this context.
Was there an orchestra?
It was just him and an organ.
That was it. It was incredible.
That's kind of beautiful in its own way, too.
It really was. And it's already, I mean, as of this morning, it already had tens of millions of views on YouTube.
And so you should absolutely check it out.
Felix. I have a film recommendation now that we're all desperate for new content.
On Netflix. I Saw Shadow by Zhang Yimou, the Chinese director.
You have to like Chinese martial arts movies.
So this takes us back to the period of the three warring kingdoms.
And the movie is called Shadow, both because it's sort of a regime in decline, shadowy figures.
But then also shadow in the sense of when you shadow someone else, when you are sort of a version of someone else.
But really, the photography is spectacular.
And it's as these movies tend to be, you have to tolerate some level of violence.
But just even the fighting that is a big part of these martial arts movies is choreographed in the most spectacular way.
And then it almost looks like a black and white movie, except you see hints of, say, skin tones on faces or hands on some of the weapons that they use.
But it's just visually stunning.
So if you haven't seen it, the film is called Shadow by Zhang Yimou, really super beautiful and super impressive.
That sounds fantastic.
So I'm kind of, as you both know, a little bit of a games and quiz kind of junkie.
And so historically, I've recommended the Crossroads puzzle at The New Yorker and I've recommended University Challenge, which is culminating in a very exciting finals next week.
But my new one is another British game show, which is so hard and so much fun.
And it's called Only Connect and it's available on YouTube, like season's worth on YouTube.
And it is super geeky.
It's harder than University Challenge.
He says, it's super geeky as if he needed to say, it's super geeky.
But the great thing about these British game shows is they're so hard and they create these celebrities out of people who are such nerds.
And when you get one right during the course of an entire show, you're like feeling like a champion.
And this one you have like these four words and then you have to figure out what the common thread is.
But it is so difficult and the creativity behind the cluing is fantastic.
It's like really lateral thinking.
You have to really kind of think from different domains and bring it all together.
It's such a good show.
So if you're a quiz -y, game -y kind of person, after University Challenge, you try Only Connect.
Who are the participants?
Regular people. But these quizzers in the UK are like minor celebrities because they're so good.
In fact, I aspire to be one one day who would just go on to the show.
And it's so good. Only Connect, on YouTube, all the episodes are on YouTube as far as I can tell.
You could take a cruise to England to participate.
Dream on. Okay, everyone.
That's it for us this week.
Thanks everyone for listening.
This is After Hours from the HBR Podcast Network.
Thank you.
