Virus – Corona or WhatsApp?

WTF. Just a month ago, stock markets around the world were hitting all-time highs. The bellwether US S&P 500 index had reached a peak of 3,386 and today we are sitting on a -32% decline in the index, in what is being described as the fastest drop into bear territory ever. A bear market is where the markets drop more then 20%.

I don’t need to explain what happened, the question is what is going to happen. The entire world is shutdown and commerce has grinded to a halt. This has serious implications for daily wage earners, people living from paycheck to paycheck and small-medium enterprises (SMEs) the most. Of course, every industry will get affected to some degree.

I’m going to briefly talk about: 1. the growth of COVID-19 2. WhatsApp 3. Financial Markets and 4. Moving Forward.

Coronavirus (aka COVID-19)

The “viral growth” is the main issue, it multiplies so fast that the medical system of the host country starts to buckle. It really comes down to the number of hospital beds vs. the number of patients that show symptoms of COVID-19. Suppose you have 1,000 beds and 500 ventilators, and the virus has growth exponentially and 5,000 people have symptoms.

COVID-19 Cases in Italy

As you can see from the graph the 5,000 cases in Italy doubled very quickly and within 2 weeks they had 50,000 cases. Now with only a fixed number of beds and ventilators how do you categorize who gets treatment and who doesn’t. And since there is no vaccine if you don’t get on a ventilator or if your health doesn’t improve then you die. Which is the main reason countries are shutting down and limiting travel to stop the spread/transmission of the virus because governments know the medical system won’t be able to handle the load from an outbreak of COVID-19.

WhatsApp the Virus

WhatsApp is the de-facto messaging platform in India because everyone is using it. That wasn’t always the case but because of their growth which looks similar to a virus, it was able to grab a large chunk of users in India.

During this COVID-19 pandemic, WhatsApp has been the messaging medium of choice and the amount of false and fake information being sent was/is ridiculous. I hit the roof when 5 or 6 of my WhatsApp groups were forwarding an official looking document of the government “locking down” the country, the kicker…it was for Malaysia. Most people didn’t even read it and just forwarded the document blindly, adding to the chaos of messages.

McKinsey consultants would be proud

The above image was forwarded ad-nauseam on all my WhatsApp groups right before the Prime Minister Narendra Modi was going to speak. It looked plausible because who would put all that work into a PowerPoint like that. I guess we now know, someone working from home (WFH) that was bored off their ass.

WhatsApp really needs to address this false/fake information head on. They need to introduce a feature to downvote a person which impacts a person’s reputation score (aka trust graph). If their score falls below a certain level they cannot forward content. Or they should have a mechanism to mark something as SPAM. Of course, I know they won’t doing anything because introducing any friction into the platform will slow the growth and usage of it.

Financial Markets

The Indian financial markets have taken a hit just like the rest of the world. The Sensex has dropped from nearly 42,000 to 30,000 and I think these markets have much more to go down. The COVID-19 pandemic is like every black swan event rolled into 1 and we just don’t know how to price the risk or its long-term impact. The amount of money that people and businesses have lost or are losing is not something that can be fixed in 1 week, 1 month or 1 quarter. If a vaccine is not found soon and the world goes down the path of Italy, then all bets are off for 2-3 quarters. Yes, I said it and that means 2020 could be a complete wash.

Moving Forward

There is no doubt that COVID-19 will have a long-term structural impact on the world and I’m not talking about 12-24 month timelines. They include:

  • Temperature sensors will be the norm everywhere – airports, commercial buildings, etc…
  • Working from Home (WFH) will be a viable option in India
  • A rethink of the American healthcare system – the lack of COVID-19 testing shows how broken the system is
  • Improved hygiene levels across the board, either personally or driven by design such as sanitizers everywhere like we have paper towels in bathrooms
  • Last mile delivery companies such as Swiggy, Instacart and Rappi to name a few are essential

I’m really hoping many of the things I have written about will be proven wrong. But, we are still in the early days of the COVID-19 pandemic for India, US and the rest of the world.

2 Comments

  1. Good post! I think more tough times are ahead, but hopefully all will be over by April end. Small correction (no pun intended): a Bear Market is when stock prices drop 20% off recent highs; a Correction is when you fall 10% off recent highs.

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