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Big tech could emerge stronger from COVID-19

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Even the worst crisis creates opportunities

While the rest of the economy is tanking from the crippling impact of coronavirus, business at the biggest technology companies is holding steady — even thriving. With people told to work from home and stay away from others, the pandemic has deepened reliance on services from the technology industry's most prominent companies while accelerating trends that were already benefiting them.

Increase in demand for cloud computing platforms

For companies managing their internet infrastructures, making adjustments to computing needs on the fly is expensive and complicated. Cloud computing makes it easier. Companies were already dumping their own data centers to rent computing from Amazon, Microsoft, and Google. That shift is likely to speed up as millions of employees are forced to work from home, putting a strain on corporate technology infrastructures. 

Increasing usage of remote and collaboration tools

Microsoft has aggressively pushed its new business messaging and collaboration tool, Microsoft Teams, which competes with the independent company Slack. Last week, Microsoft said the number of users on Teams had grown 37 percent in a week to more than 44 million daily users. There have been at least 900 million meetings and call minutes on Teams every day. 

Grocery delivery apps are in demand

Amazon has muscled in on brick-and-mortar retailers for years, but shoppers now reluctant to go to the store, are turning to the e-commerce giant for a wider variety of goods, like groceries and over-the-counter drugs. Amazon said it was hiring 100,000 warehouse workers to meet surging demand. While Amazon has changed shopping habits for items like books, getting customers to trust it with groceries has been challenging. That's now changing.

Other grocery delivery apps including Instacart, Walmart Grocery, and Shipt, have begun to see record numbers of daily downloads. Instacart plans to hire 300,000 gig workers over the next three months, more than doubling its current base.

Increase in traffic to video streaming sites and social media platforms

Voice calling over Facebook's WhatsApp messaging service has doubled in volume. Facebook's Messenger app has had similar growth. Analysts are bullish about Facebook's prospects because many people turn to it for news in times of crisis and to distract themselves while working from home.

Downloads of Netflix's app — a proxy for traffic from the streaming site — jumped 66 percent in Italy. In Spain, they rose 35 percent. In the United States, where Netflix was already popular, there was a 9 percent bump. Streaming services like Netflix have dampened box office sales for movies in recent years. Now, as movie theaters close under government orders, Netflix and YouTube are gaining a new audience.

Video game usage and live streaming have spiked. Globally, the weekend of March 14 saw a significant increase in streaming audiences over the previous weekend, with Twitch's viewership going up 10% and YouTube Gaming's by 15%. Verizon found that online gaming has increased by 75% during peak hours in North America, while streaming is up 12%.

Increased usage of apps

Even Apple, a company with hundreds of closed stores around the world, is increasingly looking as if it will emerge from the pandemic in good shape. Many of Apple's factories are nearly back to normal. People are spending more time and money on its digital services. Last week, Apple even released a lineup of new gadgets. 

More time and money spent on phones is also good news for Apple and Google because they take a cut of most app sales and in-app purchases. Over the past two weeks in the United States, Apple and Android App Store revenue has risen 14-20%.

The largest tech companies could emerge much stronger

That's not to say major technology companies shouldn't be worried. Advertising, the lifeblood of Google and Facebook, tends to suffer during economic downturns. The stocks of Apple, Microsoft, Amazon, Facebook, and Google's parent company, Alphabet, have collectively lost more than $1 trillion in market value in the last month. And Microsoft, Twitter, and Apple have cut their short-term financial forecasts because of slowing consumer spending.

Beyond the big five, things have been more of a struggle. Communication tools like Zoom are now essential, but ride-hailing firms like Uber and Lyft and property-rental sites like Airbnb are seeing customers vanish. The $3.9 trillion global technology industry will suffer this year, though just how much remains unclear.

But when the economy does eventually improve, big tech could benefit from changes in consumer habits. And despite more than 18 months of criticism from lawmakers, regulators, and competitors before the pandemic hit the United States, the biggest companies are likely to finish the year stronger than ever.
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Digital health companies enabling you to manage your health from home

Digital health companies enabling you to manage your health from home
While 2019 was a big year for digital health, 2020 could be the biggest yet. COVID-19 has put enormous pressure on our global healthcare system, which is short-staffed, overwhelmed, and lacking the resources necessary to support the rising number of confirmed coronavirus cases. As a result, we're now turning to digital health companies to play a vital, and virtual, role in safeguarding those stuck at home.
 
From aging populations, to those with mental health conditions, to those suffering from chronic illness (and everything in between), here's a list of digital health companies that can improve the care and self-management of patients from their homes.
Explore now

More from Today in Tech

What's the best way to work effectively from home? That has suddenly become an urgent question as employers around the world tell staffers to work remotely to stem the spread of the new coronavirus.

Here's some advice on how to work best from home:
  • Make sure you have all the tools you need: the right laptops, network access, passcodes, and instructions for remote login.
  • Minimize distractions and noises from others in your household. Separate your workspace from your personal space as much as possible. Use a pair of noise-canceling headphones to block out sounds.
  • Use digital collaboration tools to communicate with colleagues. Schedule group meetings by videoconference and set up group chats via programs like Slack or Microsoft Teams.
  • Take steps to improve your internet speed. Switch to Ethernet if you can. If not, move as close as possible to your Wi-Fi router.
  • While you want to minimize distractions from your family members or roommates, you also want to avoid feeling like you are entirely alone all day. Call people on the phone or video chat, and break up the day with some exercise.
Joe Procopio says every startup from inception all the way through to the last pre-IPO funding round has three defining stories. It's up to company leadership to sell these stories to customers, investors, the team, and themselves.

The themes of the three startup stories are deceptively simple:
  • What the company is - what you do when you walk through the door every day.
  • What the company will be - the overarching goal that everyone on the team is working towards.
  • What the company should be - the dream, the billion-dollar moonshot.
The Reddit message board "/r/coronavirus" has grown to more than 1.2 million members — almost a million of whom signed up in the last two weeks.

Some of the 60 volunteer content moderators include researchers of infectious diseases, virologists, computer scientists, doctors, and nurses, spending hours policing the more than 50,000 daily comments posted by the community for misinformation, trolls, and off-topic political discussions.

Their expertise and unpaid labor have helped create one of the most authoritative, up-to-date, and civil forums for information and discussion about the pandemic. A look at how "/r/coronavirus" turned into a beacon of light on the internet.
Sameer Singh writes on how startups can combine SaaS and network effects to gain structural advantages. He says there are two broad ways of doing this:
 
  1. Using SaaS to enhance a network effect-based model: This model is also called "come for the tool, stay for the network" and is a classic strategy to solve the "cold start problem" that plagues most network effects-based startups when they start out. However, its benefits extend far beyond solving that narrow problem.
  2. Using network effects to enhance a SaaS model: This approach is sometimes conflated with "come for the tool, stay for the network", but is actually very distinct because "single-player" software is not used to bootstrap or strengthen a network. Instead, SaaS is used to tap into a pre-existing (and sometimes offline) network, or a secondary developer platform/marketplace is used to extend the use cases of the core SaaS product.
From the a16z archives, here are some of their best pieces on leadership, on managing your psychology and professional development, on strategies, on operations, and for managing a startup in times of uncertainty culled from their past decade of archives.

Hot startups hiring now 🔥

Invitae - Specializing in genetic diagnostics for hereditary disorders. Explore 12 jobs.
Altitude Networks - Data security for enterprises using collaboration SaaS. Explore 3 jobs.
Volley - The Voice-controlled entertainment network. Explore 4 jobs.
GreenPark Sports - Building the future of fandom. Explore 13 jobs.
Roblox - Build and share your own multiplayer video games. Explore 116 jobs.

Funding and Acquisitions

The New York Times has acquired Audm, a subscription audio platform that uses professional narrators to transform long-form written articles into the spoken word. The media giant is also touting the acquisition as a "welcome balm" to help people during the COVID-19 outbreak.
Lilium, which is developing an all-electric, vertical take-off and landing aircraft with speeds of up to 100 km/hour, has closed a funding round of over $240 million led by Tencent. It hopes to launch and operate from 2025 with plans to run in its taxi fleet eventually. This is one of the biggest fundraises to date for a startup in the "flying vehicle" space.
Scopely, a mobile-games developer, raised an additional $200 million as part of its Series D funding round at $1.9 billion valuation. The new funding adds to the original $200 million Series D round announced in fall 2019 and brings the total raised to date to over $650 million. Over time, Scopely has generated more than $1 billion in revenues.
Impossible Foods, the privately held meat replacement challenger to publicly traded Beyond Meat, said it had raised $500 million in its latest round of funding. The funding will be used to invest in fundamental research and innovation, boost its manufacturing, expand retail presence, and speed up the commercialization of its new line of products: Impossible Sausage made from plants and Impossible Pork made from plants.
Checkmarx, an Israeli security company acquired in 2015 by private equity firm Insight Partners with an $84 million investment, was sold to Hellman & Friedman, another private equity firm, at a valuation of $1.15 billion.
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