Published in the San Diego Union-Tribune, April 13, 2020
“Life is what happens while you are making other plans.”
That quote is often attributed to John Lennon (from the song “Beautiful Boy”), but the original quote is from Allen Saunders, a cartoonist for Publishers Syndicate. Would that we could dismiss the last 90 days as nothing more than a cartoon gone bad.
“I made all my money by selling too soon.” Bernard Baruch.
This is one of my favorite quotes of all time. It is especially relevant at this moment and particularly in the technology space. In every pandemic, there are winners and losers. I am not totally comfortable with that sentiment, because my instinct is that there are more losers than winners, and their pain is more personal and deeper. I do not ever countenance grave dancing.
But I am in the business of teaching behavioral economics. I spend a lot of time thinking about how and why we do things, with a subtext of focus on why we do stupid things more than we should, and what neurotic impulses inform those decisions.
One of the most human characteristics is the misplaced assumption that things will stay the same, more or less. Your children will come home at night, the wedding will be in July and the grandparents will come, the graduation will be exciting, and the new job will still be there. Then Mr. Virus shows up. The Black Swan comes swimming in. And our lives are dramatically changed.
I am not suggesting that any of us can be prescient, that we can see the future, but we all know (and fear) deep down that sometimes our children do not come home at night. I am over 60, and my parents grew up during the Great Depression. I admit that some of my father’s Depression-era ways still reside in me. I can’t comfortably spend $6 on a double mocha latte with nonfat milk, etc. I can’t buy a Rolex.
It is in my DNA. I know it is irrational, but at some level, none of us can shake our past. That is why it is so hard to consistently exhibit rational man behavior. Even when we are presented with the data, with the immutable facts, it is still a challenge to accept them, embrace them and then act on them.
Those seminal events, the sudden jolts, those certain deaths in the family keep all of us a bit on edge, always aware that the Swan can show up when we least expect it. The Yiddish proverb says, “We plan; God laughs.”
Consider Brian Chesky, CEO of Airbnb. Last year, the valuation of the company was just north of $38 billion. He could have taken the company public in 2019, but he (and the board) elected to wait one more year to see if maybe they could get an even bigger number. Sept. 19, 2019: Airbnb puts out a news release saying they will finally go public in 2020. Today, they are giving refunds to guests, and many cities are telling them that they can only rent to doctors and nurses.
The dark question asks: Will people come back when the virus leaves, or has our behavior changed forever in some way? A few years ago, my wife and I took a cruise. Not likely again. There are countless behaviors that we all assumed would continue as we knew them and now won’t. The game now is to figure out which new ones will replace them.
And then there are winners. I am an investor in and on the board of Mercato, an e-commerce platform that connects customers with independent grocery stores. In January, the company’s annual run rate was $15 million. Today, it’s more than $250 million. But the same question still applies — will people continue to order online, or will they go back to getting in their car and going to the market to shop?
That puzzle applies to a thousand industries. I am not smart enough to know which businesses fail and which will rebound better than ever. But I am certain that the spirit of our country will never be totally broken. Random acts of kindness have spiked exponentially. Gratitude is everywhere, and washing your hands of the whole thing has taken on new meaning.
Rule No. 655
This, too, will pass (I hope).