• The days of going to the grocery store are almost over…
  • Major news in the fight against Parkinson’s disease
  • These investors just flushed $1.75 billion down the toilet

Dear Reader,

It has begun…

Last week, Jack Dorsey, the CEO of Twitter, notified employees that they would be allowed to work from home permanently, even after the pandemic passes. The company even provided an allowance of $1,000 for each employee to spend on whatever they need to be effective in their home offices.

And it’s not just about working remotely. Twitter has already canceled business travel and all in-person events for the entire year.

It’s not surprising to see a classic Silicon Valley firm like Twitter take the plunge. But this is just the start of a massive shift in the future of work.

Take Nationwide Mutual Insurance Company. It has already announced that 4,000 employees will now work from home permanently. The company has already shut down five offices.

Nationwide is a 90-year-old insurance company with $49 billion in sales last year… It’s not the type of company we would expect to make such an aggressive and progressive move with its workforce.

This is just the beginning.

The blunt force of a lockdown was exactly what was needed to “train” a workforce en masse on how to get things done in isolation.

Corporations are going to use this to reduce their office footprint, reduce operational expenses, and improve their gross margins. It shifts part of the burden of office infrastructure away from the company and onto the employee.

In some ways, it doesn’t seem very fair. After all, we end up paying for the space, electricity, internet, and so forth. The company is the beneficiary of our expenses.

Companies will have to step up and provide some kind of monthly stipend or expense reimbursement for those working from home. And I wouldn’t be surprised at all to see tax benefits even for those who are not self-employed and still work for a corporation.

Avoiding a long commute and working in your pajamas all day might seem appealing at first. But there are some negatives that we should be aware of…

Some of the most in-demand software right now is for monitoring remote workers. Software is installed on company laptops or our personal computers to monitor us throughout the day.

Many programs take a picture with the camera every five minutes to confirm that we’re planted firmly in our seats. Some software monitors employees in real time when on video calls to confirm that employees are paying attention the whole time. The software can also log every keystroke and monitor every website that employees visit throughout the day.

I suspect most employees working from home right now don’t even know that the software is installed on their machines. But performance and productivity are tracked, monitored, measured, and can be used against us by an employer.

These are draconian measures.

This may be worse than Google and Facebook’s behavioral surveillance practices. But we should expect this kind of software to become widespread.

Now to our insights…

Digital-first grocery shopping is on the rise…

For most of us, the days of physically going to the grocery store… browsing the aisles… and waiting in a checkout line are nearly over.

Grocery delivery company Instacart is currently in negotiations to raise several hundred million dollars in a venture capital round. This would put the company’s valuation at $12–14 billion dollars.

That’s an incredible valuation for a company that simply allows consumers to shop for groceries online. And it’s a sign that digital-first grocery shopping and food delivery is on fire right now…

Think about this – Instacart launched in 2012, and it was last valued at around $8 billion in December 2018. That means the company has gone from nothing… to $8 billion… to $12–14 billion in just eight years.

That type of growth is unheard of for a low-margin company that requires a lot of human employees to operate.

Instacart has COVID-19 to thank for its jump in valuation since its last round.

The company’s business has increased fivefold over last year because the virus has led to a massive demand for Instacart’s services. Why go to the store in the middle of a pandemic when we can order groceries online and have them delivered at a specific time?

And after seven years of losing money, Instacart will finally report a profit this year. That’s also thanks to COVID-19.

Now the company is staffing up. It is doing five years’ worth of hiring in five months.

And Instacart is not the only company in this space experiencing rapid growth.

Food delivery service DoorDash just raised $340 million in February – right as COVID-19 was breaking out in the U.S. And the company filed for an initial public offering on the back of that raise.

So DoorDash is cashed up with $1 billion in the bank and ready to go public.

And Uber is currently making a takeover offer for GrubHub, which was the “original gangster” of food delivery services.

That’s right – Uber is getting ready to spend a bunch of money on an acquisition at the same time it is firing a large percentage of its workforce.

It plans to combine GrubHub with Uber Eats, hoping that scale will make the business profitable. That’s how much Uber believes this trend is sustainable.

My readers know I’m predicting a “new world order” in the years following COVID-19. The way we work, shop, and entertain ourselves will all change. We’re seeing the early signs of this massive shift in how many corporations and businesses are adjusting to this new reality and where the private capital is flowing.

A major development in the treatment of Parkinson’s disease…

I have an exciting development to share with you today.

As we know, Parkinson’s is a horrible disease. About one million people in the U.S. have it right now. We don’t yet know the cause, but we know it’s a combination of genetics and environmental conditions.

With Parkinson’s, the brain loses dopamine-producing neurons in the area that controls movement. When those cells die, patients experience tremors, muscular stiffness, and difficulty walking. Patients can end up in wheelchairs and eventually become incapacitated. It’s a heartbreaking disease.

But there is hope. Several bleeding-edge biotechnology companies are working on Parkinson’s right now. And there is a novel treatment being tried at the McLean Hospital in Boston.

A physician in the molecular neurobiology department at McLean has been working with a wealthy Parkinson’s disease patient on a treatment that’s never been tested before.

To be clear, this isn’t a clinical trial. It’s just one doctor working with a patient who funded the research. But the results have been promising.

The doctor has been working with induced pluripotent stem cells (iPS). These are skin cells that are reprogrammed into the stem cells we all have as an embryo in development. The amazing thing about these stem cells is that they can become any type of cell.

In this case, the doctor turned these stem cells into neurons that produce dopamine. Then he injected these neurons into the patient’s brain to replace those that were lost.

And it had a positive effect. Doing this alleviated some of the symptoms of Parkinson’s disease.

So this is incredibly encouraging. It’s not a cure – the doctor has had to inject neurons into the patient’s brain twice now to maintain the effect. Still, this is a great development.

Now the question is – is this something we can duplicate on a larger scale and then improve upon? There’s no doubt somebody will try to do so. I’ll be watching this closely for breakthroughs.

How not to revolutionize the streaming industry…

I got a chuckle out of this last story…

It involves Quibi, a new streaming application some readers may be familiar with. Jeffrey Katzenberg, a film producer and former chairman of Walt Disney, and Meg Whitman, the former CEO of eBay and Hewlett Packard, created it.

They built Quibi around the idea of “short-form” content. Think of it like TV shows broken down into up to ten-minute segments.

Quibi is designed for people standing in lines or sitting on a train for a commute to work every day. The idea is consumers can pop open the app and watch full shows in minutes throughout the day. And subscriptions start at $4.99 per month, so anyone can afford it.

The Quibi App Offers Short Content

Source: Quibi

Quibi was founded in January 2018, and it raised $1 billion in a seed round in May of that year. Incredible. A $1 billion seed round is unheard of.

And Quibi just raised another $750 million in an early stage venture capital round back in March of this year. Investors have plowed $1.75 billion into this company that they are calling the new Netflix for smartphones.

To facilitate adoption, Katzenberg and Whitman have poured huge amounts of money into the production of new programming. They are hiring stars like Jennifer Lopez, LeBron James, and Chrissy Teigen.

It’s the classic corporate strategy. Pull out all the stops and throw money at it. And guess what?

It’s performed horribly to date.

Quibi went live on April 6 to much fanfare… which was bought and paid for, of course. But the app has already fallen out of the top 50 most downloaded apps in the app stores. The launch didn’t catch fire as hoped.

Quibi only has 1.3 million active users to date, and it is still in the 90-day free trial period. They don’t know how many of those people will stick around and pay for the service. I’d bet a good percentage of them cancel before the trial period is up.

And here’s where I got a chuckle – Katzenberg said, “I attribute everything that has gone wrong to coronavirus.” Hah!

I worked for decades as a technology executive. I’ve helped develop and bring to market technology products and services for customers. And I can tell you that Katzenberg and Whitman completely misread the market.

This happens all the time when big executives decide they want to do a new startup. They often think throwing money at an idea will guarantee success.

Consumers do want short-form content… But they have it already with YouTube, Facebook, Twitter, Instagram, Snap, or the latest fad TikTok. Those apps are all free and fill that time gap perfectly.

And guess what? All of those platforms are doing better than ever during the pandemic. And this is despite the fact that most users are not commuting to work. The only time we’re standing in lines is to get into a grocery store. That’s what makes Katzenberg’s excuse so ridiculous.

Consumers love Netflix and Disney+, which are subscription-based services that are full of well-branded programming and movies. Both services have also seen remarkable growth during the pandemic.

Katzenberg and Whitman just spent more than a billion dollars launching a “walled garden” experience for a brand that no one knows – Quibi. The only “innovation” was short-form content on a mobile phone.

It doesn’t make much sense…

I remember when tech company Qualcomm tried to do something very similar when it launched MediaFLO. It was designed to be like a cable TV broadcast to a mobile phone. I doubt many have even heard of it.

Billions were spent, and the platform went nowhere. Qualcomm tried to do everything in-house without partnerships in the programming and multichannel industry, and the service completely flopped.

When it comes to Quibi, I think investors just flushed $1.75 billion down the drain. Ouch.


Jeff Brown
Editor, The Bleeding Edge

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