Eric Schmidt The former CEO of Google thinks we need to act faster on coronavirus, and that the companies to transform themselves now are going to win. Here are five post-COVID strategies for every CEO. SYNBIOBETA
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Eric Schmidt’s Five Insights About Navigating Coronavirus That Every Business Leader Needs To Hear Now

The United States is not acting aggressively enough to put the coronavirus behind us.

That was my takeaway from an exclusive conversation with Eric Schmidt, former CEO of Google. Mr. Schmidt graciously took the time to speak with leaders of the synthetic biology industry about how to navigate this first-of-its-kind disruption for the industry, while best serving their teams, their customers, their investors, and our society. The conversation was part of a series of live digital events on the coronavirus I am hosting.

Few people are better qualified than Schmidt to provide wisdom on the path forward. As CEO of Google, he successfully navigated the world’s most important technology company through Y2K and 9/11, and Google’s profits even grew during the 2008 economic crisis.

Mr. Schmidt is also a founding partner at Innovation Endeavors, a venture capital firm focused on rapid technological advancements in data, leading-edge computation, and advanced engineering — three areas very pertinent to synthetic biology. And as a founder of Deep Life, he has committed to solving the hardest problems at the intersection of life science and computer science.

Synthetic biology is a growing field that aims to use biology as a means for manufacturing, often using the same basic fermentation method that one uses to make bread or beer. But with biology, manufacturing is more sustainable and more precise than existing manufacturing approaches depending on petrochemistry. For many companies in this young industry, it’s the first economic downturn that they’ve experienced. Like other industries, synthetic biology must develop strategies in response to the economic and social disruption of COVID-19, even as the world turns to synthetic biology’ for help solving this crisis.

I expected a more techno-optimistic perspective from one of the internet’s most important people. But Eric’s sentiment was much more “hope for the best, plan for the worst.”

1. The country should be completely focused on halting the virus’ spread.

To begin with, Eric cited an estimate that the U.S. economy is losing as much as $3 trillion every month due to the pandemic. If the nation were a business losing that kind of money, it would stop and completely re-tool itself to fix the problem, like mount a Manhattan Project to fight the coronavirus.

It’s hard for people to understand the exponential growth of the virus, he said. Epidemiologists use the R0 value to measure the infectiousness of a disease; it’s equal to the average number of people who will contract a contagious disease from one person with that disease. Schmidt said the R0 for coronavirus was about 2.6, and that the virus was doubling about every six days. “Even a week’s time matters,” he said. (With more data, some researchers have estimated R0 closer to 5.7, with a doubling about every 3 days.)

Schmidt quipped that if the U.S. could re-tool to build a bomber every hour, as it did in World War II, then surely we can tap into that kind of innovation and manufacturing capacity to better address this pandemic and recover more quickly.

He also pointed out that the “no” bias of the US regulatory posture doesn’t lend itself to the risks we need to take to rapidly react to a crisis like this. On average, a permissive posture results in better, faster results, and it doesn’t preclude us from cleaning up smaller problems later.

2. Companies that re-architect their businesses quickly will recover the best.

From his experience in the 2008-2009 financial crisis, Schmidt observed that the companies that quickly changed their businesses to adapt to the new economic reality were the ones that recovered the best. He used Google as an example.

“We had a 200-person layoff, which was a horrific thing for us to do at the time,” he said. Google also repriced its stock options, which was controversial, but it helped lock in its employees for the next few years. Those painful short-term steps “re-architected the business in a pretty muscular way.” Google’s profits even went up during the 2008-2009 downturn.

Take control over cash, Schmidt said, and get lean. Running out of cash before the market returns to normal is the biggest thing that can hurt you.

3. Focus on what you do well.

Schmidt said that the most likely scenario in this cycle is that the leading companies will emerge stronger a year from now. “Get focused on what you do extraordinarily well,” he said, “and get rid of the stuff that’s on the side. And do it so well that when you emerge, you win as the leader.”

4. Plan for a shift in the global markets.

Schmidt said the forces of nationalism are winning today. Companies dependent on international markets may want to hunker down and focus on their strengths while increasing profitability.

One potential outcome of the pandemic is to increase instability in the Middle East and elsewhere, which will probably increase China’s power in these regions.

Potential disruptions in manufacturing in China and elsewhere also highlight how critical domestic supply chains are. This could be an argument for developing highly distributed biomanufacturing platforms. I’ve written previously how fermentation infrastructure could be deployed in parts of the country close to corn and other feedstocks. This would not only ensure our nation’s access to chemicals and materials now made overseas, but it would also be a boon to agricultural regions with lots of space, lots of feedstock, and a growing demand for high-quality, high-tech jobs.

In the face of a global trade war, Schmidt thought that one of the most important phone calls Trump could make was to Chinese President Xi Jinping to ensure that we increase trade during this pandemic, rather than stifle it with tariffs. Tariffs could impede the supply chain in both countries for goods needed to fight the pandemic, everything from computer chips to nasal swabs. Again, the speed of our response is key, and any restriction in the movement of goods is unhelpful to the global response.

5. Digital life will get much stronger.

Our new dependence on Zoom, online grocery shopping, and the tools to live and work on the web is only going to grow.

It will be “tele-everything”, as Schmidt puts it, from telemedicine and increasing online purchases to attending conferences and working from our kitchen tables. We may not want to go back to the old way of doing things, at least not completely.

Take education, for example. Kids in remote and poor areas could potentially have online access to world-class expert teachers in any part of the world. Education systems themselves are going to be impacted. Schmidt says that teaching systems work best when you pair great teachers with great technology.

Our digital lives may help us navigate pandemics with tools that tell us whether we have come in proximity to someone who has the coronavirus. But tech companies could be reluctant to provide tools that may violate consumer privacy. Schmidt suggested a kind of passport system for sharing personal data while remaining anonymous, one that is open-source so that researchers could build upon it for public benefit.

What to expect in the long run

Schmidt said that while some people’s fears may drive them away from the cities and toward a more rural lifestyle, he believes that the current trends toward urbanism and consumerism are going to continue. Travel may decrease (it took five years for air travel to return to previous levels after 9/11), but brands that convey safety and a “flight to quality” could prosper in such a consumer marketplace.

Finally, Schmidt advises that we should assume the crisis will continue through summer, and to expect a second cycle of the virus in fall. The most optimistic predictions are that a vaccine will appear in mid-2021, so some level of disruption or physical distancing could be expected for at least a year, especially for people most vulnerable to the virus.

At SynBioBeta in October, Schmidt said he believes it’s just a handful of years before synthetic biology comes up with a digital platform for a much faster design-build-test-learn loop. “I am certain with the quality of people you have, and the number of people working on this, plus the fact that people are collaborating, there will be a quantum jump in acceleration as a result of this platform.”

Let’s hope he’s right, because that’s just the kind of quantum jump we need to prevent a pandemic like this from happening again in our lifetimes.

Follow me on Twitter at @johncumbers and @synbiobetaSubscribe to my weekly newsletters in synthetic biology. Thank you to Kevin Costa for additional research and reporting in this article. I’m the founder of SynBioBeta, and some of the companies that I write about are sponsors of the SynBioBeta conference and weekly digest. Here’s the full list of SynBioBeta sponsors

Originally published on Forbes https://www.forbes.com/sites/johncumbers/2020/05/07/former-google-ceo-eric-schmidt-has-five-key-insights-for-entrepreneurs-navigating-the-coronavirus-impact/

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John Cumbers

John Cumbers

John Cumbers is the founder of SynBioBeta. John is passionate about education and on the use and adoption of biological technologies. He has received multiple awards and grants from NASA and the National Academy of Sciences for his work in the field. John has been involved in multiple startups such as those producing food for space, microbes to extract lunar and martian resources, and hoverboards! John is an active investor through the DCVC SynBioBeta Fund and his synthetic biology syndicate on AngelList.

Kevin Costa

Kevin Costa

As Editor and Program Manager, Kevin leads SynBioBeta's digital media content, with the goal of telling the story of the people, companies, and ideas shaping the future with biology. Before joining SynBioBeta, Kevin managed the Synthetic Biology Engineering Research Center. His interests include public engagement, science writing, community building, and bikes!

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