News: Billionaire Silicon Valley Tech Leader Wants Businesses to Stay Open, but Healthy Public Must Come First vs. Coronavirus

Billionaire Silicon Valley Tech Leader Wants Businesses to Stay Open, but Healthy Public Must Come First vs. Coronavirus

There are times when leadership is tested. This is one of those times. As government and business leaders around the world are grappling with the unfolding coronavirus pandemic, the real-time responses to the crisis from many leaders have been great and, at times, less-than-optimal.

To that end, it's worth pointing out a recent comment from one of the leaders of Silicon Valley, billionaire Tim Draper, the third-generation Silicon Valley venture capital investor and co-founder of Draper Fisher Jurvetson and Draper Associates. If you're not familiar with Draper, who has been actively investing since the '80s, you're definitely familiar with one of the tech companies he and his firms have backed.

Among them, past and present, are Twitter, Unity, Ring, Tumblr, Box, Tesla, SpaceX, Coinbase, Foursquare, Giphy, Patreon, Baidu, Skype, Twilio, and Redfin. Draper's primarily tech-focused firms touch nearly every part of American life, so when such a Silicon Valley titan speaks on an unfolding event like the coronavirus, many important people will pay attention.

Over the weekend, Draper finally weighed in. "The fear is far worse than the virus. The governments have it wrong," wrote Draper. "Stay open for business. If not, so many more people will die from a crashing economy than from this virus."

The vast majority of the replies to that tweet were negative, scorching the legendary VC for his business-oriented comments amid a major health crisis. They were right. This is an unprecedented event. The human race is effectively at war with a new health threat that still has yet to be fully understood or contained. At the end of all this, the reality is that if there are no healthy "consumers," it doesn't matter what your business is or isn't doing while all this is going on. Right now, the priority is health, treatment, and containment.

Increasingly, health experts have reached consensus: The notion of "stay open for business" for retail and physical businesses, only appears to be viable in limited cases. By and large, state and federal officials are advising retail businesses to limit crowds, and in some cases shut down completely. The goal is to prevent community spread of the coronavirus as much as possible. If the rise of infection can be reduced, hospitals will have a better chance of treating and caring for the large numbers of patients seeking care after coronavirus symptoms emerge.

So the bottom line is — No, the fear is "not" worse than the virus. That statement is flatly wrong. Early events in China, and now in Italy have shown us the error of underestimating the threat the coronavirus represents.

Also, the idea that if businesses don't stay open for business, "many more people will die from a crashing economy than from this virus," is again, the wrong message to send. A fully crashed economy most certainly will impact the health and safety of millions of people, and could indeed lead to death in some cases due to lack of income, healthcare, etc. But if that crash is "also" compounded by a more widely uncontained coronavirus, because too many businesses decided to stay open and patrons visited these places and spread the virus, then the casualties may be even greater. So, all things considered, the priority should not be on "stay open for business," but instead limiting community spread, no matter what a master of tech investing says to the contrary.

Although, if this past week is any indication, Draper's message may not have even been necessary. On social media, a number of users submitted images from various parts of the US showing citizens continuing to frequent bars and restaurants in substantial numbers.

But as officials call to limit gatherings of 50 or more people, the streets in some major cities are beginning to empty. In San Francisco, Los Angeles, and New York, government officials have moved to close bars, restaurants, and movie theaters in an effort to slow the spread of the coronavirus.

Such decisions will likely put some owners out of business permanently. And in those same cities, officials are considering enacting curfews to curtail the movements of those who opt to ignore the social distancing directives.

However, let's take a moment to look at Draper's comment — which was almost certainly poorly timed — from the perspective of the thousands and thousands of small business owners across the US. The small deli owners, dry cleaners, and independent grocery stores we've come to rely on to get us through our daily lives. If concern over the coronavirus leads us to almost completely abandon these businesses, they may never recover. If that happens, those shuttered businesses will have knock-on effects that will touch every part of your local community.

So while the priority is to remain safe, first and foremost, when the spread of the disease is better controlled in the coming weeks and months, it will be very important to quickly do everything we can to support small local businesses, as well as many of the non-physical Internet startups that are also worthy of our support.

If anyone can survive a complete market crash fueled by the closing of many businesses (even his own investments) it's a billionaire like Draper. Some reports indicate that he has almost completely exited the traditional stock market in favor of bitcoin speculation. But still, his investment companies are subject to market forces. Therefore, although it's easy to frame him as simply speaking from a self-interested position, whatever happens with the economy, people in his wealth class will probably be able to forge ahead, economically damaged, but mostly intact.

More likely, Draper's enthusiasm for the support of business may have simply revealed a bit of a disconnect from the urgent and growing reality of the situation on the ground in the US and internationally. That's not a good look from one of our most prominent tech leaders. This was the wrong message at the wrong time from the wrong messenger.

Nevertheless, as we work to overcome the coronavirus and its spread, this is an opportunity to extract some positive from an ill-timed call to action: Yes, remember our small business owners, and absolutely support them when and if you can, but only after we've first achieved some control over this current health crisis.

Just updated your iPhone? You'll find new emoji, enhanced security, podcast transcripts, Apple Cash virtual numbers, and other useful features. There are even new additions hidden within Safari. Find out what's new and changed on your iPhone with the iOS 17.4 update.

Cover image via Web Summit/Flickr CC

Be the First to Comment

Share Your Thoughts

  • Hot
  • Latest