E1043: News Roundtable! Bloomberg Beta’s Roy Bahat & Coelius Capital’s Zach Coelius on how tech is helping during the crisis, how startups should approach SMB loans, when VC funding will bounce back, Notion’s $50M raise, Zoom’s security issues, Luckin coffee & more!

Episode Summary

Executive Summary: This episode of This Week in Startups features investors Jason Calacanis, Zach Coelius, and Roy Bahat discussing the COVID-19 pandemic's impact on startups, venture capital, and society. They debate the timeline for returning to work, the role of government vs. private sector, and how startups should navigate the crisis. Key themes include the importance of preserving runway, the acceleration of virtual tools, and the potential for a 'Generation Virtual' shift. The episode also covers the Paycheck Protection Program, Notion's $2B valuation round, Zoom's privacy issues, and the Luckin Coffee fraud.

Main Topics: COVID-19 Impact and Path to Recovery (Priority: 5/5): Discussion on the pandemic's trajectory in New York and San Francisco, the effectiveness of masks and social distancing, and differing opinions on when a staged return to work might begin (May 1st vs. later). Government vs. Private Sector Response (Priority: 4/5): Critique of federal leadership (CDC, FDA, White House) contrasted with rapid action by companies (Amazon, Apple, IBM, Microsoft) and tech community initiatives on testing and supplies. Startup Survival and Capital Markets (Priority: 5/5): Discussion on the Paycheck Protection Program (PPP) and EIDL loans, with advice to take the money. Debate on whether the venture capital market will freeze or rebound quickly. Generational Shift to Virtual (Priority: 4/5): Zach Coelius argues a permanent 'Generation Virtual' has begun, accelerating remote work, automation, and digital tools. Jason Calacanis and Roy Bahat counter that physical proximity and in-person experiences will rebound. Data Privacy and Trust in Software (Priority: 3/5): Concerns about Zoom's security and TikTok's Chinese ownership. Broader point: all software is potentially untrustworthy; users should assume lack of privacy. Notion's $2B Valuation and Luckin Coffee Fraud (Priority: 2/5): Analysis of Notion's $50M raise at 100x revenue, seen as a bet on future growth. Luckin Coffee's 80% stock drop due to fabricated sales highlights tide going out in frothy markets.

Key Arguments: Founders should apply for PPP loans now, even if not urgently needed, as the intent is to keep the economy going; money can be paid back later. Startups should cut costs to maintain at least 12 months of perpetual runway, assuming venture funding may be unavailable for 12+ months. A permanent shift to remote work and virtual tools has begun ('Gen V'), but face-to-face interaction will still rebound strongly once a vaccine is available. Government institutions have been weakened by underfunding and anti-government rhetoric, necessitating private sector and tech community leadership during crises. All software should be assumed untrustworthy and privacy is an illusion; users should treat every message as potentially public.

Data Points: San Francisco COVID-19 deaths: 8 - Mentioned as a fraction of New York's toll, possibly due to early distancing and density differences. Quarantine start date for Zach Coelius: February 28, 2020 - His last in-person meeting; he began distancing mid-February. Notion fundraising: $50 million at $2 billion valuation (2.5% equity) - Implies roughly 100x revenue multiple, justified by high growth potential. Luckin Coffee stock drop: 80% in five minutes, $5 billion lost - After admitting fabricated sales up to 88%, COO implicated. Zoom MAU growth: 10-20 million to 200 million in two months - Cited as example of massive acceleration from remote work demand.

Pivotal Quotes: "I've predicted for many years that in our lifetimes, we are largely going to live in a virtual world where we plug in and we can do whatever we want, wherever we want, however we want in a virtual world." — Zach Coelius: Arguing that 'Gen V' (Generation Virtual) is a permanent shift underway. "The safest assumption about when you'll be able to raise money is never." — Roy Bahat: Advising portfolio companies to plan for the worst-case capital scenario. "We have to have an OCD level like Japan when it comes to personal hygiene. [...] No more shaking of the hands. We're barbarians in America for that." — Jason Calacanis: Calling for permanent changes in hygiene habits post-pandemic.

Implications: Listeners should expect a prolonged disruption in venture capital fundraising, making runway extension critical. The podcast highlights a likely permanent acceleration of virtual work tools and remote culture, while also forecasting a strong rebound in in-person activities once health risks subside. Entrepreneurs are advised to apply for government stimulus loans now and prioritize capital efficiency.