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: A COVID-era This Week in Startups roundtable with Jason Calacanis, Roy Bahat, and Zach Coleus focused on public health response, the role of institutions vs. private tech, and how startups should survive the economic shock. The guests debated reopening timelines, argued for masks, testing, and better government competence, and advised founders to preserve runway, cut costs, and take stimulus money when eligible. They also discussed virtual work as a likely lasting shift, plus privacy, China-related trust issues, and a likely reset in valuations and startup strategy.

Main Topics: COVID-19 public health response and reopening uncertainty: The panel discussed New York and San Francisco trends, masks, testing, tracing, and the difficulty of predicting when economies can safely reopen. Roy emphasized uncertainty and the need for broader testing before reopening; Jason was more optimistic about a staged return by May or June. Government failure vs. private-sector response: Zach and Roy argued that weakened public institutions, CDC/FDA failures, and federal mismanagement forced entrepreneurs, scientists, and tech companies to step in with testing, logistics, and PPE. They saw the crisis as a referendum on credibility and competence. Startup survival, runway, and stimulus programs: The discussion turned to the PPP and EIDL programs, with advice that founders should apply honestly if eligible, preserve cash, cut burn, and aim for at least 12 months of runway. Roy and Zach warned the venture market may be frozen or much slower than founders expect. Permanent shift toward virtual work and Generation V: Zach argued the pandemic is launching a new 'Generation V' and permanently accelerating remote work, video calls, and virtual tooling. Roy agreed the rules are changing, but said some physical behaviors and in-person demand will remain strong. Valuations, future fundraising, and investment strategy: Jason predicted venture capital will return as dry powder redeploys, but Roy and Zach urged extreme conservatism now. They used examples like Notion and Zoom to explain how network effects and fast growth can justify high valuations despite near-term uncertainty. Privacy, software trust, and China-related risk: The conversation covered Zoom, TikTok, location tracking, and data sovereignty concerns. The speakers argued software should be treated as untrustworthy, privacy is increasingly an illusion, and China-related data and fraud concerns should be taken seriously. Broader social reset: expertise, hygiene, and behavior: The guests argued the crisis may restore respect for experts, improve hygiene habits, reduce handshakes, and alter expectations of work, government support, and self-reliance. Zach framed it as a cultural correction after years of decadence and anti-expertise sentiment.

Key Arguments: Broader testing and contact tracing are prerequisites for reopening; without them, reopening risks reigniting the outbreak. Masks, distancing, and fast public adoption of best practices emerged from 'hive mind' pressure on Twitter and elsewhere before institutions acted. The CDC, FDA, and White House failed early, showing that weakened institutions can be slower and less competent than distributed expert networks and private companies. Startups should not moralize themselves out of stimulus help; if eligible, they should take support to preserve jobs and liquidity, while answering application questions honestly. Founders should assume capital may be scarce for a long time and plan for 12 months of runway or profitability rather than expecting a quick funding rebound. The pandemic will accelerate remote work, video conferencing, collaboration software, and other virtual tools, creating a durable 'Generation V' behavior shift. Despite the shift to virtual, physical proximity and in-person experiences will still matter; the economy will separate into winners and losers rather than move entirely online. Software and platforms should be treated as potentially leaky or surveillant; sensitive users and organizations must assume data can be tracked or compromised. Long-term change will come from a mix of stronger public institutions, better hygiene norms, more respect for expertise, and a more self-reliant citizenry.

Data Points: Recording date: April 6, 2020 - The episode was taped on April 6 for April 7 release during the early COVID shutdown period. San Francisco deaths mentioned: 8 deaths - Jason cited San Francisco's comparatively low death count as evidence that early distancing may have helped. Timing of last in-person meeting: February 28 - Zach said his last in-person meeting occurred on Feb. 28. Number of friends with COVID: a couple dozen - Zach said he knew roughly two dozen people across a wider professional network who had contracted COVID. Antibody tests performed in San Francisco sample: ~300 to 350 tests - Zach described a grassroots antibody-testing effort led by David Friedberg and volunteers. New cases found in the sample: 1-2 in San Francisco - The small antibody-testing sample found very few previously unknown cases, suggesting low prevalence. PPP/EIDL uptake estimate: 100% / 50-60% / 30% (discussion estimates) - Jason described how many portfolio companies were looking into relief programs and how many likely needed them. Notion funding round: $50 million at a $2 billion valuation - The panel used Notion as an example of high-growth software valuation during uncertainty. Implied revenue multiple for Notion: ~100x revenue (rough estimate discussed) - Jason and Zach inferred a very high multiple given estimated revenue in the tens of millions. Zoom user growth: 10-20 million MAUs to 200 million MAUs - Roy referenced Zoom's explosive pandemic-era adoption as a valuation driver. Factory plan mentioned by Gates: 7 concurrent factories - Jason cited Bill Gates planning multiple factories to address pandemic supply needs. Cap on Twitch/accelerator investment check size: $100,000 - Jason said he would use the crisis to put more 100K accelerator checks to work virtually. Time horizon for startup fundraising concern: 12 months - Zach advised founders to maintain at least 12 months of runway and assume fundraising may remain hard.

Pivotal Quotes: "Why isn't everyone required to wear a mask?" — Zach Coleus: Zach argued that masks should have been widely adopted earlier because COVID spreads through droplets. "This is the moment in my life that where the cone of possible paths in front of us is wider than it's ever been." — Roy Bahat: Roy described the uncertainty of the pandemic as broader than prior crises like 9/11 or the financial crisis. "The venture capital market is frozen." — Zach Coleus: Zach said founders should plan conservatively because new fundraising could be very difficult for an extended period.

Implications: Founders should conserve cash, apply honestly for aid, and expect a slower funding market. The broader tech industry may gain credibility through useful tools, while virtual work, hygiene norms, and trust in experts likely become more important long term.